Santosh Bavash, 30, said he knew about the Internet. “I’ve heard it tells you about the future,” he told IndiaSpend when we spoke to the short and thin labourer from the village of Gyanpura, in the western district of Dhar, in Madhya Pradesh (MP), one of India’s poorest states.
After the withdrawal of Rs 14 lakh crore – 86 percent of the Indian currency in circulation – the government has pushed for digital payments to counter the lack of notes in the economy. Of the 28 tribals IndiaSpend met, in a state with more tribals than any other, all but two had a bank account (92.8 percent), 17 had a personal cell phone and knew how to use it (60.7 percent), six owned an ATM card and knew how to use it (21.4 percent), and two knew about the Internet (7.1 percent), an indication of the gulf between Prime Minister Narendra Modi’s vision of a “digital” or “cashless” economy and the reality in India’s most disadvantaged areas.
India has 104 million tribals, 8.6 percent of the total population. Madhya Pradesh alone has 14.69 percent of India’s tribal population (15.3 million). Tribals have lower access to banking services, lower income, education levels, and health outcomes than the rest of the population, according to data from Census 2011, and the socio-economic caste census.
Why tribals are more unprepared than other Indians for the cashless era
A small group of men and women sat on a raised platform, as a child played on a makeshift swing hanging from a tree. To one side lay farmland, to the other, houses. This was the village of Footiya, in the MP district of Jhabua, along the border with Gujarat. Footiya is inhabited predominantly by adivasis, or tribals, and does not have a post office, a cooperative or commercial bank, an ATM, or a public phone booth, according to information from Census 2011.
“I am anguthachaap,” Zumla, a Bhil tribal with a white turban, added in Hindi, using the term for a thumb impression, a sign of illiteracy. “I use a chequebook (he meant passbook) to put in money and take out money, but I don’t know how to use an ATM,” said Zumla, dressed in a grey shirt paired with a white dhoti tied above the knees. “If I can’t read, how do I know what buttons to press?” It takes him an hour to walk to the nearest bank branch, about 6 km from the village, he said.
The district of Jhabua – over 91 percent of all households here are classified as Scheduled Tribes, the term in the Indian Constitution for tribals – has one of the lowest rural literacy levels in the state. Less than half of the population in the district (40.1 percent), and less than one-third of the women (29.8 percent), in rural areas is literate, according to 2011 Census data.
Overall, tribals have a lower literacy rate than the rest of the population. About half of the tribal population (50.6 percent) in MP is literate, compared to 70.63 percent for the population overall, according to data from Census 2011.
Tribals fall way behind other Indians in use of banking services
Less than 45 percent of Scheduled Tribe households used banking services in 2011, compared to over 58 percent of the whole population, according to Census data.
A lack of jobs and abject poverty meant that some tribals had no money to put into a bank account. On average, the tribal population earns less than the rest of the population. In MP, 1 percent of tribal households pay income tax – one sign of a lower income – as compared to 2.4 percent of the non-tribal population, as IndiaSpend reported in July 2016.
Along with Odisha, MP has the second-lowest percentage of tribal households who pay income tax, based on data from the socio-economic caste census.
A lack of knowledge about ATMs, cellphones or bank accounts emerged as one of the main reasons for the reluctance to use bank accounts and ATMs more often.
Anita (she uses only one name), from Chhatripura village, in Dhar district – 64.4 percent of its population belongs to the scheduled tribes – said she had opened a bank account under the Pradhan Mantri Jan Dhan Yojana, and was given an ATM card.
“But no one taught me how to use anything (bank account and ATM card),” she said. She has not gone back to the bank or deposited any money into the bank since she opened the account about a year ago.
Lower price for harvest, difficult to get change for Rs 2,000
Tribals in these areas were mostly farmers or non-agricultural labourers. Farmers said they had been offered lower prices for their harvest than they had expected, and blamed the withdrawal of currency for the lower prices.
“I have been making a loss of Rs 8 per kg on cotton (the main cash crop in the area),” said Gappu, the tribal from the village of Rui, in Khargone district, when IndiaSpend spoke to him on December 6, 2016. “I still sell 5-10 kg every other day at Rs 42 per kg because we need it for household expenses and for paying off debts,” he explained.
Other farmers said they were putting off selling until the prices increased in the market. Syana Natya, a maize farmer from Rui, said the family had put off selling any corn until prices increased.
“They are offering Rs 8-9 a kg, but we expect Rs 12-13 a kg,” he said. He added that some traders had offered a cheque but he didn’t have a bank account and didn’t know how he would use one, as he was uneducated.
Some said the decision would eventually be beneficial to the poor. “The black money that has come out, Modi might distribute it. He might approve the building of a house or something (for the poor),” said Mithun, the labourer from Dhar district.