In the days following the demonetisation of high-value banknotes on November 9, the Adivasis and rural poor of Andhra Pradesh and Telangana have fallen back on bartering to tide over the cash crunch. They exchange their goats, chicken, pigs, calves, buffalo, honey, tamarind, forest millets, jackfruit and gum for essential goods.

The immediate aftermath of the cash withdrawal caused a quandary for poor people in the border districts of Srikakulam, Vizianagaram and Visakhapatnam in Andhra Pradesh and Bhadrachalam, Khammam, Warangal, Adilabad, Bhoopalapalli, Kothagudem and Karimnagar in Telangana. Their employers continued to pay them in old notes, which the markets refused to accept, and new currency notes were not easy to come by.

Farmers and contractors said they had good sreason to pay wages in demonetised Rs 500 notes. “We did not get smaller notes ourselves and had only old notes,” said G Mallikarjuna Reddy, a landlord in Chintur in East Godavari district of Andhra Pradesh.

In this situation, help came from the Annalu, or elder brothers, as members of the Communist Party of India (Maoists) are known in these parts. The Annalu put pressure on traders to adopt the barter system, and used muscle power wherever they met with resistance.

This became explicit on November 22, a fortnight after demonetisation, when a poster on the wall of a residential school in Bayyaram, in Kothagudem district of Telangana, asked traders and farmers to accept forest produce from the people in exchange for essential goods. It was signed by Sagar, the spokesman for the North Telangana Special Committee of the Communist Party of India (Maoists).

The switch to a barter system was not limited to just the two southern states. In Chhattisgarh, for instance, petrol pumps on the highway from Bastar to Jabalpur are accepting payments in kind for fuel. Sahadev Ikshu, a farmer, said he had used tamarind to pay for petrol for his scooter. Other communities in the state are reportedly using honey, tamarind, Mahua liquor and forest fodder as currency.

Exchange and token systems

The Maoists have conducted a campaign advocating barter as an alternative to cash in the five states. They put up posters to thie effect in the village markets of Bastar and Dantewada in Chhattisgarh; Malkangiri and Balimela in Odisha; Gadchiroli in Maharashtra; Adilabad and Mahadevpur in Telangana; and Paderu and Sileru in Andhra Pradesh. They also spoke with traders to convince them to give rice, salt, edible oil and kerosene in exchange for forest produce such as honey, firewood, tendu leaves (beedi), Mahua liquor and fodder, said farmers.

The barter system soon went beyond markets with bus and auto drivers, contractors, doctors and even schools accepting forest produce in the place of cash.

According to civil rights activists in Telangana and Andhra Pradesh, Maoists have come to the rescue of the poor previously too, in times of flood and drought. Then also, as now, they put pressure on district officials, businessman and traders to distribute grain to those in need. In 2000, 2002 and 2008, they even looted Public Distribution System shops to hand over grain to the poor in what came to be known as “drought raids”.

Such acts by the Maoists have prompted the police in these districts to also play good Samaritan during crises. “By giving clothes, rice and grains in tribal villages during floods and drought, we have contained the Maoist influence,” said Andhra Pradesh Director General of Police N Sambashiv Rao. The trend has continued in this season of demonetisation as well. “During demonetisation too, the police gave rice, oil and salt in tribal villages free of cost,” Rao added.

Some believe it was pressure from the Annalu that led Telangana government to start an experiment of issuing tokens in small denominations that could be exchanged for groceries and vegetables. The token system was implemented in some markets in the towns of Sangareddy, Siddipet, Warangal, Karimnagar and Nizamabad districts. Anyone with a bank account linked to an Aadhaar number could get tokens issued in the denomination of Rs 10, Rs 20 and Rs 50. These tokens could be used to buy vegetables in rythu bazaars or farmers’ markets. Customers could return unused tokens and get the money credited back to their accounts, while vendors could deposit the tokens and get an equivalent amount of money in their accounts.

Accepted by all

A poster on a wall in a village in Chhattisgarh’s Bastar explained why the Maoists had decided to help the poor. Calling demonetisation the design of the Bharatiya Janata Party and Telugu Desam Party to weaken the rebels’ resource base, Kakarala Madhavi, Andhra Odisha Border secretary of the Communist Party of India (Maoist), said, “Whatever we have is people’s resource and it will not dry up as long as we stand for the poor and needy.”

As the Maoists played saviour to the people, the police chose to either follow in their footsteps or to let them carry on with their work, only monitoring the situation to ensure they did not use the villagers to exchange their own old notes. “We did not interfere as we felt that was the best option available,” said a senior officer at the office of the Telangana director general of police.

District officials in Khammam, Telangana, said they had no problems with the Maoist diktat as long as it was for the benefit of the people. However, district and police officials did object when the rebels ordered traders in border towns and villages to exchange old notes or give change. “We did not accept the Maoist intervention in exchange of notes but allowed bartering,” said RG Hanumanthu, district collector of Bhadrachalam in Telangana. “Exchange of notes with local traders would have become a money conversion channel for the Maoists.”

Govind Naik, a trader near Utnoor in Adilabad, said, “Whatever the Maoists told us about the note ban and bartering was later confirmed to us by district officials and hence, we agreed.”

The Human Rights Foundation’s Jeevan Kumar, who toured Maoist areas during the early days of demonetisation, said people in these places were less worried about currency exchange than elsewhere in the country. “There is no black money in the forests, remote villages or with Maoists and hence there was no issue of police or administrative interference when villagers resorted to bartering goods to meet their day-to-day needs,” he said.