When Narendra Modi made the announcement on demonetisation of 500- and 1,000-rupee notes on November 8, Manoj Mandal was on a train from Darbhanga in Bihar to New Delhi with his wife, daughter (aged 18) and son (aged 10). When he reached New Delhi railway station the next day, he learnt that notes of more than Rs. 100 were only paper now; nobody at the station took them.

He was seriously agitated while his wife wept continuously on the way to their small rented two-room accommodation in Gijhor village, Sector 53, Noida, wondering what they would do with their savings. All of it was in 500- and 1000-rupee notes, kept safe at a friend’s house while they were travelling.

Mandal had been saving money for the past three years to marry off his daughter, the youngest of four. The others are married and live in various parts of Noida with their families. “Each wedding was a big task since proper arrangements must be made for food as well as at least Rs. 1 lakh as dowry to ‘help the groom’,” he says. It’s all in cash as he doesn’t have a bank account, never had one.

“I kept moving from one place to another in Bihar and here in Noida, too, we don’t have the ability to deal with bank people and paper work as my wife and I are illiterate. All that we learnt (of reading and writing) was on a need-to-know basis while we were growing up,” he says. He has lived in Gijhor for more than 15 years. Before that he worked in Kolkata for more than a decade. While his family stayed in the village when he was in Kolkata, he brought them to Noida within a year of moving.

In Noida, he first worked as a cook at some ‘kothis’ before opening his own place across the road from the privately-owned Noida Medical Centre (NMC) in sector 30. He regularly had to bribe the local police, especially from the infamous Nithari post under the sector 20 police station. Business was good initially but when the hospital closed around 2010, he had to wind up at a heavy loss of Rs. 10,000 at the time.

Since then, he’s plied a cycle rickshaw while taking up ad hoc cooking jobs at marriages and parties for customers familiar with his skills for many years.

“Some of them I met when they came for treatment at the hospital. They were the first to contact me for parties at their homes.” He also works as a part-time painter for a local contractor from Bihar. “In summers, especially, when it is hard to work (as a rickshaw puller) in the heat I take these jobs. At least you stay indoors.” For all these jobs he was paid in cash, and these earnings helped him marry off his elder daughters.

The announcement threatened all his savings and his plans to put his son in a “bigger private school” once he completed class X from the school in Gijhor. The first few weeks after that were especially traumatic as, like everybody else, he too didn’t take 500- or 1,000-rupee notes, limiting himself to 100s or lower denominations, while wondering what to do with his savings. As the cash crunch set in, the number of customers for his rickshaw also fell drastically. Most switched to transport where cashless payments could be made. Almost all his friends, who also deal only in cash and have no bank accounts, said Modi was an enemy of the poor while earlier they were all praise. Much of the praise came from customers talking about Modiji’s heroics as prime minister.

But now, again, that has changed. Modi is back as a messiah of the poor as their incomes have stabilised. Mandal’s savings are back with him; in fact, he now has more money saved than he had on November 8.

The migrants in the National Capital Region of Delhi and adjoining districts of Noida, Ghaziabad and Meerut in Uttar Pradesh (UP) and Faridabad and Gurgaon in Haryana mostly live in the urbanised villages. The lands of the original inhabitants were acquired to build the infrastructure which has fuelled growth in the IT and services sectors along with residential expansion. These have grown year by year, almost crippling the cities’ initial infrastructure, fuelling further expansion of the NCR, which now includes the district of Muzaffarnagar in UP and Bahadurgarh and Sonepat in Haryana.

In return for their farms the villagers got land close to their villages apart from cash compensation and the promise of jobs for them or next of kin, barely kept. On this land they built multi-storey buildings—mostly without permission—with one-room or two-room accommodations which they rented to migrant labourers from UP, Bihar, Bengal, Madhya Pradesh (MP) and other states. The urban villages now house a majority of the NCR’s migrants. Mandal lives in similar accommodation with 50 other families like his. Most live in single-room apartments, at Rs. 1,000-1,500 a month.  Mandal pays Rs. 3,000 for his place.

The migrants have been exploited over the years. Most don’t have voting rights and so can’t be involved in the panchayat or other elections where their problems might be addressed. Many villagers also became money lenders, giving out the money they received as compensation on interest. This informal lending has allowed them to charge exorbitant rates of interest from poor and often illiterate migrants.

