note demonetisation

'Is the pain worth it?': 50 days after demonetisation, rural South India has a few questions

Low bank deposits remain a concern in three towns on the Karnataka-Tamil Nadu border.

On November 9, life suddenly came to a standstill in Chikka Tirupathi, Bagalur and Hosur. As in the rest of India, the first day of demonetisation in these towns abutting the Karnataka-Tamil Nadu border was marked by problems in conducting day-to-day trading for small businesses and a frenzied hunt for Rs 100 notes for families.

The response to the government action was mixed on that first day. As the cash crunch sank in, small traders figured out that their businesses would take a hit until they replaced their Rs 500 and Rs 1,000 notes. Slightly larger enterprises, such as Jivita who runs a tailoring shop in Bagalur in Karnataka, were more optimistic. “We have enough money for rotation [working capital] for a week,” she said.

On the whole, it was a day of uncertainty. Notebandi was a sweeping decision. People weren’t sure how long it would take to exchange their old cash and for the situation to return to normal. At a branch of the Indian Bank in Bagalur, a bank official was calm. “We will open tomorrow morning,” he said. “People can come with their passbooks and exchange their notes.”

How things look now

On December 28, travelled the 30 km stretch between Chikka Tirupathi and Hosur one more time. How were people we spoke to on Day One doing on Day 50?

The first person we met was Shankar, who runs the Ishwar Digital Studio in Chikka Tirupathi, a Karnataka temple town about 20 km east of Bengaluru. On the first day of notebandi, his earnings had plummeted from Rs 2,000-Rs 3,000 to Rs 100. Since then, there has been some improvement. His daily income has now climbed to Rs 500. In recent days, his cash position has improved as well. Three days ago, his bank began disbursing Rs 10,000 per demand slip.

That said, problems persist. Shankar shoots photographs and videos for functions. Many of his customers have deferred payments. “I usually collect 50%-75% of my fees an hour after the function, and the rest when I deliver my photos and videos,” he said. In the last 50 days, though, he is yet to recover Rs 100,000 from six of his customers, despite giving them his bank account number. This is because some have not received their salaries while the others are themselves waiting for cash to be credited into their bank accounts.

As a result, he has had to cut back on his food, buying only Rs 1,000 worth of it instead of Rs 5,000 earlier.

On that first day, Shankar had spoken mostly about working capital difficulties people were likely to face. Fifty days later, his support for demonetisation is more qualified. He said friends, too, were even more in favour of the government policy after the income tax department raids.

For his part, he said the government must also crack down on gold and land holdings. “Families should not be allowed to hold more than 1 kilo [of gold],” he said. “And no one should have more than 2 acres [of land].” He also suggested changing the Rs 2,000 notes every five years. “The Rs 500 and Rs 1,000 notes continued for 20 years,” he said.

The photo studio owner believes that without these measures, India will go back 20 years. “The Rs 2,000 note will add to the black money problem – a man can walk around with a crore in his pockets,” he said.

The view from the bank

About 10 km down the road, the mood at the Indian Bank branch at Bagalur was mixed as well.

Cash availability at the branch has improved in the last two weeks, said a bank official. “We have been able to pay people as much as the Reserve Bank of India’s cap on withdrawals allows,” he said. What has tempered his optimism, though, is low deposits. Daily deposits in savings accounts have come down to Rs 50,000 from around Rs 20 lakhs before demonetisation, he said, adding, “People are worried that if they put money in the bank, they might not be able to get it out.” This echoed what found in Andhra Pradesh’s Chittoor town, where too withdrawals outstrip deposits.

M Jayaramaiah, who runs a hardware store in Bagalur, nodded in agreement at the bank official’s talk of low deposits. “People are afraid,” he said. “They have never seen such a situation. They will keep some cash at home. They cannot go stand at the bank for another four days.”

This is a serious problem. Banks use the cash that is deposited for disbursals. Right now, disbursals at this Indian Bank branch have improved because it is getting additional currency from the Reserve Bank of India, the bank official said. But there will not be an endless supply of these notes, he added.

In part because, post-notebandi, cash availability in India’s banking system is highly uneven. As found in Bihar, larger centres get far more cash than smaller ones. Similar patterns are playing out in Tamil Nadu as well.

There is an acute shortage of cash in several blocks of Krishnagiri district, about 50 km from Hosur, reporters in the area said. Here, rural women have been camped outside banks for days. At some point, the Reserve Bank will have to start feeding cash to these branches.

Here lies the nub. If deposits at the Bagalur branch do not pick up before the cash flow from the central bank slows down, “the branch might again find itself capping withdrawals”, the bank official warned. If that happens, the credibility of the branch – and of India’s banking system – will again take a beating.

