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A Feminist Perspective to Demonetization in India – Effects of the Demonetization Crisis of 2016 on Women and Transgender Communities

A woman holds 500 and 1000 Indian rupee banknotes as she stands in a queue to deposit her money inside a bank in the northern city of Kanpur


By Srivatsan Manivannan

India’s 500-rupee and 1000-rupee currency notes were demonetized by the government in December 2016. The titular depiction of it as an economic crisis stems from a feminist and subaltern perspective, that considers the peripheral groups suffering and not merely the comparatively scarce economic and social losses experienced by the upper-middle class and the upper-class citizens. In viewing the period and its ill-effects on the lives and economies surrounding the rural Indian woman, in considering the lived experience which invalidates the assumptions of a Hobbesian ‘state of nature’ that is the foundation of a homo economicus. From the view of the educated urban citizen, the demonetization was justified so long as their personal suffering was minimized.

A few deaths, the destruction of communities and livelihoods, and the disproportionate harm caused to those, not in the dominant male-gender were inconsequential, subconsciously and consciously branded as collateral damage for the greater good of the Indian economy, and the elimination of black money (neither of which the demonetization achieved). The paper will use George Akerlof and Rachel Kranton’s notion of identity and its role in affecting economic outcomes to use gender identity and analyze the effects of demonetization on women and transgender persons. I begin with a brief literature review of identity bias and the theoretical consideration of gender, as articulated by Akerlof and Kranton, the importance for feminist perspectives on crisis situations as mentioned by M. Bjornholt, and will provide data regarding the economic status and types of personal savings kept by women and transgender people in India. Following this, the data will be analyzed to view the effects that demonetization had on the savings of the aforementioned groups, and the role of women and transgender people as subjects of the crisis. The paper utilizes information only from secondary sources, and thus its limitations arising from this will be discussed prior to the conclusion. The paper will not provide a conclusion on the effectiveness of demonetization on the Indian economy or lack thereof, nor will it consider GDP, CPI or other indexes in providing this analysis, nor will it analyze. Thus, it attempts to redefine the notion of a crisis, even from an economic perspective.

Economic crises, despite the developments in the academic discipline, continue to lay importance to rationality and its role. People are assumed to be rational actors, whose choices are governed by a boundless rationality, where there can be only one possible rational act and not a choice between multiple possible rational acts. Besides this, the rational choice theory has its limits, as critiqued by Amartya Sen in his The Idea of Justice, where he spoke of rational choice, identity, and other societal reasons which confine and provide a restrained rationality which economics doesn’t consider. Thus, this bounded rationality and its usage for prediction is deemed improper and ineffective, and there is a need to understand actual choice. Hence, while considering the best ways to maximize one’s self-interest, identity, habit, societal expectations and norms all play a role in the acts that a person does. Besides this, identity is not limited to self-interest, but rather includes acts that are seemingly against it. Akerlof and Kranton mention four reasons why identity is relevant to economics: identity explains seemingly detrimental behavior, it “underlies a new type of externality”, it “reveals a new way that preferences can be changed”, and that since “identity is fundamental to behavior, choice of identity may be the most important “economic” decision people make”. The first and fourth aspect listed are those which are most crucial with regards to this paper. The conclusions that Akerlof and Kranton arrived at are all the more relevant while considering the demonetization crisis and its effects on women and the transgender individuals. They established that “people have identity-based payoffs derived from their own actions; people have identity-based payoffs derived from others’ actions; third parties can generate persistent changes in these payoffs, and some people may choose their identity, but choice may be prescribed for others”.

While considering women in India, as well as the transgender population, an immediate location of their identity in the periphery of society is required. While the class may help provide mobility that brings some individuals of the group closer to the center, the larger groups themselves are restricted, by virtue of their identity and the historic oppression they have faced, to the periphery, particularly in India. They are hence vulnerable subjects. Bjørnholt and McKay speak of vulnerability and its corresponding aspect of resilience, drawing upon Martha Fineman’s work. Vulnerability is defined there as a complex entity which is “constant, inevitable and universal, and it is characterized by the “imminent or ever-present possibility of harm, injury, or misfortune” Some of the implications of this vulnerability could be poverty and unemployment. Resilience, on the other hand, is defined by Fineman to come from “having some means with which to address and confront misfortune”. She then lists various resources which one could have resilience with – physical resources, human resources, social assets, ecological resources, and existential resources.10 The government has a crucial role in the allocation of such resources, and hence play a role in the levels of privilege or discrimination that different groups face. Thus, while considering women and transgender communities in India, they must be viewed as undervalued and marginalized, as well as vulnerable with limited assets that provide them with resilience.

