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Private hospitals exempt from payments of old notes following demonetisation

The Indian government recently introduced measures to reduce black money, or the accumulated, unaccountable wealth hoarded for reasons such as tax evasion. To this end the old Rs. 500 and Rs. 1000 notes have been declared to no longer be legal tender. The sudden implementation of this strategy has been called into question, the aftermath of which has caused public chaos and predictions of slowing GDP growth by 1% by HSBC. In Private hospitals this has led to the refusal of patients attempting to pay in the old notes, government ministers have attempted to intervene in this but the practice continues as the warning by ministers has not yet become law.

Starvation has already become an issue, primarily amongst labourers working a day to day wage, Delhi labour minister Gopal Rai wrote on Friday 18th November to Prime Minister Narendra Modi. Many labourers are not literate and do not have bank accounts, dealing primarily with traders in cash. The fall in sales due to the cash shortage has left many returning to their villages as they are simply not being paid.

In urban locations problems are arising due to interruptions in infrastructure, with workers not being paid, leaving many who were reliant on daily wages paid in cash left struggling to feed their families. This lack of payment is causing some labourers to simply stay at home. Some, such as truck drivers, have no cash with which to buy fuel, leaving the vehicles stranded and halting the supply chain of food and resources.

This “surgical strike” on counterfeit and black money, termed by Indian Prime Minister Narendra Modi, has been shown to have primarily affected the poor and working class. Opposition politicians such as CPI(M) general secretary Sitaram Yechury coining the term Modi Antionette and branding the policy as “If you don’t have paper, use plastic”.

In terms of private healthcare an increasingly grim story has become more common as the days go by, with hospitals refusing the treatment of anyone attempting to pay with the now defunct currency. This began as a small number of cases but it increasingly becoming a frequent matter, with numerous deaths occurring. While government hospitals are required to accept the notes an oversight in this legislation means private hospitals are exempt from this. Until legislation is put in place to prevent this it means that a potential 70% of the Indian population is not guaranteed access to healthcare.

With all these factors in mind, and the potential future implications of the downstream effects of neglected infrastructure and crop growth, this does not appear to an issue that will be resolved in a short period of time. The scene has been set for future repercussions that could damage both the Indian economy and its people for years to come. With workers not being paid it may simply become the case that many will not be able to afford the payment of medical bills, potentially requiring .

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