The “ill” effects of demonetisation


It’s said that “Health is Wealth”, but what happens when all the wealth we own centres around money? Sure, wealth ensures that we have access to the best healthcare facilities, with doctors and nurses at our beck and call, but take away that wealth for a moment and we are left with nothing. There is no doubt that healthcare in our country is a luxury which only the rich can afford, for we all know the state of government run hospitals and clinics. Now demonetisation might’ve been a bitter pill for millions of us to swallow, giving thousands of individuals a panic attack when it was announced, but perhaps no one truly imagined the “ill” effects it would have on our lives.

A recent report indicates that there was around a 15% dip in healthcare expenditure after demonetisation came into force. This was on account of lack of e-payment facilities in hospitals and clinics in small towns and cities, in addition to the fact that hospitals refused to treat patients who did not have new currency notes to pay with. These numbers might make us feel that medical treatments became cheaper post-demonetisation, but the fact remains that this dip was caused due to lack of money in the market following the move.

Shock therapy – for the jolted

Prime Minister Narendra Modi’s decision to demonetise currency attracted more eyeballs than the US elections. While the results of the US Presidential elections might’ve shocked the world, it seemed as though the impact was felt largely in India, with doctors across the country seeing a deluge of patients who were reeling under shock and anxiety. Individuals with unaccounted wealth were seen rushing to get treated for anxiety disorder and stress, with umpteen cases reported all across India.

Patients reported instances where hospitals refused to treat them if they didn't have new currency to pay with
Patients reported instances where hospitals refused to treat them if they didn’t have new currency to pay with


While we might have heard about people whose life revolved around money, the days after demonetisation truly proved the value of money, or the lack of it in our life. To the uninitiated, the average value of a human life is anywhere between $7 million and $9 million. Yup, that is the average value of a human life according to the U.S Office of Management and Budget. Now we might feel that our life is valuable, but demonetisation showed us the actual value of human life in India. In a period of 30 days after the move, close to 100 demonetisation related deaths were recorded across the nation. Reasons for death ranged from suicides due to money shortage, to deaths due to hospitals denying treatment to patients who did not have new currency, to deaths in ATM lines and bank queues. These were just stories which were reported, with plenty more unaccounted deaths taking place in the country.

Not only were there deaths directly on account of demonetisation, farmers had to face an acute shortage of funds to procure seeds, which saw them losing out on their Rabi season, leading to a domino effect of sorts.

Insurance penetration in India

Take a quick look around you. How many of your friends or colleagues have a health insurance plan? Very few, this is perhaps what most of us would say if we were asked this question. Sure, employees working in organised sectors have the privilege of getting a health insurance plan which covers their basic needs, but what about those individuals who belong to the unorganised sector. A survey conducted by NSSO (National Sample Survey Office) under the Ministry of Statistics and Program Implementation found that only 14% of the rural population had health insurance. The urban populace didn’t fare exceedingly well either, with just around 18% covered under any form of health policy. Given these numbers, one could imagine the rude shock which patients had to undergo when they were denied treatment for not having “legal” tender. While government hospitals continued to accept demonetised notes until a particular period, there were reported instances of hospitals turning away patients who had no other means to pay.

Sure, one could argue that credit card payments and bank transfers could’ve been used, but in a country where less than 27 million credit and 740 million debit cards were in use till October 2016, there was a huge percentage of our population which didn’t have access to these payment modules, and these were the people who suffered the most. With close to 70% of all medical bills being paid by cash, demonetisation truly hit patients hard.

Dip in medicine sales and diagnostic services

Medical stores were seen as the saviour by thousands of people after November 8. Medical stores were obligated to accept old currency notes till November 24, seeing an improvement in overall business. It was after this period that there was a slight dip in sales, as a majority of medical stores were not equipped to handle cashless transactions. This, however, seems to have been resolved, with most of them migrating to new payment systems now. While major cities saw no issues with payments, it was the smaller towns which were impacted the most.

Clinics offering diagnostic services in tier-2 cities and towns saw a 15% drop in business in the period after demonetisation. With attenders spending hours in ATM lines rather than hospitals, tempers too were frayed, but there wasn’t much anyone could do at the moment. Joel Dsouza, a media professional decided to postpone his “Myringotomy” surgery as he found it hard to arrange sufficient cash during that period, opting to wait until banks and ATMs allowed higher withdrawals. Joel’s wasn’t an isolated incident, with hundreds of patients postponing treatments which were not immediately required.

In the end one needs to ask this question: Did the end justify the means? Some might say yes, the end did justify the means, but ask family members of those who lost a loved one during this period and they would beg to differ, harping on the “ill” effects of this move instead.


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