What was the agenda behind the cabinet approval for promulgating of an ordinance extinguishing the Reserve Bank of India’s liability for cancelled Rs 500 and Rs 1,000 notes? Was it a mere fulfilment of legal formality so as to prevent chances of someone claiming his right to encash disbanded notes on the basis of a promise to pay the bearer? If it was to fulfil only mere legal formalities, then the obvious question will be on what basis circulation of these very currency notes were made illegal with effect from 8 November midnight? Being a layman in legal matters, I leave it to the concerned experts to ponder over it.
What else could be the motive behind the move now? Out of Rs 15.4 lakh crore scrapped currency notes, already Rs 14 lakh crore, which is a whopping 90.9 percent, have already come back to the banking system. By any standard, the current step is a major success, one aimed at making unaccounted income accountable. This is a clear indication of the grip of the incumbent government. It also indicates how seriously people take decisions initiated by the prime minister.
Assuming that still around Rs 1 lakh crore do not get accounted, nobody would have shown guts to claim its value merely on the basis of promise to pay the bearer. That would have remained as mere pieces of paper. At the most, these scrapped notes would have got the honour of getting exhibited under palliate clubs. Anyway, the government’s treasury would have got enriched by an amount equivalent to unclaimed part of scrapped currency notes which may not be more than five percent of the scrapped notes.
What could be the hidden agenda? What would be implications of the ordinance? It definitely reflects determination of the prime minister to tackle menace of black money for which he was given mandate by the people. Among those who declared their income, there will be those who end up paying penalty for not filing returns on time. At the most, their social image may get tarnished. But they don’t have alternate escape route under the determined government.
Who are these persons who don’t mind their ill-gotten wealth getting drained away? Obviously, these are the persons who simply cannot afford to declare their income and pay penalty as other simpletons have done. In this case, resolving of one problem means getting trapped into a much more dangerous web. How can corrupt politicians and bureaucrats declare black money and get away by simply paying penalty? Instead of resolving the problem, it would lead them into a deeper trap. It would automatically lead to investigation about sources of their income. They would end up accepting bribe which means likely end of their career and jail term.
It also has to do with nature of the person called Narendra Modi. Once he takes initiative to reach the target, he is known for trying to achieve it at any cost and go forward with the killing spirit. Perhaps the prime minister is determined to clean up the entire political spectrum and government machinery without sparing anybody. In the process, he may have to sacrifice many of his own colleagues apart from taking on political opponents. No doubt, it is really a bold step. It looks like the prime minister is aware of tremendous risk involved. His real support and strength in this fight against black money is from common men. Despite facing hardship of standing in queues for hours together, they still stand by the Prime Minister. In fact, the measure initiated by the prime minister to tackle black money has become a true people’s movement today. Any movement blessed by people is bound to be a success despite numerous hurdles.
(Dr Jagadish Shettigar is a former member of Prime Minister’s Economic Advisory Council and currently, Economics Professor at Birla Institute of Management Technology, Greater Noida.)
First Published On : Dec 31, 2016 17:25 IST
Bhopal: Terming the demonetisation decision as “historic”, Madhya Pradesh Chief Minister Shivraj Singh Chouhan said Prime Minister Narendra Modi with his “courageous” call broke the myth that powerful people can’t be harmed in the country.
“India witnessed a historic decision on November 8, 2016. This day has given a meaningful reply to the queries raised by the people at large on the style of functioning of governments.”
“Often allegations are levelled against the governments that they can not take tough decisions under pressure. They fear to take decisions that could harm powerful people,” Chouhan said in his blog on the issue on Thursday evening.
“Our PM has broken the myth with his courageous decision to demonetise Rs 500 and Rs 1000 currency notes,” he said.
“The decision of demonetisation is historic in a way that it surprised everyone and this is the distinct feature of it. India has seen decision of demonetisation twice in the history of 100 years but those decisions gave ample time to the people having black money in the form of currency to change it.
“Thus the main objective of the decision was partially met. This time, however the decision did not give any time to people with black money,” the Chief Minister said.
Those criticising the decision say that it could have been taken with better planning and people should have been given ample time. It is beyond my comprehension as to whom these critics are referring to when they talk of giving time to people, he wrote in the blog.
“Who are those about whom critics say time should have been given to them. It is obvious that they are favouring those who had black money in the form of currency,” Chouhan said.
The decision of the Prime Minister to encourage cashless transaction is to transform the country from a developing nation to a developed one. All the aspects should be examined before criticising such a move, said Chouhan.
The Congress and other political parties say that demonetisation has wrought havoc on farmers and they could not sow on time.
In Madhya Pradesh, this year already sowing has been done on 105 lakh hectare so far as compared to a total of 108 lakh hectare last year. The sowing will further go up to 115 lakh hectare. It is clear that sowing has not been affected, he said.
“Those who opine that cashless transaction is not possible in this country, are challenging the wisdom and capacities of the 120 crore people of the nation without testing it. This is injustice to the people. The last two months have witnessed an impressive 77 percent increase through internet banking in the Central Bank of India in Madhya Pradesh alone,” said the chief minister.
Referring to VAT, he said “Another benefit of cashless transaction is also very clearly perceptible. In December the VAT revenue has increased 14 per cent whereas there was a fall in revenue from other taxes.
“This makes it amply clear that the tax evasion that took place in cash transaction has reduced in cashless transaction. This will improve tax collection and the state governments will be able to spend more on welfare schemes.”
“I have always believed that the people are wise enough to know what is in their interest. They are fully aware that the Prime Minister’s step of demonetisation is a masterstroke against those indulging in amassing black money, anti-national activities and circulating counterfeit currency in the market.
“The people very well understand that this is a step in the interest of the country and are extending wholehearted support to promoting cashless economy. This will definitely help India catch up with the most developed nations,” he added.
First Published On : Dec 30, 2016 15:17 IST
Expressing their support for the November 8 demonetisation of high-value currency that has resulted in a major cash crunch, a group of experts on Tuesday told Prime Minister Narendra Modi that the move help to strengthen the process of formalising the Indian economy, the major part of which is organised informally.
“Demonetisation was discussed as a move towards formal economy,” NITI Aayog Vice Chairman Arvind Panagariya said, briefing reporters following Modi’s interaction here with a set of noted economists at a session on “Economic Policy – The Road Ahead” organised by the think-tank.
“All the speakers stressed the need to bring workers and activity into the formal sector,” Panagariya said in reference to the stated aims of the 8 November demonetisation announcement for curbing corruption, black money, counterfeit currency and terror financing.
Complementing the demonetisation process, he said it is the government’s drive to promote digital transactions and a less cash economy so as to move from the informal to greater formalisation of the economic system.
“The speakers pointed out that 90 per cent of the labour force in the country is still in the informal sector,” Panagariya added.