Traders have many questions

When Prime Minister Narendra Modi announced the demonetisation of high-value bank notes on November 8, hardware store owner Jayaramaiah welcomed it. In the intervening days, his business has been modestly affected. On the first day, daily sales fell from Rs 20,000-Rs 25,000 to zero, he said. About two weeks later, his shop was doing about Rs 10,000 worth of business a day. Now, it has gone up to Rs 15,000-Rs 20,000.

There are other changes. Earlier, his suppliers would take half their payment in cheque and the rest in cash. Now, he said, it is 100% by cheque. He has downloaded the State Bank of Mysore’s phone-banking app but is yet to start using it. “I could not activate it and the bank manager asked me to come in January when things are less busy,” he said. “He said he will activate it then on my phone.” He has not tried PayTM. “I have no confidence in the private financial sector,” he explained. “They or their staff will sell my pin number and bank account number.” In contrast, he added, “There is confidence in a government bank. We can file a case if something goes wrong.”

Fifty days later, has Jayaramaiah’s view of notebandi changed? He continues to support it but is more critical than before. “Us traders have been affected but the worst hit are the workers in both construction and agriculture,” he said, adding that it would take another two to three months for the situation to return to normal. “Modi should have said 100 days, not 50 days.”

With business down 30%, the flower traders of Hosur make about Rs 1,000 a day. Photo credit: M Rajshekhar
With business down 30%, the flower traders of Hosur make about Rs 1,000 a day. Photo credit: M Rajshekhar

This pattern of sudden loss and gradual revival is seen among the flower sellers of Hosur too. The town in Tamil Nadu supplies flowers to all the major cities in South India such as Chennai, Bangalore and Hyderabad. In the immediate aftermath of demonetisation, sales fell by 80%, according to flower trader Manjunath. But they are back up again, with sales down by just 30%.

These are small businesses. The traders work out of a small yard covered by a corrugated sheet, in front of the bus stand, and earn about Rs 1,000 a day. Of that amount, the area’s strongmen take away as much as Rs 300 a day, they complained.

Much like the people of Banka, a town in Central Bihar, people in this part of South India are still trying to figure out if notebandi was a good idea or not. This shows in their myriad questions: Will the government crack down on gold and land? Have crime and corruption come down? Does the Rs 2,000 note make sense? How did some people end up with lakhs and crores in new notes while others had to stand in long queues? Based on all that, is the pain of demonetisation worth it?

Now to see what the prime minister has to say about that.

We welcome your comments at
Sponsored Content BY 

Ten awesome TV shows to get over your post-GoT blues

With those withdrawal symptoms kicking in, all you need is a good rebound show.

Hangovers tend to have a debilitating effect on various human faculties, but a timely cure can ease that hollow feeling generally felt in the pit of the stomach. The Game of Thrones Season 7 finale has left us with that similar empty feeling, worsened by an official statement on the 16-month-long wait to witness The Great War. That indeed is a long time away from our friends Dany, Jon, Queen C and even sweet, sweet Podrick. While nothing can quite replace the frosty thrill of Game of Thrones, here’s a list of awesome shows, several having won multiple Emmy awards, that are sure to vanquish those nasty withdrawal symptoms:

1. Billions

There is no better setting for high stakes white collar crime than the Big Apple. And featuring a suited-up Paul Giamatti going head-to-head with the rich and ruthless Damien Lewis in New York, what’s not to like? Only two seasons young, this ShowTime original series promises a wolf-of-wall-street style showcase of power, corruption and untold riches. Billions is a great high-octane drama option if you want to keep the momentum going post GoT.

Watch Billions Now

2. Westworld

What do you get when the makers of the Dark Knight Trilogy and the studio behind Game of Thrones collaborate to remake a Michael Crichton classic? Westworld brings together two worlds: an imagined future and the old American West, with cowboys, gun slingers - the works. This sci-fi series manages to hold on to a dark secret by wrapping it with the excitement and adventure of the wild west. Once the plot is unwrapped, the secret reveals itself as a genius interpretation of human nature and what it means to be human. Regardless of what headspace you’re in, this Emmy-nominated series will absorb you in its expansive and futuristic world. If you don’t find all of the above compelling enough, you may want to watch Westworld simply because George RR Martin himself recommends it! Westworld will return for season 2 in the spring of 2018.

Watch Westworld Now

3. Big Little Lies

It’s a distinct possibility that your first impressions of this show, whether you form those from the trailer or opening sequence, will make you think this is just another sun-kissed and glossy Californian drama. Until, the dark theme of BLL descends like an eerie mist, that is. With the serious acting chops of Reese Witherspoon and Nicole Kidman as leads, this murder mystery is one of a kind. Adapted from author Liane Moriarty’s book, this female-led show has received accolades for shattering the one-dimensional portrayal of women on TV. Despite the stellar star cast, this Emmy-nominated show wasn’t easy to make. You should watch Big Little Lies if only for Reese Witherspoon’s long struggle to get it off the ground.