For example, most migrants who want to buy a cycle rickshaw need Rs. 8,000 and then must earn their living on a daily basis, come in with just a few thousands and live with a relative or friend before they can afford their own accommodation.

Mandal had to establish his food joint and find the money to pay for accommodation for his family before he could bring them to the city. He came with only Rs. 2,000 and travelled in an unreserved coach, which he does to date. A migrant who needs instant cash must borrow from his friends or approach the local money lender. The most common rate of interest is one per cent of the principal every day until the whole is returned. So, if you borrow Rs. 5,000 while putting in Rs. 3,000 of your own to buy a rickshaw, you pay Rs. 50 as interest every day, or at an interval the lender deems acceptable while you earn and save enough to return the whole at one go.

While this may seem reasonable—it’s been accepted across NCR for decades—it is pure exploitation. After borrowing Rs. 5,000, for example, if you pay the principal two months later, you will return around Rs. 8,000 in all since Rs. 50 per day for 60 days amounts to Rs. 3,000. The longer the return period, the more you end up paying. In pure banking terms, interest is 365 per cent per annum with the principal intact!

All payments are in cash so there’s no way to stem the practice as exploited workers consider it a largely fair system and don’t lodge police complaints. The money lenders also offer flexible payment options after a few nasty words and some extra payment in turn in the long run.

Migrants who make it in the big city have also taken to this practice. They put out their savings in the same manner, in turn earning more money. While most migrants have their own professions, some have managed to hit it big time. The most famous example is Shri Bhagwan Sharma, better known as Guddu Pandit, originally from Jaunpur in eastern UP, who made it big in the same Gijhor village through various illegal means. A cycle repair mechanic when he first came to Noida around 25 years ago, he became a hit man for a local politician, later moving on to become an MLA from Dibai constituency in Bulandshahr district of UP on a Bahujan Samaj Party ticket.

One of his cousins is alleged to be running his hawala business through local money lending fronts from Noida. During a recent raid by the Income Tax department at a branch of Axis Bank in Noida’s sector 51, barely 2km from Gijhor, 20 accounts of fake shell companies were found with over Rs. 60 crore deposited systematically since demonetisation. “Many of these accounts are suspected to be of local politicians,” a senior officer told Fountain Ink on condition of anonymity.

Money lenders among the locals, on the other hand, use the money from lending to buy farm land or build houses and move up the social ladder. Many have built hotels and lodges from the money. For them lending is now a way of life. Sukhram Gujar, originally from Khora village in Noida which has become one of the biggest slum-cum-illegal colonies in NCR and now mostly regularised by the authorities, says, “I have bought farm land near Anupshahr (in Bulandshahr district) and plan to eventually build a farmhouse so that I can shift there with my family.” He often lends money “at discounted rates” to farmers from the village where he has bought land to earn their trust and build “social togetherness”.

He is a comparatively smaller lender but many of the bigger fish invest in the real estate market. Most either contract to supply various type of raw material to government agencies or private firms, or invest in property themselves or through relatives and friends. Those who take up contracts further sub-contract them to smaller players and earn huge commissions from the deals they make. Yadav Singh, the Noida Authority engineer caught last year with hundreds of crores was a “source” for several contractors, police say. “He took his cut for sub-contracting works under him as well as from people in other departments,” says Pradeep Sharma, an officer investigating one of the cases against Singh.

The real estate market in NCR and in most parts of the country—while acquiring land from locals at nominal rates, against which farmers have launched movements across the country in the past decade—has focused on high-end apartments and villas. Not only do they fetch more it also helps the mafia run black money through the system as a majority of deals involve black money. In most cases, some is paid in cash, which is to say in black, while the rest is through banks, through white means. This helps the builder earn more per flat while the “white” money is shown in his records. Some of this is owed to local sub-contractors who run their own rackets, the rest mostly to daily wage labourers, carpenters, painters, electricians, plumbers, mostly migrants.

For villagers who got compensations from the government these properties are too costly. So they remain in their own villages and run their farms or work in various companies in the region in different sectors. This trend has taken a hit over the past 4-5 years as the market for high-end properties has gradually declined due to limited demand. Industry estimates say the overall number of flats built till March 2016 in nine major real estate regions in the country, including Noida, Gurgaon, Ahmedabad and Chennai, has fallen by 45-60 per cent from reduction in demand over a two-year period preceding that.