Besides Niti Aayog and Finance Ministry officials, the session was attended by economists and experts, including Pravin Krishna, Sukhpal Singh, Vijay Paul Sharma, Neelkanth Mishra, Surjit Bhalla, Pulak Ghosh, Govinda Rao, Madhav Chavan, N.K. Singh, Vivek Dehejia, Pramath Sinha, Sumit Bose and T.N. Ninan.
The meeting with experts to take stock of the economy assumes significance against the backdrop of the cash crunch after the government last month scrapped the Rs 1000 and Rs 500 notes.
Economists and various state governments have voiced concerns that demonetisation will disrupt the economy and drag down the GDP growth rate for this fiscal by up to two percentage points.
First Published On : Dec 28, 2016 09:06 IST
On 8 November, when Prime Minister Narendra Modi announced the demonetisation of Rs 500 and Rs 1,000 notes, it was projected and seen as a big blow to unaccounted wealth and black money. In the following weeks as the images of long queues across the country started emerging; challenging the “good intention” of the government, another narrative was put in place to soothe the common man who was at the receiving end.
On 13 November, the prime minister while speaking at the foundation stone laying ceremony of the Mopa airport in Goa, made an emotional appeal to the citizens to bear the “pain” for “50 days” to help him deliver the “India of your dreams”.
An emotional Modi had said, “I promise you, I will give you the India of your dreams… If someone faces a problem, I also feel the pain. I understand their problem but this is only for 50 days.”
A narrative was build: The pain that people were facing was short-term which will yield wondrous long-term results. As weeks passed, demonetisation which was essentially seen as an attack on black money, was gradually projected as an attempt to make India a cashless economy.
On 15 December Modi came up with two schemes named Lucky Grahak Yojana and Digi Dhan Vyapar Yojana to incentivise cashless transactions. In a series of tweets, Modi said the schemes “will further incentivise digital payments” and it would be a big boost in the move towards “cashless and corruption-free India”.
The two schemes would cover small transactions between Rs 50 and Rs 3,000 to encourage every section of the society to move towards digital payments.
India is now being seen as moving towards a cashless economy. It raises an important question: Are people prepared to embrace this new way of life?
Consider these scenarios of people juggling with their new life in a ‘cashless economy’ that also highlight the sticking points in our digital edifice.
Case 1: In Uttar Pradesh’s Gorakhpur district, a man enters a store selling VIP bags. After selecting his product, he asks the shop owner whether he accepts debit or credit cards. The store owner reluctantly replies in affirmative and takes the card from the customer. He swipes the card and punches the amount. The bill is produced and it is a happy ending.
Welcome to ‘Digital India’.
But the story has an anticlimax. As the man leaves the store, he is stopped by the owner. The store owner reveals to the customer that instead of the actual payment of Rs 6,600, by mistake he punched only Rs 66. The customer looks upset and amused at the same time. He asks a simple question: What if by mistake one extra zero was pressed?
The store owner replies, “This is new to us. You cannot expect us to learn all this in a day. It has been thrust upon us without giving us the time to get use to it.”
Case 2: Atul, who runs a canteen in one of the offices in Noida, Uttar Pradesh, is struggling daily to get stable supply. He says, “Paytm and all are good, but there are many issues. Firstly, while I can accept the payment through Paytm, not everyone, from a vegetable seller to the milkman, knows about this. They just want cash.”
He adds, “I too am facing problem with Paytm. It allows me to transfer up to Rs 25,000 in a month whereas I am receiving much more in my account. As I cannot transfer the rest of the money in my bank account, I am also incurring loss of interest (Paytm website confirms this cap)
Case 3: A person books a private airlines flight using Paytm wallet and his ICICI debit card. The flight gets cancelled due to bad weather. The man calls up the airlines for the refund. He is told that as he has made the booking through a travel portal, he should contact the portal for the refund. Fair enough. The man calls up the portal and is told by the portal that as he has made the payment through Paytm, he should contact Paytm for the same. The man calls Paytm and is informed that the payment was made using ICICI debit card so he should call the bank. The bank, in turn, asks the customer to call Paytm. After much of argument, Paytm accepts that the amount will be refunded in 72 hours.
A happy ending may be? No, this story too has an anticlimax. Four days have passed and the man is waiting for his refund, frantically making calls to all the parties.
All the above mentioned cases point to one thing: The unpreparedness of the economy to go the cashless way. And in this regard, sudden push by the government towards cashless economy has left great number of people; living in small cities clueless, for whom digital transaction is still a “thing of tomorrow”.
The Indian Express reported on 20 December that Arundhati Bhattacharya, head of the State Bank of India (SBI) has stressed that government “should find ways to disincentivise cash transactions, such as imposing a charge or levy above a specified limit or threshold, after normalcy is restored in banking operations following the demonetisation move.”
The report stated, “According to Bhattacharya, if India wants to de-emphasise cash, there should not only be an incentive for people to move towards a cashless economy but also a disincentive for transacting excessively in cash, while leaving out small-ticket transactions”.
While strong measures like the one suggested by the SBI chief or the limit on free cash withdrawal from ATMs have indeed pushed people to go for digital transitions, the problem faced by them in the last one month is due to the sudden and large scale change in their transaction behaviour that demonetisation demands.
The underlying fact remains that underestimating digital ignorance among people was a big mistake of the government and the same is posing challenge to its well-intentioned decision of demonetisation .
First Published On : Dec 19, 2016 19:48 IST
New Delhi: In a bid to promote less cash economy, the government today said small traders and businesses with a turnover of up to Rs 2 crore will pay less tax if they accept payments through banking and digital means.
Under the existing Section 44AD of the Income-Tax Act, 1961, in case of certain assesses (an individual, HUF or a partnership firm other than LLP) carrying on any business having a turnover of Rs 2 crore or less, the profit is deemed to be 8 percent of the total turnover for taxation.
“…it has been decided to reduce the existing rate of deemed profit of 8 per cent under section 44AD of the Act to 6 percent in respect of the amount of total turnover or gross receipts received through banking channel/digital means for the financial year 2016-17,” the Central Board of Direct Taxes (CBDT) said in a communication.
The decision has been taken to achieve the government’s mission of moving towards a less cash economy and to incentivise small traders/businesses to proactively accept
payments by digital means, it said.
“However, the existing rate of deemed profit of 8 percent referred to in section 44AD of the Act, shall continue to apply in respect of total turnover or gross receipts received in cash,” the tax department added.
Legislative amendment in this regard would be carried out through the Finance Bill, 2017, the CBDT added.
Following decision to demonetise old Rs 500/1000 notes, the government has taken several measures to encourage digital payments to promote less cash economy.
First Published On : Dec 19, 2016 17:37 IST
New Delhi: There was no respite in sight for cash-strapped people on Monday as queues outside banks and ATMs for withdrawing money continued across the city with rising anger and pain.
An IANS correspondent who visited about 10 banks and ATMs across the city, found over 150 people outside Punjab National Bank and State Bank of India in Kalkaji area of south Delhi.
