In Assam’s Kabaitary, Demonetisation Has Wrecked an Already Declining Coal Market

The coal business in the region, which saw hope after the Supreme Court recently allowed transportation of coal from the mines of Meghalaya, is facing fresh hardship post demonetisation.

In 2014, NGT had dealt a blow to the coal market in the region by clamping a ban on the coal extraction in Meghalaya. Credit: Environmental Change and Security Program/Flickr (CC BY-NC-ND 2.0)

In 2014, NGT had dealt a blow to the coal market in the region by clamping a ban on the coal extraction in Meghalaya. Credit: Environmental Change and Security Program/Flickr (CC BY-NC-ND 2.0)

Kabaitary (Bongaigaon, Assam): The open sky over the enormous expansive Brahmaputra made for an exhilarating sight from the Naranarayan Setu – the third bridge over the river inaugurated by the former prime minister Atal Bihari Vajpayee in 1998.

The sudden transformation of the panorama – soon after leaving the 2.8 km long bridge – was rather sharp. The road led to a soot-soaked small settlement called Kabaitary. After the bridge was constructed, Kabaitary became the region’s biggest market for coal, mined in the South Garo Hills of Meghalaya, which is located about 150 kms away.

A part of Jogighopa town, Kabaitary is strategically located. It marks the beginning of the state’s Bongaigaon district which goes on to touch the Assam-Bengal border, a gateway to the rest of the country, which is why the coal trade moved to Kabaitary from the neighbouring Goalpara district after the bridge was built.

View of the Brahmaputra from Naranarayan Setu. Credit: Sangeeta Barooah Pisharoty

View of the Brahmaputra from Naranarayan Setu. Credit: Sangeeta Barooah Pisharoty

The highway passing through Kabaitary was then typically lined with hundreds of trucks. Interestingly, some were empty while some others were laden with coal. Groups of labourers could be seen shovelling coal from the trucks that were standing at a few depots while some others were sitting by the roadside, chatting and soaking in the mid-morning sun.

Manoj Das, the cab driver who said he was associated with the trade until 2014, said, “There is nothing left in Kabaitary now. This is not even half of the action it saw two-three years ago.”

The demonetisation drive, Das claimed, “will put the final lock on Kabaitary.”

A graduate of Goalpara College, Das looked for a government job for about a year before becoming a truck driver in 2009 carting coal from the South Garo Hills to Kabaitary. Four days a week, for eight months in a year (business slows down for four months in Kabaitary due to heavy rains in the Garo Hills), he traversed through the hilly track, several times coming face to face with armed extortionists in Meghalaya.

“I will take you to my former employer to know what is going on the ground post demonetisation in Kabaitary. He will also tell you why people like me are no more associated with the trade,” he offered.

Das’s former employer, Ashok Jain, is the owner of a fleet of trucks, a coal depot and a fuel station in Kabaitary. He set up shop in 1998 after the coal trade moved from Goalpara, about 25 kms away.

Jain threw his hands up despair when asked about the effects of demonetisation on his coal business. “We were already down, whatever was left has finished after November 8,” he said.”

The inability to give change to customers at his fuel station “has been increasingly leading to unpleasant scenes” and the lack of adequate cash in small denomination notes “has almost brought the coal business to a grinding halt.”

Labourers shovelling coal at a depot in Kabaitary. Credit: Sangeeta Barooah Pisharoty

Labourers shovelling coal at a depot in Kabaitary. Credit: Sangeeta Barooah Pisharoty

Transportation of coal from the South Garo Hills to Kabaitary resumed on October 1 after a gap of eight months as per a Supreme Court order. In April 2014, the National Green Tribunal (NGT) clamped a ban on rat-hole mining in Meghalaya in response to a petition by two Assam-based organisations of the Dimasa community.

The petitioners alleged that the drinking water in the Kupli river had been severely polluted by the drainage of acid from the coal mines of Meghalaya’s Jaintia Hills. Overnight, the ban stopped all mining activities, not only in the state’s East Jaintia Hills but also in the West Khasi Hills and the South Garo Hills.

In response to an appeal by the Hima Nongstoin Land Owners’ Association – which sought permission to sell the coal stocks already lying with them – the Supreme Court allowed its transportation from October 1 to May 31, 2017, but only within the Northeast.

“Earlier too, the NGT allowed transportation of the coal stock for two-three months. This time, the ban on transportation has been lifted after a gap of eight months. There are 33 lakh tonnes of coal to be transported, so the time given till May is not enough.”

“Still, the news came as a breather to Kabaitary. Many labourers and others associated with the trade here, who were facing a lot of hardship after the ban, at once came back to work. But the sudden demonetisation move has come as a big hindrance,” said Jain.

There are 250 depots in Kabaitary with each employing at least 15 permanent labourers and other daily wagers besides office staff.

As many as 500 trucks operate on the route from Kabaitary to the South Garo Hills. “Each truck has at least two drivers and a helper. The owners need cash to pay their weekly salaries, and also at least Rs 30,000 in cash per truck to be able to go to the mines. The cash is required for paying taxes in toll booths set up in Meghalaya, some illegally put up by extortionists. But the banks have not been able to provide us that much cash, forcing most truck owners to park their vehicles on the highway. That is why you can see so many empty trucks here,” Jain explained.

“Those standing with coal have arrived from the Garo Hills but since there’s no cash, depot owners have not been able to employ labourers to unload the coal.”