That Indian women are vulnerable and not privy to some of those assets is not mere assertion. There is a large population gap where women comprise 48.5% of the Indian
population. There is a large wage gap where women earn merely 57% of what their male colleagues earn for doing the same work. A 2015 UNDP study established that 80% of women in India do not possess bank accounts, where they are dependent on male relatives or spouses to do the banking for them. Thus, to manage their finances and access financial channels, this large majority of women require these male relatives to oblige and provide them permission. To circumvent this, women resort to keeping their personal savings in cash and maintain some financial independence. Besides this, informal workers form a large segment of Indian women, where they are paid in cash and lack the official documentation to exchange their currency notes. These include women and transgender individuals who are sex workers, who work as agricultural or domestic help, in factories, or in other daily-wage scenarios. They keep their savings in large stashes of money hidden, in the case of women, from the male members. The informal sector accounts for nearly 45 percent of India’s GDP yet provides for about 80 percent of its employment. The presence of women and those of the third-gender in the informal not merely by chance or coincidence. It arises from a historical subjugation where women and transgenders are deprived of formal education and skill development opportunities and hence must resort to informal sectors to sustain themselves. The economic slowdown in the short-term arising from demonetization and the cash crunch thus immediately affected the informal sector, and the women and transgender individuals working in them, particularly in rural areas. Yet no initiatives from the government exist to tackle these systemic issues that render a large proportion of the population much more vulnerable, without the assets that provide them such resilience.

There were recorder 4.9 lakh transgender individuals in India, as per 2014, The actual numbers are estimated to be must higher. With respect to the transgender communities, the main source of income for the hijra community comes from toli-badhai, where they obtain money from festivals or events that happen in households including weddings and childbirth, and from sex work.19 This too comes from a societal oppression that places them in the margins. As a vulnerable community that struggles in every aspect of living, from finding accommodation to getting work, obtaining education and having a family, the economic move of demonetization fails to take into account these subjects who are affected. The primary savings they possess in terms of cash is demonetized, where those of the third-gender require official documentation to open bank accounts or get their currency exchanged, where the nature of their identity and the documented struggle for them to obtain even an identity proof with a recognition of their gender, makes it almost impossible for a large group of them to have their money exchanged or deal with this cash crunch. Despite the passing of the NALSA judgment where the Supreme Court mandated all state authorities to provide recognition for a ‘third-gender’ including transgenders, the implementation has been highly flawed, where in order to receive identifications they have been asked for school certificates or birth certificates, which they do not have. Furthermore, the Transgender Rights Bill was also not one which helped the community, as it required a screening process to see if a person qualifies as ‘third-gender’ which demands the question – how does one prove that they are transgender?

Transgenders have stated that even those who held bank accounts could not stand in the long queues to the banks and ATMs as they faced harassment, both by others in the line, as well as by officials. Even if demonetization was effective towards the elimination of black money, rooting out of corruption, and the other quickly changing objectives of the government move, there is a need to consider the damage done to the vulnerable groups involved. This leads one to question as to what economics considers to be a crisis.

Usually, an economic crisis involves a downfall in the overall financial growth levels of the country, characterized by a falling GDP, with liquidity drying up, with these being a recession combined with rising or falling of prices, where there is an excess inflation or deflation. None of these aspects take into account possible lives lost, livelihoods lost, or entire groups of communities disadvantaged, nor does it take into consideration individuals whose role in society is not governed by their earnings in cash, such as the Indian housewife. There is hence required a redefinition of what constitutes a crisis, with crises of households, of marginalized communities, also receiving attention from institutions, with what one could perceive as a human rights consideration and a subaltern one.

As Bjørnholt and McKay state, an analysis of economic crises, including policy-induced crises, require a consideration beyond standard market-based indicators. They state that it is required

“…an examination of patterns of distribution both within and across households; an assessment of how a lack of affordable care services impacts on access to the formal labor market and an evaluation of how patterns of social reproduction are affected by a process of economic restructuring that transfers costs from the formal paid economy to the unpaid household economy.”

There is thus, in the case of women and transgender communities, a need for economics to consider from a feminist perspective the interaction between paid and unpaid economies. The unpaid work was done by women and transgender folks, or the work was done that is purely cash-based and without an ability to link that cash to an identity or a bank, is important to the upholding of market-based economies. Thus, it is not merely economic indicators that need to be seen, but a combination of aspects and approaches, including “inter-connection and cross-fertilization between feminist economics, feminist legal theory, theorizations of care, care-work and dependency, in philosophy as well as comparative welfare state research, and the reinvigoration and new theorizations of human rights”. This involves viewing a crisis not merely in terms of who caused it and who is to blame, but rather to see the root of the situation, where there are subjects to this crisis whose choices and identity are key in their acts of retaining money and savings in cash, and the destruction of their independence in such quickly implemented demonetization, as well as of their savings in the case of transgender individuals with issues to obtain documentation.