Even so, most locals can’t afford these properties unless they generate black money. At best, it’s the same contractors who run the lending-to-contractors ship who invest in such properties in the hope of keeping their money in the “white market”. Salaried home buyers have moved away from such properties consistently.

The migrant workers are the worst affected by this development. Shyam Lal Tiwari, a contractor supplying cheap labour to construction sites, says while he has to pay his workers daily his payments have been delayed more and more over the past few years. “They do this to keep us in work and wait for black money to flow in or for the market to pick up, after which they make our payments. That is why every migrant keeps a stash for extreme emergency, including times when he might have to go back to his village for a few months or longer,” he says.

Tiwari is also a money lender. He says he does this to keep his workers in debt and working for him. He ends up paying them less per day, deducting their daily percentage from the wage while the principal stays the same. “There is no other way for me to keep workers from leaving. How am I to go find more and more workers regularly? Once they take a loan, they are in the loop. That is the reason every migrant wants to be self-employed or try not to take a big loan.”

This keeps small-time real estate in the urban villages going. There are always migrants demanding places to rent. It’s led to stable rates for accommodation. In the past five years, they have hardly changed. Satbir Bhati, a property agent based in Noida’s Sarrafabad village, says, “No one with 20-30 or more one-room accommodations wants a room to stay vacant. They make sure water and electricity are in place and rates are not very high since competition is very high. This was not the case when migrants were seen as outsiders and not accepted. Now they’re essential to the urban villages as they are a constant source of income in various forms, the most important being rent and labour-related jobs of various types as they work on lower-than-market rates.”

The best example of local angst against the real estate sector while depending on migrant workers is Bisrakh village in Greater Noida West. The village has a unique history. It is said the original inhabitants are disciples of Ravana who,they say, received his powers from Shiva while meditating in their village and then blessed its people who became his disciples. The villagers call themselves descendants of those disciples and on Dussehra, marked by the burning of Ravana’s idol, they mourn and fast praying for Ravana. When their lands had not been acquired, people of the region largely boycotted them unless they had relatives, but after Greater Noida West came up, a police station was built in the village and it is now at the centre of the upcoming modern city.

But villagers say they were cheated of their lands when acquisitions began in 2006. Taking a cue from Shahberi village, barely 8 km away, they too launched agitations to demand the land back and opposed the state’s acquisition policy and rates in 2012. It was accused of acquiring fertile agricultural land in the name of industrial development and then allotting it to builders. All the villages filed cases in the Supreme Court against the acquisition after Shahberi, but only Shahberi’s residents got the land back. The court said only those who had refused to accept the earlier compensation deserved to get their land back. The others could only demand higher compensation from the state. This was a setback to Bisrakh as well as adjoining villages like Raghunathpur and the villagers have developed a distaste for the 10-12 societies coming up along the eight-lane road running through Greater Noida West which shields their village from the “rich and developed area”.

But the migrants seem to be their friends. Over the years, many locals have built small flats for rent to the people “from the east” while others have opened shops catering to their needs.

Laxman Singh, a resident of Bisrakh, saved enough from rent from his 20-room building to get a shop in an upcoming mall nearby. “I hope to earn enough to buy a flat in one of these societies and shift my family there. I want my children to grow up among the rich kids and get the facilities these localities provide.” But he rues the rates–minimum Rs. 40 lakh–and that there aren’t any small homes. “I have only one child (girl aged 4) and need a 1BHK apartment but one can’t find many here and the available ones are too expensive.”

The presence of the migrants has meant nominal rates for all the construction in the village as well as a steady source of money for villagers. Representatives from the panchayat are among the few locals invited to functions celebrated by Bihari and Bengali migrants, most importantly Durga Puja, every year. Giriraj Singh, secretary of Noida Bihari Kalyan Samiti (NBKS), says, “Whoever has been friendly to us, we felicitated them when we could. Many locals have even helped us get voting rights as we have been here for around two decades; some have been around much before that.”

Migrants are a major part of the NCR’s cash economy. Noida is among the highest contributors to Bihar in terms of money remitted to the state. S.P. Shukla, senior officer in-charge of money orders, based in Noida’s sector-16 post office, says while 90-95 per cent of money orders from Noida are by migrants, more than 50 per cent are for Bihar; UP and Bengal come next. “The numbers have gone up heavily since demonetisation as we accept old notes while their relatives receive new currency. It used to be 2,000-2,500 earlier from the whole of Noida, now it is more than double on a conservative estimate.” The department, he says, has not had the time to calculate the exact figure as the workload is immense.