Watch Big Little Lies Now

4. The Night of

The Night Of is one of the few crime dramas featuring South Asians without resorting to tired stereotypes. It’s the kind of show that will keep you in its grip with its mysterious plotline, have you rooting for its characters and leave you devastated and furious. While the narrative revolves around a murder and the mystery that surrounds it, its undertones raises questions on racial, class and courtroom politics. If you’re a fan of True Detective or Law & Order and are looking for something serious and thoughtful, look no further than this series of critical acclaim.

Watch The Night Of Now

5. American Horror Story

As the name suggests, AHS is a horror anthology for those who can stomach some gore and more. In its 6 seasons, the show has covered a wide range of horror settings like a murder house, freak shows, asylums etc. and the latest season is set to explore cults. Fans of Sarah Paulson and Jessica Lange are in for a treat, as are Lady Gaga’s fans. If you pride yourself on not being weak of the heart, give American Horror Story a try.

Watch American Horror Story Now

6. Empire

At its heart, Empire is a simple show about a family business. It just so happens that this family business is a bit different from the sort you are probably accustomed to, because this business entails running a record label, managing artistes and when push comes to shove, dealing with rivals in a permanent sort of manner. Empire treads some unique ground as a fairly violent show that also happens to be a musical. Lead actors Taraji P Henson and Terrence Howard certainly make it worth your while to visit this universe, but it’s the constantly evolving interpersonal relations and bevy of cameo appearances that’ll make you stay. If you’re a fan of hip hop, you’ll enjoy a peek into the world that makes it happen. Hey, even if you aren’t one, you might just grow fond of rap and hip hop.

Watch Empire Now

7. Modern Family

When everything else fails, it’s comforting to know that the family will always be there to lift your spirits and keep you chuckling. And by the family we mean the Dunphys, Pritchetts and Tuckers, obviously. Modern Family portrays the hues of familial bonds with an honesty that most family shows would gloss over. Eight seasons in, the show’s characters like Gloria and Phil Dunphy have taken on legendary proportions in their fans’ minds as they navigate their relationships with relentless bumbling humour. If you’re tired of irritating one-liners or shows that try too hard, a Modern Family marathon is in order. This multiple-Emmy-winning sitcom is worth revisiting, especially since the brand new season 9 premiers on 28th September 2017.

Watch Modern Family Now

8. The Deuce

Headlined by James Franco and Maggi Gyllenhaal, The Deuce is not just about the dazzle of the 1970s, with the hippest New York crowd dancing to disco in gloriously flamboyant outfits. What it IS about is the city’s nooks and crannies that contain its underbelly thriving on a drug epidemic. The series portrays the harsh reality of New York city in the 70s following the legalisation of the porn industry intertwined with the turbulence caused by mob violence. You’ll be hooked if you are a fan of The Wire and American Hustle, but keep in mind it’s grimmer and grittier. The Deuce offers a turbulent ride which will leave you wanting more.

Watch The Deuce Now

9. Dexter

In case you’re feeling vengeful, you can always get the spite out of your system vicariously by watching Dexter, our favourite serial killer. This vigilante killer doesn’t hide behind a mask or a costume, but sneaks around like a criminal, targeting the bad guys that have slipped through the justice system. From its premier in 2006 to its series finale in 2013, the Emmy-nominated Michael C Hall, as Dexter, has kept fans in awe of the scientific precision in which he conducts his kills. For those who haven’t seen the show, the opening credits give an accurate glimpse of how captivating the next 45 minutes will be. If it’s been a while since you watched in awe as the opening credits rolled, maybe you should revisit the world’s most loved psychopath for nostalgia’s sake.

Available starting October

10. Rome

If you’re still craving an epic drama with extensive settings and a grandiose plot and sub-plots, Rome, co-produced by HBO and BBC, is where your search stops. Rome is a historical drama that takes you through an overwhelming journey of Ancient Rome’s transition from a republic to an empire. And when it comes to tastes, this series provides the similar full-bodied flavour that you’ve grown to love about Game of Thrones. There’s a lot to take away for those who grew up quoting Julius Caesar, and for those looking for a realistic depiction of the legendary gladiators. If you’re a history buff, give this Emmy-winning show a try.

Watch Rome Now

For your next obsession, Hotstar Premium has you covered with its wide collection of the most watched shows in the world. Apart from the ones we’ve recommended, Indian viewers can now easily watch other universally loved shows such as Silicon Valley and Prison Break, and movies including all titles from the Marvel and Disney universe. So take control of your life again post the Game of Thrones gloom and sign up for the Hotstar Premium membership here.

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