note demonetisation

'All these notes suddenly have no value:' Small traders in villages struggle to cope with rupee move drives down border villages in Karnataka and Tamil Nadu and finds that small businesses are reeling under the decision.

In the borderlands of Chikka Tirupathi and Hosur, the first day of the demonetisation of Rs 500 and Rs 1,000 notes by the Indian government was marked by problems in day-to-day trading for small businesses and a frenzied hunt for Rs 100 notes for families.

Shankar, who runs Ishwar Digital Studio at Chikka Tirupathi, a temple town about 20 km east of Bengaluru, saw much lower business at his photo studio on Wednesday. On an ordinary day, the photographer, who shoots everything from stills to video for functions, earns between Rs 2,000 to Rs 3,000. On Wednesday, he earned just Rs 100. “People do not have change,” he said.

Working capital hit

The story across the border in Tamil Nadu was the same. In the industrial cluster at Hosur, Ahsan Basha was sitting idle in his auto rickshaw near a bus stand when spoke to him. Earlier in the day, he had given Rs 800 back as change to a passenger who gave him a Rs 1,000 note for a Rs 200 fare. He had no more change – and so, no more business.

In the 22-km drive from Chikka Tirupathi to Hosur, this is a narrative this reporter heard often – from Anand, a flower-seller in a market in Hosur and from those running a motley set of businesses – petrol pumps to hardware stores and auto rickshaws.

In conversations with them, a pattern emerged. On the day after Prime Minister Narendra Modi announced on Tuesday that Rs 500 and Rs 1,000 notes would no longer be legal tender, in an effort to crack down on the black money economy, the worst affected were small businesses. Vegetable sellers said Chikka Tirupathi’s Shankar, who buy merchandise for their shops every morning, faced the biggest brunt. “They keep Rs 5,000 to Rs 20,000 as their working capital,” Shankar said. “Most of that is in Rs 500 notes. It is this money that they use for buying stocks every day. And these notes suddenly have no value.”

Businesspeople, like the flower sellers outside the Chikka Tirupathi temple, will have to wait for enough Rs 100 notes, or the new Rs 500 and Rs 2,000 notes, to come into circulation. “Till then,” Shankar said, “their business will suffer.”

Slightly larger businesses, like Jivita’s tailoring shop in the border town of Bagalur in Tamil Nadu were more optimistic. “We have enough money for ‘rotation’ [working capital] for a week. After that, it will be a problem.”

Scrambling for change

In all these towns, the ban has hit people in different ways. With businesses not accepting these notes and banks closed, people without smaller denominations have suffered. Starting Tuesday night, people started queuing up outside petrol pumps, filling up their vehicles in the hope of spending their Rs 500 and Rs 1000 notes and getting some change to tide them over the next few days.

The manager of one petrol pump in Hosur said his the staff were trying to hold on to Rs 100 notes. “They are worried their families will run out of Rs 100 notes," he said. "And so they were giving us mostly Rs 500 notes.” The petrol pump’s owner K Venugopal said that one man had wept at the store. “He only had Rs 500 and so he could not eat.”

Basha, the auto driver at Hosur concurred. “I am known here. I can get a cup of tea on credit," he said. "People who just reached Hosur without enough small notes were really stuck.”

Most people this reporter spoke to were optimistic that things would go back to normal once the new currency was circulated or enough Rs 100 notes were available in banks. However, on Wednesday evening, staff at both the Indian Bank branch at Bagalur and a cooperative bank in Hosur said additional Rs 100 notes were yet to arrive.

“We will open tomorrow morning," said an employee of the Indian Bank. "People can come with their passbooks and exchange their notes.”

Those who do not have bank accounts, however, will have a problem. A lot of small traders, said Shankar, still keep their money at home. And starting Thursday and Friday, when banks and ATMs reopen, if enough Rs 100 notes or the new currency notes do not percolate deep into the country swiftly enough, the liquidity crisis in small business and households is only likely to worsen.

We welcome your comments at
Sponsored Content BY 

Some of the most significant innovations in automotive history made their debut in this iconic automobile

The latest version features India's first BS VI norms-compliant engine and a host of 'intelligent' features.

The S-Class, also known as Sonderklasse or special class, represents Mercedes Benz’ top-of-the-line sedan line up. Over the decades, this line of luxury vehicles has brought significant automotive technologies to the mainstream, with several firsts to its credit and has often been called the best car in the world. It’s in the S-Class that the first electronic ESP and ABS anti-lock braking system made their debut in the 20th century.

Twenty first-century driver assistance technologies which predict driver-behaviour and the vehicle’s course in order to take preventive safety measures are also now a staple of the S-Class. In the latest 2018 S-Class, the S 350 d, a 360-degree network of cameras, radars and other sensors communicate with each other for an ‘intelligent’ driving experience.

The new S-Class systems are built on Mercedes Benz’s cutting-edge radar-based driving assistance features, and also make use of map and navigation data to calculate driving behaviour. In cities and on other crowded roads, the Active Distance Assist DISTRONIC helps maintain the distance between car and the vehicle in front during speeds of up to 210 kmph. In the same speed range, Active Steering Assist helps the driver stay in the centre of the lane on stretches of straight road and on slight bends. Blind Spot Assist, meanwhile, makes up for human limitations by indicating vehicles present in the blind spot during a lane change. The new S-Class also communicates with other cars equipped with the Car-to-X communication system about dicey road conditions and low visibility due to fog, rain, accidents etc. en route.

The new S-Class can even automatically engage the emergency system when the driver is unable to raise an alarm. Active Emergency Stop Assist brings the car to a stop if it detects sustained periods of inactivity from the driver when Active Steering Assist is switched on. If the driver doesn’t respond to repeated visual and audible prompts, it automatically activates the emergency call system and unlocks the car to provide access to first responders.

The new Mercedes-Benz S 350 d in India features another notable innovation – the country’s first BS VI norms-compliant car engine, in accordance with government regulations to control vehicular pollution. Debuting two years before the BS VI deadline of 2020, the S 350 d engine also remains compatible with the current BS IV fuels.

The S 350 d is an intelligent car made in India, for Indian roads - in the Mercedes Benz S-Class tradition. See the video below to know what drives the S-Class series by Mercedes Benz.

To know more about the 2018 S-Class, click here.


This article was produced by the Scroll marketing team on behalf of Mercedes Benz and not by the Scroll editorial team.