The postal department has been a saviour, but migrants like Manoj Mandal, who too had borrowed Rs. 10,000 from a local moneylender, fail to understand the mathematics of their exploitation. They try to keep a good sum at home for emergencies rather than return the borrowing at one go to save the larger amount they end up paying in the long run.

Mandal borrowed from the local money lender five months earlier when his wife got Chikungunya. She was hospitalised for a few days after which medication and regular visits to the local doctor would have cost more, which he could not afford at the time though he had saved Rs. 50,000. That money, he says, he and his wife decided not to touch. It was being saved for their daughter’s marriage. For immediate needs, he borrowed from the local lender and returned gradually over the coming months. His wife’s health improved but she could not work for close to three months. As a maid she was bound to lose her job to the competition if she disappeared so long, which did eventually happen. This resulted in lower earnings for the family. Mandal tried to make up by riding his rickshaw till late in the night and taking as many jobs for parties and functions as he could.

“I even took up two parties on a single day, taking two other men with me in return for a cut from their incomes apart from my earning from both places. I would take breaks and travel between them to keep an eye on the cooking at both places.”

He managed to keep repaying the lender regularly while also taking care of his wife and children but did not touch the Rs. 50,000 which he could have deposited in a bank and earned interest on if he had a bank account. He decided to take his wife to her village to meet her family, two brothers, while also meeting his own. She slowly recovered, having been weakened after the prolonged illness. Then, while returning to Noida, demonetisation struck.

Within a week of returning and finding his income dwindling and no way to keep the old notes with him, Mandal decided to approach the money lender and return the money owed. “The income was not even enough to sustain us, leave alone pay the daily amount to the lender. So we decided to repay the whole and convert the rest to new notes while we still could. Savings could happen later.”

A meeting of the Noida Bihari Kalyan Samiti (NBKS), a loosely orgainsed collective of Bihari migrants including some from UP and Bengal, was called at the government community centre in Noida’s sector-20 to guide people on how to go to banks and convert their money. “They also said as far as possible we should return the money we had borrowed in old notes if we could.”

When Mandal went to the money lender, he says the man was taken aback. But he insisted that he would take only “Rs. 400 for every Rs. 500” as the notes were old and not valid for long, which meant he had to return Rs. 12,500 for the Rs. 10,000 he had borrowed. This too was a long-term saving for Mandal, but he agreed, because he had made the calculations but had no other choice. The lender was shocked but had to accept. Most other borrowers also came in and were ready to pay more to return the borrowings at once. For a money lender, this is catastrophe as it is by keeping capital afloat in the cash economy that he makes a killing.

This is when he roped in Mandal, along with many others who had borrowed from him. He offered to help Mandal open an account in his wife’s or daughter’s name at the local State Bank of India branch, where he had an account. In turn he demanded that while Mandal go in regularly to return his money he also deposit Rs. 1000-5000 of his (the lender’s) money into the account. Mandal could pay it back later in cash. For every Rs. 1,000 the lender promised to take back only Rs. 900. Over the next 15 days, Mandal opened an account for his daughter and the money saved for her marriage was gradually deposited into it while his wife and he got Rs. 100 each in cash to get some of the lender’s money converted to new currency by standing in queues every day. This ensured that the family did not go hungry, while his daughter ended up having Rs. 55,000 in her account even after the principal was returned.

The deal with the lender is that for the coming five months they must pay Rs. 100 every day in cash or in installments they see fit at the same rate per day. By that count the lender would end up with Rs. 15,000, which is Rs. 1,000 less than the approximate money he should get as per the “Rs. 900 for every Rs. 1,000” deal. But neither man is disappointed. “In any case I had to keep paying him Rs. 100 every day to keep my savings intact for the coming months. Now I have an account, more saving, and not a single penny in karza (loan) from him.”

The most important change for Mandal is that while he feared the money lender earlier, he’s now treated with respect and sometimes offered tea when he visits him every few days. “Pehle Mandal bolta thha ab Mandal ji bolta hai,” he says with some attitude. There is a spring in his stride and the rickshaw runs faster ‘apne aap’ (on its own), he says.