Similar conditions were witnessed outside the Indian Overseas Bank, ICICI Bank and Axis Bank in Preet Vihar area in east Delhi.
Jaswant Sharma, a security guard with a law firm and resident of Kalkaji extension, told IANS: “Since the day I got my salary I am looking for an ATM to withdraw some cash. Three of my attempts have gone in vein as the ATM machine runs out of cash before my turn comes.
Asked if he supports the government’s move of scrapping the old Rs 500 and 1,000 notes, Sharma said: “I have nothing to do with the government decision, I just want to withdraw some cash as I am left with only Rs 10 in my pocket. Cash is the necessity.”
“I have borrowed the bicycle from one of my friend to reach here,” he rued.
There were around 300 people outside the Yes Bank and HDFC ATM kiosk in Kalkaji area around 12.30 a.m. which was dispensing cash till early morning.
Balkishan, a lawyer who had arrived at the ATM to withdraw cash with his 12-year-old son, told IANS: “At most of the places people in the queues do not allow withdrawal from multiple cards. So I have come with my son to withdraw money from two cards.”
“We cannot stand in bank or ATM queue everyday, what comes in mere Rs 2,500,” he asked.
However, similar situation was witnessed outside the banks on Monday morning, which opened after Sunday. Hundreds of people were seen waiting for their turn.
Balwinder Singh, a resident of South Extension Part II who was standing outside Punjab National Bank in south Delhi, told IANS: “It is completely mismanaged show.”
“The government has made the middle and working class people suffer. Today I have skipped my office for the third time since demonetisation to withdraw cash.”
“Is government going to pay me for the days I have skipped my office to withdraw some cash?” he said.
Echoing similar opinion, Neha Sharma, an IT professional working with an MNC in Noida, said: “We cannot skip office everytime by giving the excuse that we need to withdraw some cash.”
“The government has set the limit of Rs 24,000 a week, but the bank officials are only giving Rs 4,000,” she rued.
“How do we manage our expenses for whole month in just Rs 4,000,” she asked.
Serpentine queues have been witnessed across the country after the government’s November 8 decision to spike higher currency notes to curb “black money and corruption”.
First Published On : Dec 19, 2016 12:32 IST
The Income Tax Department may not tax, penalise or even frown at much of the hoarded money that is coming out — the small change — the coins of Re 1, Rs 2, 5, and 10. They are being taken out of that corner drawer or the kid’s piggybank after replenishing it with a crisp Rs 2,000 bank note.
“Look, how nice it looks. Pink and not a crease or an ink spot. Now, there is more room for coins,” is usually the explanation given to the suspicious child. After a pause, comes the qualifier: “Later”. Heaven knows when that “later” would arrive.
It was both scarce and plentiful. Even at the counter of the supermarket, which does 12 hours of brisk business, you proffered a note, including the denominated notes of Rs 500 and Rs 1,000, and the cashier would say, “Change, sir?”
You insist and they would bring out the coins and give you the change. Like you and every other shopkeeper, they too hoarded, because of two reasons. The shopkeepers bought them at a commission, Rs 15 for every Rs 100 from moneychangers who include beggars. You did not carry them around because they weighed down your pocket.
Now they are back in respect.
The other day, my bank gave me Rs 1,000 in coins, as many as 100 of the shiny Rs 10 in a nicely sealed plastic bag. The wife grabbed it as anything other than Rs 2,000 bank note was welcome. Because, between Rs 100 and the Rs 2,000 currency notes, there isn’t any currency-stifling transactions.
There was a time you liked crisp bank notes, but seldom got any, be it from the bank where a cheque was encashed or across the counter from a shop or a superstore. You settled for whatever was provided, even the most battered notes.
There was also preference for higher denomination notes of Rs 100 and 500, and even Rs 1,000. Since Rs 10 fetched very little, it did not count for much and a Rs 50 note was just alright. So was the denomination of Rs 20. The idea was not to physically fatten the wallet.
Wallets have to be fat by virtue of its value, not grammage. When we spend for thinner, lighter mobile phones, never mind its length and breadth, but consider the thinness a desired quality, thick wallets are passé.
Who wanted the coins! It lasted a journey back home to rest in a small pile, and if you had a grandchild, into his or her piggybank. Even beggars frowned at the Re 1, Rs 2, and didn’t mind the Rs 5 coins, and the Rs 10 isn’t as much in circulation. Even the beggar suffers the weight of inflation and the ignominy of having to stretch a palm.
The coins were after all chillar. It has its demeaning nuance.
Post-denomination, most of us came close to stretching our palms after waiting in the queue without instigating a riot for the cash crunch. If the banks didn’t readily part with your money to you, how would a neighbour?
The days of the small loan are over. At least in the short term. It is for the Reserve Bank of India to determine what that ‘short term’ means. You have lost control of your money, so why not let the central bank decide on the timeline? Anyhow, you have the other time on mind – the time you would need to spend in a queue outside an ATM which disgorges only the Rs 2,000 note.
Disgorge is not mot juste here. It only reluctantly tosses out one.
The curious aspect of queues outside ATMs is where the machine is stocked with Rs 100 notes. The attempt is to draw Rs 1,900 and Rs 2,000. That big-daddy bank note is money you cannot use much. It is a limited attempt at gaming the system.
First Published On : Dec 13, 2016 14:28 IST
It is now fairly certain that the 1 April roll out of the grand indirect tax reform, Goods and Services Tax (GST), isn’t happening. The plan is comfortably put on the backburner at least till September, when the time given by the constitutional amendment will automatically expire for GST roll out, meaning that the new regime will have to kick in by then.
There are two clear reasons why GST isn’t happening now as planned. One, till now, there is no consensus on the contentious issue of dual taxation between the centre and state governments. States, especially the likes of Tamil Nadu and Kerala, are hell-bent on their demand that control of companies with annual turnover of less than Rs 1.5 crore should rest with them. A data goof up by the centre has worsened the relation (read here ). Centre isn’t too comfortable with the idea of giving up too much to states.
This was evident when the GST council met on Sunday. With no consensus in sight on the crucial issue, GST is unthinkable for 1 April since two important supportive legislations, central GST and integrated GST, is yet to pass the House test. The current session gets over on 16 December and there is no time to pacify the states and opposition by then. The next likely meeting of GST is planned for end-December.
The second reason is the change in political climate post demonetisation. Though states wouldn’t flag the political displeasure on demonetisation for slowing the GST bandwagon (as it would be seen as a regressive step), the hardening of resistance by states like Kerala on the revenue sharing issue is because of the adverse impact of the demonetisation. Demonetisation has triggered political and economic impacts in different states in different ways. This has also, states allege, gone against the centre’s promise of cooperative federalism . States like Kerala are in a sort of political crisis with the key sector of cooperative banks (a big employer and key institutions for low-income groups/ farmers) being hit hard. There are enough evidences around to believe that services, manufacturing too would have taken hit in the demonetisation resulted cash-crunch.
