Welfare Shock

Earthquakes trample everyone equally. However other calamities effect each layer of the society differently. Rich having most cushions are best protected while poor being the most exposed are worst affected from these jolts . In fact for people subsisting around the poverty line one push is more than enough to trip them over that red line on the worst side as one lift is often enough to change their social status towards the positive side.

For poor, one illness, one flood, one death, one marriage can push an entire family into ruin as they do not have the sustenance power or bounce to crawl out of it. They can get mired into endless cycle of ruinous debt in trying to weather it. Likewise one job, one windfall or one timely help can often save the family from starvation. Such events which might be routine jolts for rich or even middle class, frequently turn out to be welfare shocks for daily wagers.

#Demonetization is one such event that has taken place. Being sold to public as a move in national interest it delivers a welfare shock to almost 20 crore Indians who live around the poverty line. Very many of the families will never ever come back out of it.

Is the cost that nation will pay worth the benefits that will accrue from this step? Devoid of its sales pitch what actually is the cost benefit analysis of demonetization? Looking away from its bad optics of serpentine ques at banks, was there anything else that could have been done which was not as cataclysmic but equally effective.

I do lot of number crunching and long form analysis to come up with a tentative answer to these and other related questions in my article written for Quint…. Come back after reading it to let me know what you think?