After demonetisation thousands of migrants lined up to open bank accounts and deposit cash, or converted old currency to new in the initial phase until the banks started inking depositors’ fingers to prevent the deposit by proxy. There was a sudden fall in the number of people lining up. “The day Modiji announced poor people’s accounts were being used for illegal purposes we called a meeting and asked our representatives to warn our brothers against this. It has benefited a lot of people. But understand that the migrant from outside is anyway exploited in this urban space. Thankfully, this move seems to hit the rich more than the poor,” says Giriraj Singh of NBKS.

Money lenders hit by this found a way out eventually. While most tried to recover as much black money as possible, apart from the actual capital they had flowing in cash, they invested it further in the hinterland. Sukhram Gujar says he paid farmers working on his lands their dues for many months in advance, which they were happy to receive. He also contacted relatives who wanted to buy fertiliser since the government and private agencies supplying it were accepting old notes. Many of them ended up with fertiliser bags for the coming seasons too, as a result. Others were due to pay rent for their houses or land; he helped by paying in advance.

“Since they are my relatives they will return it eventually. But many others borrowed cash and I have assured that they need only pay back 80-90 per cent. I know this, too, is laundering but at least my cash is safe. The real sufferers will be those who have hoards of it. People like me will lose some and be able to retain some.”

But he plans to wind down the money lending business and focus more on farming. “Almost everybody who owed me has returned it. Those who haven’t will also gradually do so. Nobody is coming to borrow. That spells doom for this business. It will take a long time for people like me to start lending and making profits again,” he says.

Sonu Sharma, a smalltime farmer from Pipla village in Bulandshahr, was a beneficiary of people like Sukhram Gujar who lent their black money to be paid back in white later, after a deduction. His father works in the fields while he visits his village only at weekends to help out, working as an assistant in the accounts department of a bread factory in Greater Noida. They own a small portion of land while some other is on rent from villagers who do not live there anymore.

“Due to crop failures, we could not make much over the past few years and owed Rs. 50,000 to the owners. A local lender offered to pay them for us, demanding in return that we pay back only Rs. 40,000 over the next one or two years. We immediately took it. At least our land is safe and whatever we make from it will be ours.” Over the next year he plans to save more and says that if eventually the family falls short of money to be paid to the lender he will take a loan from his company, better than being under debt from elsewhere, especially the land owners.

Shyam Lal Tiwari says he has benefited from demonetisation. All the main contractors, especially the builders who owed him approximately Rs. 8-9 lakhs decided to pay him in advance. “Several contractors like me were called in and we stood in long queues to receive the money owed to us. One of the builders actually ran out of cash, leaving officials in the company baffled.” He used this money to supply and dump more raw materials at factories and construction sites where there was major demand. He also paid his suppliers and gave advances for orders to come later. While most workers came to pay his money in old notes fearing they would lose their savings, some who could not pay back all even now were told that they should consider the money salary in advance for the coming days.

“When I was being paid how could I be so greedy as to deprive my workers? I have told them that since I too have got my dues, they should consider the money as half salary for every day they work for me. I will pay more by myself but they will consider it as half salary being paid to me as loan every day. Of course, I’ll make sure I don’t lose money owed but I won’t force them to stay on by being in debt.” He claims very few of his workers have left his employment over the six weeks since demonetisation. Most want to stick around and are happier now that they’re debt free. “They work harder. Earlier I had to push them. They viewed me as an exploitative ‘sahukaar’ but now I’m the senior partner in our business.”

The surge in pride has been fed by the larger picture that the media too has provided. Most see reports of the fallout of demonetisation as propaganda by the rich. They feel the rich are criticising it as it affects them most, whereas the poor have gained and the move has led to a crackdown on black money. “The figures the government has come up with, while not fancy, indicate that a great amount has been deposited by the poor. These rich people who don’t know what to do with their black money are the ones making a hue and cry on television,” says Laxman Singh.

His wife Savita is happy that the real estate sector, which deprived them of their lands and well-deserved compensation, will now be hit even harder since there will be no black money to shield their ‘kaale karam’ (black deeds). “No matter what the world says, I know the rates (of flats in Greater Noida West) will now have to go down. Hopefully we too will be able to afford them now.” The couple also hopes that smaller flats, like the 1 BHK they aspire for, will be built now.

Subhash Chaudhary, a senior real estate consultant based in Gurgaon, says this hope might soon be fulfilled. “If the real estate sector has to cover up its losses and become relevant in the market they will have to focus on affordable houses for the lower middle class and middle class and not inflate rates by showing off villas and luxury apartments. India is a country of the masses, not classes. Until they become relevant for masses they will only be fooling themselves.”