The hard-won political consensus on GST by finance minister, Arun Jaitley, is now on shaky grounds due to the ongoing tussle between the Narendra Modi-government and key opposition parties on the demonetisation issue. The opposition parties have been harping on prime minister’s persistent reluctance to speak on the issue in the House and use that a reason to take the House business to a standstill. The Modi-government too, so far, has not been able to justify the the demonetisation exercise with hard evidence. With no immediate monetary gains in sight, recovering black money—the originally highlighted objective of the operation—looking a tall order and ‘cashless economy’ turning the only savings grace, the Modi-government will have a tough time explaining the opposition, the negative economic impact and the prolonging pain to common man. This is an uncomfortable situation for the government.
But, in the post-demonetisation scenario, it is good both for the centre and the state to have a late GST, rather than facing another mammoth implementation challenge. In the post demonetisation days, the Indian economy is already having a tough time in manufacturing, services sector and even on discretionary consumer spending—all of these has taken a hit. Auto sales numbers and November PMI data offer enough evidence of the near-term growth impact. The Reserve Bank of India’s (RBI) fiscal year 2017 growth downward revision (from 7.6 percent to 7.1 percent) , which doesn’t even take into effect the demonetisation impact fully , adds to the worries.
The most optimistic expert assessments (except from the government) of the economy returning to normal cash conditions are March. In such a scenario, the immediate disruptions GST roll out by April will have a double whammy effect on the economy. September sounds more realistic. Also, the industry isn’t ready for an early GST roll out, especially in the aftermath of demonetisation shock. What does a delayed GST means to the investor? It is not a surprise, said D K Joshi, chief economist at Crisil rating agency, Indian subsidiary of Standard and Poor’s. “Anyway, we were of the view that April roll out lacks the necessary preparedness. Right now the focus should be on the roll out of demonetisation,” Joshi said. But yet again, how soon the government can contain the impact of the demonetisation cash crunch is critical, before the Modi-government can even think of readying to welcome the GST juggernaut. For now, it’s a goodbye to April GST and the delay is good news to all in demonetisation days.
First Published On : Dec 12, 2016 11:59 IST
A lot can happen in thirty days, and this stands true even for the impact of demonetisation of Rs 500 and Rs 1000 notes, which was announced by Prime Minister Narendra Modi on 8 November. Psychologists say, it take 21 days to form a new habit, has this move impacted people in such a way that their lives will change for ever?
Firstpost spoke to a few Mumbaikars experiencing the cash crunch. We asked them three questions.
— Since it’s been a month of experiencing cash crunch, what was the biggest impact of this move on their lives?
— How would this move change their life in the long term?
— Did Narendra Modi do the right thing with a move like this.
The responses we got from the people of Maximum city will surprise you, keep watching.
First Published On : Dec 8, 2016 21:02 IST
By Malini Nair
Around 08.30 every morning, hundreds of workers arrive at the main bus depot in Noida Phase II, about 30 km from New Delhi. They fan out into the lanes of the neighbouring Hosiery Complex. With nothing more than a tiffin box in their hands, they begin their daily job hunt.
Almost every factory gate has a board proclaiming “Avashyakta hai (wanted)”. It lists the daily requirement of jobbers–tailors, finishers, ‘pressmen’ (as those employed for ironing are called), packers and so on–needed by the 200 small, export-driven garment units in the complex. The boards have been blank since the factories were hit by the aftermath of ‘demonetisation’–as the invalidation of the Rs 500 and Rs 1,000 currency notes is being referred to.
These men and women are among the 92% of India’s workforce employed in the informal sector, which generates about half the country’s gross domestic product, according to the National Commission for Enterprises in the Unorganized Sector. Casual workers enjoy no job security or benefits of labour regulations, and about 79% of them live below the official poverty line.
With 7 million workers, the textile and apparel industry is the second-biggest employer in India–after agriculture–and about 80% of these workers are temporary. They are paid almost entirely in cash, currently in severe short supply, despite Reserve Bank of India governor Urjit Patel saying on December 7, 2016, that there was no shortage of currency nationwide.
Losing even a day’s work, at the minimum wage of Rs 350, is not an option for workers like Chanchala Devi, 35, a native of rural Nalanda in southern Bihar. Devi is a tailor, and has been trudging up and down 2 km for an hour and she has been turned away at every gate. The first shift has begun and gates have shut at 9.30 am. But she is reluctant to return home.
“I heard they are looking for workers in D block. I have four children at home and my husband who works as a checker hasn’t been paid in a month. I have to keep looking,” she said.
When the peak season turned slack
For the textile and apparel industry, November to January is peak season, a time when factories normally send out vehicles to pick seasoned workers like Devi off the street. In these three months, garment factories produce merchandise for the spring-summer lines of fashion houses in the West.
This year is different. Demonetisation has created a cash crunch that has sent the small-scale units, which form 78% of the readymade garments sector, into disarray. Nearly 80% of the workforce in this sector is employed as casual, off-rolls labour, and they are paid entirely in cash.
Workers like Devi are paid every fortnight–either as dehadi (daily wage), which is Rs 350 in Noida, or on piece-rate basis. Two cycles of fortnightly payment have gone past since November 8, 2016, and the units and workers managed to tide over the cash crunch–mostly by using old currency notes. But now, there is anxiety about where the factories are going to find the cash to pay these workers.
“I haven’t had a job since November 10, and I am missing my wage every day that I stand in a bank queue to exchange/deposit cash instead of looking for work,” said Nandan (he uses only one name), a 25-year-old tailor from Umrala in Bulandshahr, western Uttar Pradesh.
No jobs as units downsize
Nandan worked in one of the most stable units in the complex. Just last week, the factory shut down two assembly lines–each ‘line’ usually employs between 25 and 45 workers.
Owners of the small-scale units say they have no choice but to downsize because the seasonal and unpredictable nature of the business and its economies do not allow for permanent staffing and formalised modes of payment to labour.
A small to mid-scale entrepreneur, who did not wish to be named, said in an average November-December, he would have at least 1,500 workers at his factory; of them 75% temporary. He has, post demonetisation, cut the numbers down to 500.
“We are in wait-and-watch mode, but if the liquidity crunch remains, we will downsize even more. And others (in the field) are saying that too,” he said. On the shopfloor, there are lines where sewing machines sit unmanned, huge piles of cloth waiting to be stitched.
“Productivity has taken a huge hit and if a single link in the assembly line drops, the whole process collapses,” he added.
Word of the layoffs spread quickly around the complex. Knots of anxious workers stood exchanging tips about possible openings. “Factriyan band ho rahin hain. Suna hai kala dhan pakad rahein hain. Par amir log nahin honge to haemin naukri dene wala kaun hoga? (Factories are closing. We hear that the rich are being caught with black money. But if they are put away, who will give us jobs?),” asked Javid (he uses only one name), a tailor from Motihari in north Bihar.
