World Bulletin / News Desk
Black Money, the funds flowing around India's black market known as a driver for corruption and crime, was supposed to be the target of India's demonetization program - the scrapping of its two most valuable notes.
In practice various sections of Indian society, from farmers to laborers and their employers, say they have been left stranded by the sudden change, which has rendered existing 500 and 1,000 rupee ($14.65) notes useless.
The government is replacing the 500 rupees note with a new version, while the 1,000 rupee note has disappeared in favor of a larger 2,000 rupee replacement which it says will be more difficult to forge.
While banks have been responsible for exchanging currency, their long queues, stock shortages and lack of access to those without identity cards have proved a problem for many Indians.
Some of the worst-hit have been India's 260 million farmers, who rely on cash for most of their business needs.
Iqbal Singh, a farmer from Sehore in the central Madhya Pradesh state, told Anadolu Agency he has been left without money to buy seeds, fertilizers and pesticides.
“This decision has come at a time when we need cash most. We usually keep cash in high denominations at our home for daily use and for farming purposes. But those high denomination notes are no longer accepted anywhere. We can't buy seeds or other essentials," he said. "Many farmers are not able to water the crops. The buying and selling of agro-products has also been hit as there is no cash in the market.”
The problem has been exacerbated by a government-set 4,500 rupee limit – now reduced further to 2,000 rupees – on how many old notes can be exchanged by a single person.
“I don’t have money for our daily use. Forget about money for farming. It is really impossible for us to stand in queues to exchange our money for only 4,500 rupees," he said.
The government has also requested the fingers of customers be marked with indelible ink to prevent people from exchanging money multiple times, while also requiring those with higher sums of scrapped notes to deposit them into an account rather than exchange them.
Those depositing more than 250,000 rupees would however have to disclose their source of funds, potentially leading to questioning from the Income Tax Department – a problem for the more than 400 million Indians working in the informal economy.
The government has provided some relief to farmers recently by allowing them to withdraw 25,000 rupees a week, though many still feel standing in queues at the bank is not possible for them during the busy planting season.
“We have very little time to sow crops like wheat and mustard and no one is ready to even give us these things on credit,” complained Shyam Lal, a farmer from the village of Phanda, in Madhya Pradesh.
India's central bank has banned regional cooperative banks from exchanging the notes, despite often being the only banking services available to farmers and agricultural laborers in rural areas.
While India's Finance Minister Arun Jaitley has insisted the currency scrapping process will have long-term benefits, others are unsure and the opposition Congress party called it a “draconian decision” and demanded Prime Minister Narendra Modi apologize to Indians who have suffered as a result.
Businesses have also struggled to adapt to the policy, having been left without enough money to pay their workers and a shortage in customers who are wary of parting with the limited amounts of cash available to them.
Ashwinder Mongia, who heads one of the petrol pump associations in Punjab, told Anadolu Agency sales at petrol pumps have gone down in recent days.
"The cash is not available for people, so the number of customers visiting the petrol pumps has reduced," he said, adding that many people have turned to online shopping for day-to-day items, leaving those who sell the same goods in markets struggling for trade.
Wage laborers have suffered in particular according to Sanjay Kumar, a contractor based in Punjab's capital Chandigarh, who said he has paid his workers in advance.
“Most of them don’t have ATM cards and they have to skip work to get the money exchanged at the banks,” he said. “In some cases, they don’t have the proof of identity which is mandatory for the money exchange at the banks. This also causes a lot of inconvenience to them.”
"Many of my friends have not been able to give money to their workers, because they doesn't have sufficient cash," he added.