This is the first in a three-part series of reports on the impact of demonetisation on farmers, workers, artisans, small entrepreneurs and traders in Uttar Pradesh’s Saharanpur district.
Saharanpur district located in western Uttar Pradesh is normally regarded as a relatively prosperous part of the country. After the recent demonetisation, however, people’s livelihoods have been disrupted, as revealed through 50 interviews and four group discussions in rural as well as urban areas of this district about a month after the move was announced.
Farmers in distress
Shakti Singh is a middle-level farmer from Patni Village in the Sarsawan block of Saharanpur. He felt comfortable with the money he received from selling his paddy crop, but his entire crop had not been sold when demonetisation was announced.
Due to the cash crunch, it became difficult to sell the remaining paddy crop. At the same time, the wheat crop had to be sown and he needed money for fertiliser, seeds and diesel, and despite standing in long queues outside banks for hours, he could only withdraw a small fraction of what he needed. “It is a very sad situation when you cannot use your own hard-earned money for your essential needs,” he said. As the rabi crop got delayed, his desperation increased. The repair work of his house also had to be stopped midway due to the cash crunch.
This desperation increased when his children became ill and there was no available cash for their treatment. This time his sister Savita took the initiative and volunteered to stand in the queue for as long as needed.
She spent nearly five hours in the queue but when it was her turn to withdraw money, the bank officials told her the cash was over. At this stage, Savita broke down and remembering her sick niece and nephew, she began weeping bitterly. It was only then that a bank official intervened to arrange some money so that the children could be taken for treatment.
Several other farmers also related stories about their inability to get their kharif harvest earnings in the form of accepted currency notes and hence their inability to plant the rabi crop properly and in time.
Vegetable growers now have to sell their produce at a cheaper rate as traders said they cannot give them valid currency right away. Since they sell perishable goods, they end up selling it for much lower rates than normal.
Farmers here also grow trees for use in plywood industry. Babulal Saini, a farmer of Chilkana Sultanpur in Saharanpur, said that due to the cash crunch, the rates have became so low that in desperation he sold poplar trees worth Rs 2 lakh for just Rs 25,000.
Workers denied work and wages
Satpal, along with over 50 other workers, used to go to Yamunanagar from Sultanpur Village in order to work in the factories there. In the month after demontesation, there has been absolutely no work for them. Having been denied their regular work, they have searched for some casual employment within their village, but many haven’t found any work.
Bahar Ahmed sat dejected outside a closed workshop in Saharanpur. He related that after demonetisation, his hosiery unit could continue working only for about a week or so. There was no cash to pay the workers or for the raw materials and hence all the workers lost their jobs. His neighbour Irfan has also closed his embroidery unit.
Irshad Ahmed used to employ ten workers in his garments unit but the number has now come down to four. He said that due to the cash crunch, he can continue at this reduced capacity only for three more days. Despite standing in queues outside banks for hours, he has been able to withdraw only a small part of what is needed in order to run the enterprise.
His remaining workers say that they accepted a delay in their wages to somehow save their job but now unemployment is staring them in their face.
Artisans face survival crisis
Saharanpur is famous for being a leading centre of wood carving industry. Soon after demonetisation, this industry was thrown into turmoil with several units closing their shutters and others on the verge of closure.
Khurshid Ahmed is a small entrepreneur in the woodcarving industry whose unit was doing reasonably well until just a few weeks ago. After demonetisation was announced, the decline was so rapid that now Ahmed is left with only about 10% of the work he had earlier. The linkages that are necessary to continue the work have broken down, and irrespective of official announcements, even after spending hours in queues, what small entrepreneurs like him have been able to withdraw falls short of what they need to keep their work going.
Another small entrepreneur of this industry, 60-year-old Mohammad Salim, said that in the decades that he has been doing this work, he has never seen such a crisis. His own work is down to just 5% of what it was before demonetisation and he is barely holding it together by selling some finished and semi-finished products he made earlier.
Mansur Ali is a young entrepreneur who has received a respectable export order but due to the cash crunch, he is finding it very difficult to meet his commitments in time. He said that there is a big gap between what the banks promise and what can be actually withdrawn. It is becoming extremely difficult to arrange even subsistence cash for artisan workers.
Mansur is worried about a further decline and a greater loss of work. “The very survival of this work which is considered the pride of Saharanpur is at stake,” he said.
Bharat Dogra is a freelance journalist who has extensively covered agriculture and the problems of rural India.