He has managed to hang on to his job, but has lost daily wages for four days, queuing up at banks to exchange old notes.
The hunt for seasonal jobs
Like Nandan and Javid, most workers in this complex are migrants, unskilled or partially skilled. Almost all of them come from the impoverished districts of Uttar Pradesh and Bihar, mostly men who leave their families behind. They live in the rural islands that still dot an area being swallowed by high-rise housing estates.
Nayagaon, Bhangel, Haldawani, Nangla Charandas, Yakubpur–these are the urban villages flanking the complex where they cram in small rooms, three or four workers to a room. Since the work is seasonal, they have no reason to drop anchor in the city.
Labour activists have, for a long time, been criticising the high levels of informalisation or casualisation of the workforce in the garments industry.
But small-scale employers insisted that in a seasonal industry with fluctuating demand conditions, this works ideally. “These migrant workers look for seasonal employment and return to their villages in dull months. They are not interested in permanent employment and they prefer nakad (cash),” a factory owner said. “They don’t want salaries in banks, or the headache of ESI (employees’ state insurance) or PF (provident fund) cuts.”
He added that if employers add the cost of permanent staffing to their costs, they will have to raise their prices and thus lose the competitive edge in the world market. Jobbers say they prefer the flexibility the arrangement offers, the freedom to look for the best-paying employer in the market and the scope for overtime at any given point of time.
The next month will be critical for the industry and if the cash scarcity continues, workers like Devi and Javid may have no option but to return home.
(Nair is a consulting editor with IndiaSpend.)
(Indiaspend.com is a data-driven, public-interest journalism non-profit.)
First Published On : Dec 8, 2016 09:37 IST
New Delhi: Demonetisation is taking a toll on Indian diplomacy, with Russia lodging a strong protest over cash shortage affecting the functioning of its embassy in Delhi and threatening retaliatory action.
Pressing the External Affairs Ministry to intervene to get restrictions on cash withdrawals by Russian diplomats lifted, its Ambassador Alexander Kadakin has written to it saying embassy’s normal functioning was getting impacted with the “inadequate” amount limit of Rs 50,000 per week.
State Bank of India has informed the Embassy that the cash withdrawal limit available to the Embassy is now Rs 50,000 per week under the government of India directives with no exceptions unless otherwise advised by the RBI, his letter said.
“Such an amount is totally inadequate as regards the embassy’s salary and operational expenditure requirements,” the letter added.
“We are awaiting a reply from the MEA and hope that this is resolved quickly. Otherwise, we will be forced to explore other options which may include raising the issue in Moscow with your Embassy by summoning Indian Minister Counsellor,” a senior Russian embassy official said in Delhi.
Other retaliatory options may include restriction on the cash withdrawals for Indian diplomats posted in Russia, the official indicated.
Sources said MEA has “taken note” of the concerns raised by several diplomatic missions including Russia.
“The matter has once again been conveyed to Department of Economic Affairs and we are awaiting a direction from it,” a source said.
There are approximately 200 staffers in Russian diplomatic mission in the national capital.
Russia is not the first one to complain about the demonetisation-induced restrictions. Earlier, the Dean of Diplomatic Corps had also raised the issue with the External Affairs Ministry.
It is also understood that some other countries like Ukraine and Kazakhstan have also raised the issue with the ministry.
After the demonetisation last month, MEA had said it has approached Department of Economic Affairs over issues including those related to maintaining sufficient flow of funds to diplomatic missions following demonetisation and was awaiting a decision by the finance ministry regarding it.
First Published On : Dec 6, 2016 22:39 IST
By Praveen Chakravarty
The speech (in English) lasted 25 minutes. The Prime Minister uttered the phrase “black money” 18 times in this speech. He mentioned “fake currency” or “counterfeit” five times in the same speech.
It was unambiguously clear from the Prime Minister’s speech that the primary motivation for the sudden withdrawal of nearly 86% of the country’s currency was the evil of black money.
The next day, the papers termed it a “war on black money”. PayTM, a mobile payment app, hailed the decision with a full-page ad and the Prime Minister left for Japan.
By the time the Prime Minister returned from Japan, the move had been christened “demonetisation” in English, “notebandi” in Hindi and there was a war-time like rationing of currency in the country.
The Prime Minister made six speeches across the country on the demonetisation policy between November 13 and November 27, including his radio address to the nation, Mann Ki Baat, according to data available on the Prime Minister’s personal website. The text of all the speeches are available on the website.
A data analysis of the speeches (after translation) reveals a shifting of the narrative of the demonetisation action and its objectives.
In his speech on November 8, 2016, when he announced the demonetisation policy, the Prime Minister used the phrase “black money” four times more than “fake/counterfeit currency”.
By November 27, he used the phrase “digital/cashless” thrice as much as “black money” with no mention of “fake currency”. Recall, there was zero mention of “digital/cashless” in the initial November 8 speech.
The chart below shows the ratio of the three narratives–“black money”, “fake currency” and “cashless/digital pay”–in each of the Prime Minister’s speeches over three weeks and seven speeches.
In other words, in the same speech, how many times did the Prime Minister use each of these phrases to describe the reasons for demonetisation which can be used as a proxy to understand what the Prime Minister believes was the primary objective for this mammoth exercise.
The saffron line representing the “cashless/digital” phrase in the Prime Minister’s speeches went from 0 in the November 8 speech to a 73% ratio in the November 27 speech.
The green line representing the phrase “fake currency” went from 22% to 0 in the same period suggesting the Prime Minister no longer believes that terror financing was the primary or secondary driver of this demonetisation exercise.
The black line representing the phrase “black money” went from a high of a 80% ratio on November 8 to only 27% on November 27. Apparently, it is no longer a “war on black money” but instead a “war on all currency” to go cashless.
So, between November 8 and November 27, the objective for the demonetisation exercise has swung from black money elimination to going cashless, as evident in the Prime Minister’s speeches.
To be sure, urging citizens to use less cash and resort to digital transactions is a laudable objective and must certainly be encouraged. But when a decision was taken to remove a whopping 86% of the country’s currency overnight with all its attendant costs, one would have hoped there was one strong rationale for it, even if it meant achieving multiple objectives.
Either the Prime Minister has realised that the original primary objective of eliminating black money may not be met or there was not adequate thought behind the decision. Either way, it is worrisome.
(Chakravarty is Senior Fellow in Political Economy at IDFC Institute & Founding Trustee, IndiaSpend. Author thanks Puja Das of IndiaSpend for help with Hindi translation.)
(Indiaspend.com is a data-driven, public-interest journalism non-profit.)
First Published On : Dec 5, 2016 10:11 IST
Indian factory activity decelerated sharply last month after Prime Minister Narendra Modi‘s currency crackdown led to a rationing of cash and cooled domestic consumption, new orders and production.
The Nikkei/Markit Manufacturing Purchasing Managers’ Index fell to 52.3 in November from October’s 54.4, its biggest month-on-month decline since March 2013.
