note demonetisation

'I haven't eaten all morning': Chaos on the streets as Indians struggle to break Rs 500 notes

The poor were hit the hardest the day after India's two biggest currency denominations were demonetised to fight black money.

At 1.30 on Wednesday afternoon, Vijay Padwal stood by the ticket counter at Mumbai’s Byculla railway station and looked like a defeated man.

For nearly three hours, the mathadi worker (porter) had been trying to get change for a Rs 500 note. That was all the cash he had. He wanted to buy a meal and head back to work. He had tried petrol pumps and grocery stores, medical shops and hospitals, but was summarily turned away from everywhere. He had stood in every queue at every ticket counter at the station, only to be told there was no change left to give him.

“I’m not worried about the ticket, I will just get into the train ticketless,” said Padwal. “But I need to break this Rs 500 note because it is not just my money – it is the combined daily wage of three of us labourers, and the other two need to be paid too.”

Vijay Padwal with the Rs 500 note that was given to him on Wednesday morning to serve as three people's wage.
Vijay Padwal with the Rs 500 note that was given to him on Wednesday morning to serve as three people's wage.

Padwal felt both helpless and angry at his employer, who had paid him the day’s wage with a Rs 500 note just that morning. “Seth knew the note is invalid today, but still forced me to take it,” he said. “When I tried to ask him for change, he told me to either take the 500 or not get paid at all.”

Padwal was one among thousands of desperate people caught in the midst of chaos a day after the Central government demonetised currency notes of Rs 500 and Rs 1,000 to crack down on black money. The ban on the notes came into force at midnight on November 9, and as an immediate measure to stop their circulation, the government announced that all ATMs would be shut on November 9 and perhaps even 10. Banks and post offices also stayed closed on Wednesday, and when they reopen on Thursday, people will have 50 days to exchange their suddenly invalid notes for new ones.

To help people manage for the period during which ATMs would not be operational, the demonetised notes were supposed to be accepted at designated establishments, including petrol pumps, bus and railway ticket counters, airports, crematoria, burial grounds and government-run hospitals, pharmacies, milk booths and consumer co-operative societies. On Wednesday, the government added toll plazas to the list.

But in a country where the two denominations of demonetised currency notes account for 86% of all notes in circulation, it didn’t take long for all these places to run out of notes of lower value. What followed was utter confusion, desperation and disorder across the country, as people struggled to break their big notes just to eat a meal or buy essentials.

‘No more change left to give’  

The chaos at petrol pumps began on Tuesday night itself, and continued all day on Wednesday. Across Mumbai, crowds of bike and car-owners got into repeated arguments with petrol pump staff for refusing to provide them with change.

“As per government rules petrol pumps are supposed to accept big notes and provide change, but these people are almost shutting down the pump and harassing the public,” businessman Vikram Shah as he refused to budge from a gas station in South Mumbai.

The petrol pump staff, tired of trying to negotiate with customers, threw up their hands in despair. “We have no more change left to give people for their big notes,” said one indignant staff member. “We would gladly accept Rs 500 notes if customers filled up petrol worth that full amount. But customers are deliberately asking for small refills for the sake of change – where do we produce that money from?”

At railway stations, the situation was no better, with almost everyone in the ticket queues bringing Rs 500 notes to the counters. In the morning, many commuters were lucky enough to get change, particularly if they had renewed their monthly passes or bought several tickets together. By afternoon, however, the mood completely changed as railway staff across the city said they were out of notes of lower denominations.

“I’ve been waiting here for 30 minutes, watching you collect smaller notes from others – how can you keep turning me away?” one agitated commuter shouted at the woman behind a railway ticket counter in suburban Bandra. The woman attempted to make the man leave, but when it didn’t work, two police personnel showed up behind the counter, ordering him to pay for his ticket in smaller notes or leave.

‘How will I buy food for the night?’  

For many citizens queuing up at railway counters on Wednesday, train tickets were just an excuse to get change for more pressing needs.

“I haven’t eaten anything since morning because no restaurant is accepting my big note,” said Bablu Biswas, a migrant construction worker in Mumbai who has no kitchen in his shared, rented slum room. “I’ve tried to buy local train tickets in bulk in the hope of getting some change, but it hasn’t worked. So what do I do with my note?”

In Chennai, domestic worker A Chandrakala is in a similar situation. “I just received my Rs 3,000 salary in Rs 500 notes,” she said. “I don’t have any other money, so how will I buy food for the night?”

Some good Samaritans attempted to help other citizens with their grocery and food needs. In Mumbai’s Grant Road market, kirana store owner Kiritbhai Shah decided to accept Rs 500 notes from his regular customers so that they could get their groceries while his business could also go on. “I’ve just been writing down the note numbers and names of the people giving me these big notes, so that I can return the notes if they are not accepted by the bank.”

In Chennai, meanwhile, tea shop owners P Sunder and T Joseph agreed to give their customers items like milk or biscuits for free if they really needed the food. “We have been asking customers to pay later, whenever they get the change,” said Joseph. “I think what Modi is doing is right. So many rich people sitting on crores of rupees will be the ones affected. Poor people like us will only be inconvenienced for a couple of days.”

Small businesses slow down  

For most small businessmen relying on cash payments, business was slow or idle on Wednesday. Many bazaars in Mumbai wore a slightly deserted look in the morning, a time when they are usually bursting with activity.

An almost-deserted market in Mumbai.
An almost-deserted market in Mumbai.

Mumbai fruit vendor Ishrat Khan usually sells goods worth Rs 3,000 by 9 am every morning, but on Wednesday, there was barely a trickle of customers. “Most people are coming with Rs 500 notes, and I send them back,” said Khan. “I also need small notes to live on for the next two days, and I’m worried for my family back in the village in Uttar Pradesh,” said Khan, the only earning member of his family who sends a money order to his aged parents every month.

Khan’s village in UP’s Badaun district is so remote, even the nearest ration shop and bank are more than an hour’s drive away. “It is difficult for the elderly,” he said. “Besides, looting is so common in the villages, people prefer to store their money in big notes so that their wallets don’t look fat.”

Ishrat Khan made very few sales on Wednesday morning.
Ishrat Khan made very few sales on Wednesday morning.

Many fruit and vegetable vendors were forced to sell some of their goods on credit, while others were fortunate to get their goods on loan themselves from the agricultural produce market.

“I managed to get my day’s maal of potatoes and coconuts on credit from the Vashi APMC, but my customers are not buying my goods today,” said Chandrakant Malusare, an intermediary wholesaler in Mumbai. “I wouldn’t mind taking Rs 500 notes if I had the change, but I don’t.”

Will corruption remain?  

Drivers in the taxi and auto business were hit by the note ban too, as many urban commuters chose app-based aggregator cabs instead. “I’ve barely ferried anyone today, and I’m just going to have to prepare to deal with this for a few more days,” said Ambeshah Sharma, a taxi driver in Mumbai.

Although Sharma believes that the demonetisation is a good means of catching the many low-level black money hoarders in his home state, particularly “local politicians”. But he is not convinced this move will do anything to curb corruption in India. “Since this morning, I’ve seen so many cases where desperate people are paying bribes to petrol pump staff trying to break their big notes,” said Sharma. “If that’s not corruption, what is it?”

Ambeshah Sharma with his taxi.
Ambeshah Sharma with his taxi.
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