The world is fretting over Donald Trump winning the mandate to lead the US for the next four years. But we Indians are preoccupied with an issue that is much more local. To paraphrase a well-worn saying, ‘local’ is all politics. So is the sudden demonetisation of high denomination currency notes.
Demonetisation is the act of a government declaring that a currency or some of its components are no longer legal tender. As a consequence the citizens can no longer exchange it for anything of value.
On the face of it this can be draconian since the poor have no assets other than a few rupees to fall back on. What do they do if those rupees are declared worthless?
The rich have many other assets to fall back on. They do not live a hand-to-mouth day-to-day existence.
Demonetisation, as with inflation, recession, stagnation, unemployment etc, affects the poor disproportionately.