Insights on Demonetisation from Rural Tamil Nadu: Understanding Social Networks and Social Protection

Not only is there still very little evidence for this, but unlike cash, users must bear the costs of digital payments as well (Mader 2016). [...]the immense pool of data that digital payments generate opens the door to new and problematic forms of control (Gabor and Brook 2016). According to various estimates, the Indian economy lost 0.5 points of growth7 as a direct result (Rao and Kotian 2017), but the official statistics cannot capture the negative growth effects on the informal sector (as the official numbers are largely based on formal sector data). Some families started the season without any advances, hoping to receive them a few months later. Since in many cases wage advances are used to pay off past debts, we suspect they had to postpone debt repayment, which may have incurred additional costs. [...]what really seemed to have happened, instead of clear movement towards more formalised economic transactions, has rather been a reinforcement of the informal economy, which is the very thing that allowed actors to temper the violence and harmful consequences of the shock.