Revision summary
Demonetisation shocked cash informal markets rather than igniting lasting growth. Labour became more casual where small units lost turnover. Underemployment rose as hours and farm fallback replaced wages. Women’s petty trade and unpaid enterprise took a gendered hit. Formalization remained a slogan over an informal majority.
Model answer
Introduction
Demonetisation in 2016 did not accelerate durable economic growth. It shocked cash-heavy informal India, thickened underemployment, and hit women workers who live outside formal wage records.
Body
Growth claim
- The official hope was a formal, digital, tax-clean burst of growth. Short-run disruption of trade, small manufacture, and agriculture was the sociological fact.
- A. R. Desai’s India is still largely informal. A cash ban without a prior formal wage world cannot jump-start GDP; it can stall it.
Informalization of labour
- Most Indian workers are already informal. Demonetisation pushed some units to cut days, delay pay, or shift to even more casual hiring.
- Circular migrants lost cash-in-hand work; the village became a shock absorber, later seen again in COVID reverse flows.
Underemployment
- Not open unemployment only: fewer hours, unpaid family work, and a return to tiny farms.
- Thorner’s mazdoor waited for a wage that came in old notes.
Gender discrimination
- Women in petty trade, domestic work, and unpaid family enterprise hold cash and gold at the household edge. Liquidity shock hit their turnover first.
- Seed-and-Earth families often keep women’s accounts informal, so they had less access to new-note banks and digital wallets.
- Care loads rose when incomes fell; time poverty is gendered underemployment.
What did not happen
- A sudden leap into decent formal jobs. Formalization talk continued; informal lives absorbed the cost.
Flow diagram
flowchart TD DE[Demonetisation] --> S[Cash shock] S --> I[Informal job cut] S --> G[Women petty trade hit] I --> U[Underemployment village fallback]
Conclusion
Demonetisation did not accelerate growth in any inclusive sociological sense. It revealed and worsened informalization, underemployment, and gendered exclusion from liquidity. Growth that ignores the cash-and-care economy is a statistical hope, not a lived boom.
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