However, it held above the 50 mark that denotes growth for the eleventh straight month.
“PMI data for November showed that the sudden withdrawal of high-value banknotes in India caused problems for manufacturers, as cash shortages hampered growth of new work, buying activity and production,” said Pollyanna De Lima, economist at survey compiler IHS Markit.
The new orders sub index that measures both foreign and domestic demand was knocked down to 53.3 from 57.7 in October, the largest monthly fall in over 4-1/2 years.
Modi’s decision last month to scrap Rs 500 and Rs 1,000 banknotes as part of a crackdown on tax dodgers and counterfeiters removed 86 percent of the currency in circulation virtually overnight.
That left banks flush with cash but knocked consumption and investment and led to markets calling for aggressive rate cuts from the RBI to support demand.
Slowing demand in the world’s fastest growing major economy could undermine growth in coming quarters especially as factories have already started cutting output.
India’s $2 trillion economy picked up pace between July to September compared to the previous three months, growing 7.3 percent against expectations of 7.5 percent expansion in a Reuters poll, official data showed on Wednesday.
But cooling price pressures, as reflected in the latest PMI where both input and output price rises decelerated, may act as a temporary relief and provide room for the Reserve Bank of India to cut interest rates further.
“Of respite to firms, cost inflationary pressures softened, which in turn encouraged the vast majority of businesses to keep their selling prices unchanged. If this trend is sustained we will likely see further cuts to the benchmark rate,” De Lima said.
Indian consumer inflation eased for a third straight month in October to 4.2 percent, helped by smaller rises in food prices.
First Published On : Dec 1, 2016 11:44 IST
Greater Noida: Upset over the lack of money at banks even after 22 days of demonetisation, villagers at Bilaspur in Greater Noida on Wednesday blocked the Noida-Sikandrabad road, affecting traffic for more than an hour.
Reportedly the banks at Mandi Shyam Nagar in Dankaur displayed a ‘no cash’ notice and when the villagers reached there they were left agitated.
Locals said the villagers then closed the banks’ gates from outside and held protest even as some of them blocked traffic on the Noida-Sikandrabad road.
For one and half hour traffic was affected. Senior police officers reached site and pacified the villagers after which the blockade was lifted.
“For the last three days I have been visiting the bank to withdraw Rs 2,000 but am unable to get the money. Banks claim they are not getting cash. The ATMs too are without cash,” said one of the villagers, Dharam Bhati.
Another villager, Raje, alleged, “Bank officials give money to their known persons out of turn while the common man after standing in queue for hours was told there was no cash and was sent back.”
At Udyog Bandhu meeting held on Wednesday at DM camp office in Noida, some industrialists raised the problems emerging due to demonetisation before the district magistrate NP Singh.
“Small industries’ production was affected. Though the government has allowed withdrawal of Rs 50,000 from current accounts but bank officials are refusing such withdrawals, saying there was no cash at banks,” they claimed.
First Published On : Dec 1, 2016 07:51 IST
Demonetisation of high value currency notes has undoubtedly brought a lot of hardship for the common man.
And one of the examples of this hardship is how approximately 50,000 laboureres employed in Agra’s shoe manufacturing units are getting their weekly wages.
A report in The Indian Express stated that Agra Footwear Manufacturers and Exporters Chamber (AFMEC) said that there was no cash to pay the daily labourers, because of which the shoe factory owners had tied up with supermarkets such as Vishal Mega Marts and Big Bazaar so that they could give coupons to the workers for buying daily necessities.
The report also explained how commodities at supermarkets like Big Bazaar were substantially more expensive than goods from the local market.
Also, coupons for Rs 2,000 meant that if a person was spending that coupon, that person would necessarily have to buy goods worth Rs 2,000 because workers at the supermarket were unwilling to hand out change to them.
Labourers are not just suffering in Agra though. According to PTI, labourers and traders at Delhi’s fruits and vegetable mandis are bearing a heavy brunt of the demonetisation move, with sales in wholesale markets plunging and daily wage workers struggling to make a living.
At Azadpur Mandi, Asia’s largest wholesale market for fruits and vegetable, migrant workers can be seen sitting idle in a huddle, waiting for work or payment to arrive.
“We used to make a decent income earlier but now getting even Rs 200 or Rs 300 is getting difficult as no work is available.”
“Besides, traders are making payment either in Rs 500 or Rs 1,000 notes or asking us to wait till the end of the week to receive payment,” rues Hanuman, a labourer from Uttar Pradesh.
Pintoo, Birender and Namase from Azamgarh have a similar tale to tell, as they wait in vain at the mandi, that otherwise would be teeming with activities.
“You wouldn’t be able to stand here, it’s so much crowd on regular days, but now it’s all deserted. The demonetisation move has broken the back of the mandi,” Birender claimed.
With inputs from PTI
First Published On : Nov 30, 2016 15:10 IST
The demonetisation of Rs 500 and Rs 1,000 notes has led to a vast shortage of cash in the Indian economy. And the worst affected are the rural areas.
On Monday, Firstpost brought you the story of a digital village in Gujarat. Here’s a story from the completely opposite end of the spectrum.
A report by Pradesh18 said that the people of Kapa village in Mandla, Madhya Pradesh have yet to see the new notes. And that’s not all. It turns out that they only found out about demonetisation over the radio.
The people have alleged that when they went to a nearby bank to exchange notes, the bank officials put the corresponding amount in their bank accounts instead, according to the report.
The report also said that the people in the village found out about the demonetisation of high currency notes through the radio. There is also no bank, mobile network or hospital in the village.
To get access to a bank, the people of Kapa have to travel either 25 kilometres to Babliya or 45 kilometres to Narayanganj.
Another PTI report had said that Cooperative Bank Employees Federation had alleged that demonetisation had left the rural economy in Tamil Nadu at a standstill. CBEF General Secretary C Thamizharasu had said that agricultural cooperative societies, textile and fishermen associations with bank accounts in Central Cooperative Banks had been badly hit due to demonetisation
“Due to the Central bank’s move, the rural economy in Tamil Nadu has come to a standstill as even those who have bank accounts were not allowed to operate,” he had said.
Another Firstpost report had said that demonetisation could lead to the near-collapse of the rural economy in Maharashtra.
First Published On : Nov 29, 2016 09:57 IST
While the effects of demonetisation on urban India are immediately apparent to those with access to mainstream English media, its impact on rural lives is as yet unclear. We’ll attempt to understand why during the second leg of our trip into the country’s villages. This time we travel north with Bindisha Sarang to Gujarat’s Himmatnagar.
She has an iPhone, a couple of mics, a GoPro and no institutional monetary support — she has borrowed money from friends and withdrawn all the cash permitted under prevalent restrictions.
She will go live on Facebook when she is able to locate a reliable cell phone signal, and send in text updates on WhatsApp. Sarang has a very loose editorial guideline with which to work — she will hitch rides when necessary, interview as many people as are willing to talk, alter her route as circumstances dictate, and file updates when she deems it necessary.
