note demonetisation

Sales down, wages hit: Weeks after demonetisation, it's still the same story at a Patna mandi

The daily-wage workers, whose earnings have crashed from Rs 500 to Rs 50, are the worst affected.

On a chilly December evening, a group of daily-wage workers at Patna’s Maroofganj mandi sat around a small fire warming themselves at the end of the day’s work, before catching trains or buses to the villages where they live. It had been another day of little work at the mandi.

Over a month after Prime Minister Narendra Modi scrapped Rs 500 and Rs 1,000 notes, volumes are still low at Maroofganj, which supplies cooking oil, rice, pulses and other provisions to the state capital. “Nothing has changed for us,” said Dilip Kumar Singh, who travels every day from his village on the outskirts of Patna to work at the mandi “We are still earning Rs 50 a day, a long way down from the Rs 400-Rs 500 we used to make earlier.”

His assertion echoed what this reporter had heard during an earlier trip to the mandi, 10 days after the demonetisation announcement on November 8. At that time, wholesalers were open for business but both stock arrivals and sales were down to a fifth of what they used to be. Unable to predict supply or demand, the market was frozen. But despite this churn, commodity prices were curiously unchanged. During that visit too, labourers had complained that their daily earnings had plummeted from Rs 500 to Rs 50.

What the traders say

Dilip Kumar Singh said the situation at the mandi was the result of some traders travelling to Gaya, Muzaffarpur and beyond to take advantage of low prices in parts of the hinterland. However, the traders this reporter met denied this. Instead, they flagged other concerns.

Sanjib Kesari, a wholesaler, said business had improved and more customers were now coming to the mandi. Prices, too, were moving – cooking oil, for instance, had risen Rs 3-Rs 4 in the last 20 or so days. But, the situation was nowhere near normal.

Wholesalers’ volumes remain modest. According to them, two factors are at work here. First, traders are chary of conducting too many transactions. “No one wants to put more than Rs 2.5 lakhs into their bank accounts,” said Kesari. “That might result in an income tax notice. We are hoping there is greater clarity by the time the year ends.”

Second, they are struggling with inadequate working capital with banks just giving out Rs 24,000 a week. “That is too little,” said one trader. “Just one sack of mustard costs Rs 3,000.” Even the higher weekly withdrawal cap of Rs 50,000 for current account holders is too low, and the amount is only sporadically available, they said.

That said, most of the traders told that they welcomed notebandi, which they see as an attempt by the government to bring sectors like theirs into the formal economy.

Anger in depoliticised times

Caught in this situation of reduced earnings and rising food prices are the workers, who are struggling to feed their families on a measly Rs 50 a day. Both rice and wheat have climbed from Rs 20 a kilo to Rs 30. As a result, families are cutting back on vegetables, said Dilip Kumar Singh.

That Wednesday evening, he and his fellow workers sitting around the rapidly ebbing fire expressed anger at the Bihar government’s poor welfare delivery. They said that if the National Rural Employment Guarantee Scheme worked properly, they wouldn’t be in such dire straits.

Even the Public Distribution System functions poorly, said Kumar. “We get 15 kilos of wheat and 10 kilos of rice from there, but not only are both substandard, we also do not get them each month,” he added.

Instead of continuing with the scheme, the daily-wager said the government should just deposit Rs 1,000 into everyone’s accounts each month, so that they could buy the grains themselves.

These are, however, depoliticised times. The workers said no leader had visited the mandi to check on how it was doing, and that they did not have a union that could raise these issues. Nor can they afford to lose a day’s work by agitating. And so, said an old man at the fire, “we are just living day to day”.

Wholesalers' volumes remain modest at Patna's Maroofganj mandi over a month after demonetisation. Photo credit: M Rajshekhar
Wholesalers' volumes remain modest at Patna's Maroofganj mandi over a month after demonetisation. Photo credit: M Rajshekhar
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