How does all of this matter, and how is it a feminist economic perspective, and not merely a sociological or social perspective? One goes back to Amartya Sen and his notion of rationality being limited, and actual choice requiring more consideration. Similarly, the subjects of a move such as demonetization are not just subjects of the rational choice of others, nor are they governed by it. They are victims of the actual choice they commit, such as keeping their savings in cash, or not having the accurate documentation or ability to convert the currency or deposit them, due to the social constraints and norms, expectations and prescriptions that they are expected to follow. Akerlof and Kranton characterized the identity bias, by stating how the model of identity begins with a social difference. Gender, like other categories, are socially constructed and also prescribed. People have prescribed genders at birth, and society enforces its stereotypes and treatments of the same. Discrimination occurs on a longer scale leading to a vulnerability that these communities face, and a relative deprivation of the resources that could grant them resilience. Through this, Akerlof and Kranton’s indications of identity-based payoffs both from the actions of people and from others, as well as third-party generation of changes in such payoffs and the choice or prescription of identity has been demonstrated. Women and transgenders make certain acts that arise from their identity and oppression, including keeping savings in cash. Their payoffs are influenced by the actions of others, in the case of women being dependent on the male relatives for access to formal channels of finance, as well as the issues transgenders face in obtaining documentation, all coming from various other individuals in society who through their prescription and discrimination, position these identities in a peripheral location. Further, in the case of transgenders, it is important to not merely consider the conventional image of the hijra or the intersex individual, but rather queer and non-binary individuals in the country who also choose their identity, in comparison to others whose identities are prescribed for them.

Thus, in conclusion, one sees the need for a different conception of crisis, even while considering acts that are economic or have economic significance. The notion of identity needs to be incorporated more into economic theories, with a greater emphasis on feminist considerations that look into notions of care, human rights, and suffering that is non-economic but results from economic acts. If all acts are economic in nature, then rationality falls short of explaining most of them, and the masculine structure of rationality needs to be replaced, even in economics, with the more complex and perhaps feminine conception of lived experiences. This paper is limited primarily by its reliance on secondary sources for its data, where the reliability of such data is high yet there exist multiple reports with different statistics on the status of women and transgenders, as well as the effect of demonetization on them. Regardless, no statistical variation can disprove the vulnerability, marginalization, and oppression that these communities go through, and all statistics prove the notion that there is required a feminist perspective on the Indian demonetization and an understanding of what it truly was for these communities – a crisis.



Akerlof, George, and Rachel E. Kranton. 2000. “Economics and Identity.” The Quarterly Journal of Economics 715-753.
Bjørnholt, Margunn, and Ailsa McKay. 2015. Advances in Feminist Economics in Times of Economic Crisis.
May. Accessed April 20, 2018. content/uploads/2014/05/Advances-in-Feminist-Economics-in-Times-of-Economic-Crisis.pdf.
Bulusu, Siri. 2016. “India’s crisis over bank notes hits women especially hard.” USA Today. November 23.
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Catalyst. 2017. Women in the Labour Force: India. June 27. Accessed April 28, 2018.
Fineman, Martha Albertson. 2010. “The Vulnerable Subject – Anchoring Equality in the Human Condition .” In Transcending the Boundaries of Law, 177-191. Routledge-Cavendish.
Mukherjee, Sharmistha. 2016. “Demonetisation Through Gender Perspective.” Business World.
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Nikore, Mitali. 2016. “Assessing the impact of demonetization through the gender lens.” International Growth Centre. December 20. Accessed May 2, 2018. the-impact-of-demonetisation-through-the-gender-lens/.
Roychowdhury, Adrija. 2016. “Demonetisation has some forgotten victims: Transgender community.”
The Times of India. November 30. Accessed April 26, 2018. the-transgender-community/.
Sen, Amartya. 2011. “Rationality and Other People.” In The Idea of Justice, by Amartya Sen, 174-193.
Harvard University Press.
The Times of India. 2015. “In India, 80% of women don’t have bank accounts: UNDP report.” The Times of India. December 15. Accessed May 4, 2018. India-80-of-women-don’t-have-bank-accounts-UNDP-report/articleshow/50179848.cms.

Srivatsan Manivannan is a graduate from Jindal School of Liberal Arts and Humanities (JSLH), Sonipat.

Featured Image Source: HUFFPOST


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