Firstpost will broadcast her road trip on our Facebook page, and, after she returns, in the form of a series of documentary shorts.
Day 1, 9.00 am: Sarang talks to train commuters, some of them from Uttar Pradesh and Gujarat, about the impact of demonetisation on their lives.
Day 1, 6.00 am: We start from Mumbai Central. Join us on this journey.
First Published On : Nov 22, 2016 09:39 IST
Mumbai: Maharashtra Chief Minister Devendra Fadnavis has said those opposing Prime Minister Narendra Modi on demonetisation were harming the country and people should come together to “win this decisive battle against black money”.
“We are going towards a new economic independence. In this battle for economic independence, the person who stands with Modiji for the next 50 days will become a soldier in this battle, and the one who does not stand with the PM will be against this country,” Fadnavis said.
He was addressing a campaign rally for the municipal elections at Ratnagiri in coastal Konkan on Sunday.
“Now, you have to decide whether you want to become a soldier in the battle for economic freedom or whether you want to become a ‘desh virodhak‘ (those against the country),” he said.
“We all should stand with Modiji for the next 50 days and win this decisive battle against black money,” Fadnavis said.
The central government early this month invalidated higher denomination Rs 500 and Rs 1,000 notes in its massive exercise to curb corruption and eliminate black money.
Meanwhile, altogether 15,827 candidates are in the fray for the 3,706 seats spread over 164 municipal councils and nagar panchayats in Maharashtra, where the first phase of polling will be held on 27 November.
For the post of municipal council president in 147 places, a total of 1,013 candidates will contest, State Election Commissioner J S Saharia said, adding 147 municipal councils and 18 nagar panchayats were to vote in the first phase.
First Published On : Nov 21, 2016 12:17 IST
For politicians, tunnel vision is a deadly handicap. Politics is often the art of making most of the opportunities but exclusive focus on present can erode the possibilities of the future.
There is a reason why Narendra Modi fashioned his ludicrously risky demonetisation program as a moral fight against corruption. By turning a purely economic exercise into some sort of a political movement, he was hedging against popular backlash. Also, while exhorting citizens to join him in the “war against black money”, he was setting subtle moral traps for his detractors. And most of his rivals walked straight into it.
We are familiar with the notion that an idea is only as good as its implementation. Firstpost on Thursday wrote how the Prime Minister, in his zeal for initiating a radical change, seems to have underestimated India’s intrinsic logistical shortcomings.
If his idea was a game changer, the implementation — allowing enough room for an operation on this scale and secrecy — has been shocking. Regulations were mended and amended along the way with a clear communication gap emerging between government’s frequent changing of rules and the banks’ ability to cope up with those. It made for an ugly spectacle as millions of marginalised and the poor were made to suffer loss of livelihood as they stood in endless queues. Mandis turned empty, small businesses were majorly hit while ATMs stayed out of service, cooperative banks fell silent, banks and post offices neared implosion as public appeared fast approaching the end of their mental tethers.
The Prime Minister asked for 50 days of hardship but economists say resuscitating the economy to normalcy will likely take several months. It would seem that a leader who has unleashed this amount of mayhem through one fiat, should get ready to pack his bags and take sanyas from politics.
And yet, despite these hardships, bone-crunching inconveniences whose effect may stretch well beyond 50 days, Modi may emerge as an even stronger leader and put more distance between him and the chasing pack.
That is because this is no ordinary inconvenience.
In India, the term “black money” comes with an entire set of cultural and moral connotations beyond the dry definition of “untaxed funds”. It carries the baggage of a skewed social order where the rich and the well-connected, for decades, have sucked the poor dry. The licence-permit raj unleashed by the socialist politics of Congress created a whole bunch of entitled crony capitalists who ran an elaborate, rent-seeking parallel economy. It leeched away the blood of the poor, but also affected the middle class. Tired of coping up with a system that serves as an extortion racket every step of the way, the middle class trooped out of the country at first opportunity, robbing it of vital human capital.
If the poor as well as the salaried now stand solidly behind Modi, it is because they realise that the prime minister was batting for them, waging an audacious war against this decadal social injustice. Modi knew the power of that appeal.
His myopic rivals did not.
In their overwhelming focus on the immediate, most opposition parties have failed to understand the long game. Inconveniences that seem insurmountable now will slowly ease over time. Small business enterprises that have come to a screeching halt will eventually move again. ATMs will have their queues shortened and banks will, at some point in near future, see lesser footfalls. But in their haste to attack the Prime Minister and cash in on the finite discontent, his political rivals have willingly boxed themselves into the wrong side of a ‘good vs evil’ binary.
A time will come when the disorder will dissipate, but the opposition will find that in the “war against corruption”, they tried to create hurdles in Modi’s path. That would make for a gripping political narrative.
Normalcy is still some distance away and the lines are not shortening anytime soon but even at the height of discontent when cash was short and tempers were high, people never wavered from backing the drive. They were hit on the chin and bleeding but they wiped the blood and carried on, imposing full faith in the Prime Minister.
Polls conducted among 10,000 citizens from across 200 citizens of India since the demonitisation reveal public support for the Prime Minister’s drive remains high.
Strange as it may seem to many, a report by news agency ANI finds that support for the government’s demonetisation program has increased during the last week. According to the report, a portion of the citizens who were unsure and the ones who did not support the note ban are now coming out in support. The survey by LocalCircles found that in the week after Modi’s announcement, 78 per cent citizens backed the demonetisation.
That was upwardly revised to 79 per cent in a follow-up poll after a week on 15 November, indicating that even as hardships increased, more and more people kept backing the PM.
A report in Business Standard mentions that the survey was also done separately online in 13 states. More than 80 percent citizens in states like Uttar Pradesh, Rajasthan, Maharashtra, West Bengal, Tamil Nadu and Telangana offered unconditional support whereas over 25 per cent citizens in states like Uttarakhand, Goa and Odisha said that that they are supportive of the program despite pain and inconvenience.
A prescient politician is one who reads the game better than others. Post his Japan trip, Modi addressed three back-to-back rallies in different parts of the country and asked his cabinet colleagues and party workers not to worry about the political fallout of the move since “the people are with us”.
The problem for the opposition was to find a way past the binary and ensure that BJP doesn’t run away with the credit for launching war against corruption. Except Bihar Chief Minister Nitish Kumar and his Odisha counterpart Naveen Patnaik, the others badly failed in the job.
While Kumar and Patnaik carefully avoided the trap by welcoming the move and waited patiently for the government to trip up, the pack of Congress, Left, TMC, RJD, SP, BSP and AAP tore into Modi. In a high-pitched campaign filled with shrill rhetoric they alleged that the Prime Minister has leaked information selectively to his “friends”, insinuating that he is morally corrupted and called his currency ban program a “big scam”.
