<b>Rahul Jacob</b>: The neurosis of <i>notebandi</i>

Flying in from Hong Kong a couple of weeks ago, I advised the friends who were travelling to India for the first time to change money at their hotel and avoid the queues at the airport. Carrying only Rs 100 and three old Rs 500s myself, I figured I was fine because I have two bank accounts and three credit cards.

I was wrong. My friends found their five-star hotel in central Delhi had imposed a limit of $10 per room. And, I soon felt like a rat spinning on the flywheels of a giant economic laboratory. Trying to send a letter by express mail and already late for a friend’s father’s 80th the next afternoon, I became angry that a grimy DTDC courier outlet had no card machine. When I went for a haircut, a friend gamely accompanied me — in case I didn’t have enough money. 

 

By Indian standards, I am part of the fortunate cohort who paid income tax last year, but I felt perpetually short of cash. This proved a lesson in empathy and economics, altering the way I spent money. By my fifth day in New Delhi, I was in debt to my former driver for Rs 3,500 in cash and had only Rs 200 left. (He found a little-used ATM with cash next to the vice-president’s mansion) Having heard stories of private sector banks running out of cash mid-morning, I arrived at my bank’s doors before it opened. I withdrew Rs 20,000, the most I have ever taken in cash. My wallet bulged like a drug-dealer’s. (SOS to the Reserve Bank of India: When will we get those ugly new Rs 500 notes?) 

I experienced waves of bulimia and guilt. That evening, I offloaded about half my cash. My saintly former part-time maid is a de facto single mother of three because her husband is in Shimla. Juggling two jobs and volunteering as president of her children’s school’s parents’ association, she has less time to stand in queues than most. Still, she initially refused the money I insisted she take.

I quickly became miserly and irrational. Other than paying my tennis coach Rs 600 twice in cash in court and coaching fees and spending money on the odd auto ride, I avoided cash transactions. Tennis may seem a Louis XIV extravagance in such times, but every person has their addictions. These two clay courts on the edge of Lutyen’s Delhi are exclusively for bureaucrats and worth every rupee for a non-member. A sudden scare about floaters in my right eye sent me scrambling to my ophthalmologist. I had no money. He had no PoS machine, but he had a Paytm account.  

Seeking guidance on aberrational upper middle class consumer behaviour, I turned to Rama Bijapurkar. “This is like being anxious when water pipe repairs are going on: ‘Cook biryani with three vessels or khichdi in one’,” Bijapurkar assured me. “When it eases, you will spend with abandon because abstinence is hard.” That is post-1991 liberalisation speak, but she’s usually right.

Still, a week after I arrived in India, my psychosis was intensifying. I have very slow mobile connectivity at a flat in Bengaluru that has no broadband so topping up e-wallets is a pain. My physio and trainer, usually happy to take cheques, now didn’t want to go near a bank. Who could blame them? Such is the level of trust when commercial relationships become congenial in India that they laughed off my requests for their IFSC codes and said I could square up when I am next here. I put off till January what I had intended as a late Diwali tip for some of the staff in the housing complex. Asking the lady into whose garbage can I emptied my banana peels and soggy tea leaves every morning if she had joined the nationalist project to enrich Chinese-owned Paytm seemed like adding insult to penury. The lovely vegetable seller outside looked forlorn as her customers now marched past to the Aditya Birla Group supermarket next door, even though her vegetables are fresher. On one occasion, I deliberated for a couple of minutes whether to spend Rs 100 on eight stalks of rajnigandha. My neighbour, a doctor, said surgeries at the city’s largest hospital were down 30 per cent. 

Over idlis at his office in New Delhi, Ajay Shah of the National Institute of Public Finance and Policy quoted Jane Jacobs’ characterisation of the dance of city life, arguing that economies, too, are “an intricate ballet in which individual dancers and ensembles all have distinctive parts.” He warned that thousands of small firms will fold in the wake of notebandi. So will people selling from carts, apparently. One can’t help wonder why this government did not reform labour laws at the outset instead. 

The late JRD Tata once bemoaned that no prime minister had ever asked his opinion on economic policy; even so it is hard to think of an instance of seismic change with so little input from experts. The average monthly mobile bill in India is Rs 120 to Rs 180, which does not suggest a population with much money to put in e-wallets. Payment banks in India uniformly lose money.

The negative headlines overseas are muddying India’s pitch as a superpower in the making: Foreign institutional investors are baffled by the turmoil in what was billed Asia’s great domestic consumption story. Just before I left Bengaluru, a protective Hong Kong Chinese friend called in a panic, asking if he should arrange a wire transfer to my account. He had heard there was a shortage of money in India.