MUMBAI/NEW DELHI (Thomson Reuters Foundation) - Business has been slow at the Thakkar Bappa Colony shoe manufacturing hub in eastern Mumbai since the Indian government withdrew high-value bank notes last month in an attempt to curb tax evasion and counterfeit currency.
Orders to the numerous shoemakers lining the slum’s narrow streets have almost dried up due to a dearth of bank notes in circulation, say the businesses which mainly rely on cash transactions.
Yet while factory owners complain of a slump in profits and a dip in productivity, child rights activists say “demonetisation” drive has a silver-lining: it has stemmed the steady stream of children trafficked here to stitch shoes.
“Children came from Uttar Pradesh, Bihar and Rajasthan to work here,” said Sugandha Patade from the charity Pratham which rescues and rehabilitates child workers in the area.
“In the last month, no new child workers have come and those who were working here have been sent back to their villages as there are no orders for them to work on.”
Police agree the cash crunch could be hitting traffickers who buy and sell children for labour, but say more detailed analysis is required before they can make a direct link.
India has almost 6 million child workers, according to the International Labour Organization (ILO), but activists say this is a gross underestimate.
More than half are employed in agriculture and more than a quarter in manufacturing - embroidering clothes, weaving carpets or making match sticks. Children also work in restaurants, shops and hotels and as domestic workers.
The children - mostly from poor rural areas - are taken to cities by gangs who sell them into bonded labour, force them into sex work or hire them out to unscrupulous employers. In many cases, they are unpaid.
The shock currency move, announced on November 8 by Prime Minister Narendra Modi, aims to bring billions of dollars worth of unaccounted wealth which people are hoarding, or “black money”, into the mainstream economy and curb corruption.
High denomination 500- and 1,000-rupee bank notes have ceased to be legal tender for transactions and can only be exchanged at banks for smaller notes or the newly introduced 2,000-rupee note.
Banks are meant to alert the Reserve Bank of India and tax authorities of any unusually large sums being exchanged which may be the product of illicit activities.
There is no study on the impact of banning high denomination notes on child labour, but some children’s groups say they have anecdotal evidence of its repercussions in areas such as Mumbai, Delhi and other urban centres.
Child rights activist and Nobel Laureate Kailash Satyarthi, who has welcomed the demonetisation policy, told the Thomson Reuters Foundation that human trafficking and child labour were among the largest sources of black money.
His own charity - Bachpan Bachao Andolan (BBA), or Save the Childhood Movement - has reported fewer children in areas where there are small-scale factories and ‘placement-agencies’ which often traffick girls and women for domestic work.
“These days, they don’t frequently see transportation of children by traffickers in these areas and they are not able to operate so easily because they cannot use the black money which funded their illicit businesses before,” said Satyarthi.
BBA has for example found no cases of girls being trafficked at three popular railway stations in the northeast state of Assam over the last two months, compared to a monthly average of six before the demonetisation policy.
In Uttar Pradesh, the charity Safe Society says five children were rescued in the last month from the town of Gorakhpur, against a monthly average of 15 to 20.
But Satyarthi warned that child labour would persist unless human trafficking is addressed in the impoverished areas where the children are taken from.
“This means punishing offenders, providing protection on the ground such as introducing social welfare programmes for the poor, raising awareness on trafficking and child labour, and providing good quality education,” he said.