The Left taunted him as “Modi Antoinette”, Congress compared him to Muammar Gaddafi, Benito Mussolini, Adolf Hitler and Ghulam Nabi Azad, the leader of opposition in Rajya Sabha, compared the stress-related deaths due to demonetisation program to Pakistan-sponsored terrorist attacks on Uri.
Arvind Kejriwal and Mamata Banerjee have taken a more confrontational stance, demanding that Modi roll back the move “within three days or else face revolt and unrest.” Their joint rally in Azadpur mandi in Delhi drew little public support but their defiant positioning has left little room for manouvre. That room will get squeezed more and more with the passing of time and restoration of normalcy.
Modi didn’t get to choose his opponents. If he is already winning the political battle despite messy handling of a brilliant idea, he should send Rahul Gandhi, Arvind Kejriwal and Mamata Banerjee a hand-written ‘thank you’ note each.
First Published On : Nov 18, 2016 17:20 IST
Demonetisation: Bombay HC says efforts to curb black money should be supported
Mumbai: Refusing to pass any order on a PIL regarding demonetisation, the Bombay High Court on Thursday said the Union government’s efforts to act against black money need to be supported.
A division bench headed by Chief Justice Manjula Chellur made the remarks while hearing a PIL filed by Akhil Chitre seeking directions to the Centre and the state government to ease the inconvenience caused to the common people following the demonetisation of the old Rs 500 and Rs 1,000 notes.
“The government’s intention to act against parallel economy in black money cannot be said to be mala fide. Though there are problems faced by the citizens, it should be supported,” Justice Chellur said.
Refusing to pass any direction, the bench said the Supreme Court was already hearing petitions pertaining to the issue and hence it would not be correct for the high court to interfere.
First Published On : Nov 18, 2016 10:12 IST
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New Delhi: The chaotic situation and long queues outside banks and ATMs in Delhi and adjoining Noida and Gurugram continued on Thursday with people frantically attempting to withdraw cash for their basic needs after the government scrapped large currency notes last week.
On Thursday, many skipped their offices, for a second day in a row, as their previous attempts to withdraw cash proved futile despite standing in queues for hours.
Dozens of people IANS spoke to complained that banks and ATMs ran dry of cash by the time their turn came on Wednesday.
Asim Malik, a private professional, standing in queue at the Bank of Baroda in New Friends Colony, said: “I had taken a day’s leave yesterday (Tuesday) so I could withdraw cash from the bank. However, the bank ran out of cash. So I have taken one more leave today to try my luck again.”
A college student, Sunny Agarwal, said she had been missing her lectures from the last two days. “The unavailability of cash has made our lives very difficult. I skipped my lectures as I have to stand in queue for several hours to get some cash for daily expenses.”
Many of the banks in the region had not received indelible ink till Thursday morning to mark those who exchange spiked Rs 500 and 1,000 notes with new or lesser denominations.
First Published On : Nov 17, 2016 15:08 IST
With banks closed in many parts of the country, cash-strapped people started making a beeline, early in the morning, outside ATMs but with limited success as most of the cash vending machines are running dry.
Scuffle and heated exchanges were reported from ATMs and banks from many parts of the country.
Various sections of the society including small traders, restaurant owners, transporters etc started feeling the heat as the dependence on cash is very high.
Banks are unable to service as heavy rush making it difficult to handle the situation.
After government issued advisory banks have started making special arrangement for elderly and physically challenged.
In a bid to provide convenience to people, the Centre on Sunday eased key restrictions including raising daily withdrawal limit from bank accounts and ATMs as well as increased the amount of old and now defunct currency notes that can be exchanged.
To augment cash supplies, newly printed hard-to-fake Rs 500 notes were also released in market.
Prime Minister Narendra Modi on Tuesday night announced the surprise demonetisation of higher denomination notes.
After a review by the finance ministry, the limit of old and now defunct Rs 500 and 1,000 notes that can be exchanged for freshly minted Rs 2,000 and a new Rs 500 notes was increased from Rs 4,000 to Rs 4,500 yesterday.
Cash withdrawal limit at ATMs was hiked to Rs 2,500 from Rs 2,000 a day.
Over 12,000 Delhi Police, Rapid Action Force and paramilitary personnel were deployed on Sunday to maintain law and order as a large number of people queued up to withdraw money or get their notes exchanged at various banks and ATMs in the city.
Owing to a Sunday, there was more crowd outside banks and ATMs, and personnel of Delhi Police, RAF and paramilitary forces were ensuring that people stay in queues and maintain law and order, a Delhi Police official said.
“More than 12,000 personnel of Delhi Police were manning banks and ATMs across the city. They were ensuring that people stay in queues. We are committed to maintain law and order in the city,” Delhi Police spokesperson Rajan Bhagat said.
With inputs from agencies
First Published On : Nov 14, 2016 12:49 IST
The ongoing chaos because of the demonetisation drive has led to law and order problems in parts of the country.
Over a hundred people were booked for pelting stones and clashing with the employees of a bank in Sujru village in Uttar Pradesh over exchanging of old currency notes, police said on Sunday.
Three persons sustained injuries in the clash that broke out after cash-strapped people gathered outside the bank, to exchange the now defunct Rs 500 and Rs 1,000 notes after the Centre’s demonetisation move, turned violent, they said.
Police reached the spot and dispersed the angry mob. A case has been registered against more than a hundred people in this connection, a police official said.
Two elderly men standing in seemingly unending queues at banks suffered heart attack and died in a tragic fallout of demonetisation of high-value currency notes as hassled people continued to descend on ATMs and banks in droves leading to arguments and scuffles.
A 69-year-old man died in Madhya Pradesh’s Sagar town after suffering a heart attack while standing in a queue to exchange demonetised currency notes outside a bank, police said.
Another report of such death was received from Limdi town of Surendranagar district in Gujarat where a 69-year-old man died after heart attack. Mansukh Darji was standing in a queue outside a Bank of India branch in Limbdi when he suddenly collapsed.
Over 12,000 Delhi police, Rapid Action Force and paramilitary personnel were deployed on Sunday to maintain law and order as a large number of people queued up to withdraw money or get their notes exchanged at various banks and ATMs.
Owing to a Sunday, there was more crowd outside banks and ATMs, and personnel of Delhi police, RAF and paramilitary forces were ensuring that people stay in queues and maintain law and order, a Delhi police official said.
“More than 12,000 personnel of Delhi police were manning banks and ATMs across the city. They were ensuring that people stay in queues. We are committed to maintain law and order in the city,” Delhi police spokesperson Rajan Bhagat said.
Police control room received several calls from people complaining about they being jostled in the queue, ATMs running out of cash and overcrowding in the banks. Police also issued an advisory on its Twitter handle, asking people not to believe on rumours, related to withdrawal of money and demonetised notes, spreading thick and fast.
It kept an eye on social media to identify the rumour mills.
With inputs from PTI
First Published On : Nov 14, 2016 10:07 IST