Every day, there is a cash transaction of at least Rs 2 crore at Kabaitary. “The buyers, who used to pay us mostly in cash, have begun paying us in cheques since November 8, but we have not been able to encash those cheques to run the daily business as the banks in Kabaitary are either mostly running dry or not giving us the amount we want because of the RBI’s cap on daily withdrawal,” he said.

Kabaitary has three banks – a branch each of the Indusind Bank, State Bank of India and United Bank of India. “We have four ATMs here but they also are dry. One had money for a few days but was spitting out only 2,000 rupee notes but we need small denomination notes.”

Jain was soon joined by Nagen Ray, the president of Jogighopa Anchalik Coal Brokers Association which has 700 local brokers as members.

Over tea, Ray further delineated the sequence of events that had led to the gradual fall of Kabaitary from the country’s coal map and the role demonetisation has played to further break the back of the coal business.

“Till four-five years ago, we did at least Rs 5 crore transaction daily in Kabaitary. Buyers from Haryana, Punjab, Bengal and even Gujarat came here. Around one lakh people in Assam and the Garo Hills were dependent on it. However, since the last two-three years, business began to slow down. In good times, about 300 trucks would leave for the mines from Kabaitary every day. It has now come down to 150 per day.”

Ray further said, “The first reason [for the slowdown] is that Indian traders are fast procuring imported coal from countries like Indonesia as it is cheaper than the coal we sell here. We can’t give a competitive price only because of the rampant extortion of money from the coal truckers through illegal toll gates in Meghalaya. The police in Meghalaya don’t do much to stop it. So the money a trucker spends on these expenses gets added to the final price of coal at Kabaitary, which has begun to gradually push us out of the market.”

“Post demonetisation, the government is telling us to do all transactions in cheques but how do we show the large amount of bribes that we have to pay to procure coal in white money now?”

“The second reason,” he continued, “was the NGT ban in 2014.  Overnight, it led to the loss of thousands of jobs in Kabaitary even though the environmental concern was only about the mines in the Jaintia Hills. The ban led to large scale migration of people on the Assam side in search of jobs to other parts of the country.”

The coal yard alone, which closed down after the NGT ban, employed over 2700 local labourers and other workers.

Coal filled trucks at a depot in Kabaitary. Credit: Sangeeta Barooah Pisharoty

Coal-filled trucks at a depot in Kabaitary. Credit: Sangeeta Barooah Pisharoty

The cab driver, Das, was one such young man. “I am a graduate and also have a plot of family land in Goalpara town. So I could get a bank loan to buy a taxi, but some of the people I know from the Jogighopa area and also from Goalpara have left for Guwahati looking for jobs. Some went to Goa and Andhra Pradesh to work as guards at apartments and malls; some others are somehow managing by farming other people’s land here,” Das told this correspondent.

As per Ray’s estimate, “About 5,000 to 6,000 people are still associated with the coal trade in Kabaitary. They will lose their jobs by May 2017, if the Meghalaya government can’t conform to the central guidelines on mining.”

“I can’t sleep at night thinking what would I do now for a living. The appeal by the Meghalaya state coordination committee of coal owners, miners and dealers’ forum to the NGT to lift the ban is going on (the next hearing is slated for January 31, 2017), so I don’t want to say much. But I would still like to add that the worst sufferers from this ban are the labourers and other small time workers. They have no savings, most of them have no land. The government doesn’t have an alternate plan for them. So where will they suddenly go?” Ray asked.

Akbar Ali was one such labourer. “I worked in people’s houses in Goalpara town on daily basis for the last eight-nine months. When I got to know that there is work in Kabaitary again, I returned. But after November 8, I have been able to get my daily wage only for ten days now. So my money is stuck.”

“Now I have heard that this job will go in May. I don’t know what will I do then.”

Ali and some other labourers have already pulled out their children from local schools. “We are back to basic needs now, education can wait,” shot back labourer Moinul Haq when asked about it.

Most labourers associated with the coal trade in Kabaitary are Bengali speaking Muslims belonging to Bongaigaon and Goalpara districts, locally called Bhatia.

The NGT has asked the mine owners to pay a royalty to the government. On December 14, it asked the Meghalaya government to furnish a comprehensive plan for mining within two weeks.

Earlier, the state government submitted draft mining rules to the NGT and other related central ministries. However, the NGT has now sought a much more comprehensive plan from the state.

According to local news report, the state has not responded to it hoping the Centre would exempt it from the central coal mining laws. State chief secretary K. S. Kropha reportedly met the principal secretary at the Prime Minister’s Office in New Delhi in the first week of December to urge the Centre to grant the exemption.

The president, with the approval of the Centre, can issue a notification under Para 12 (A) of the Sixth Schedule of the constitution to exempt the autonomous areas of Meghalaya from the central mining laws.

If the plea is refused, the state will have to conform to the clauses in the Coal Mines Nationalisation Act, 1973 and the Mines and Minerals Development Regulation Act, 1957.

According to section 3 of the Coal Mines Nationalisation Act, the right, title and interest of the owners in relation to the coal mines will then be with the central government, which the state and the coal miners don’t favour.

Meanwhile, in Goalpara town, Abdul Ali had just arrived with a truck loaded with coal from the Jadi area of the South Garo Hills.

“Over a hundred trucks have been waiting on the Assam-Meghalaya border for days together. They have no cash to pay the taxes at the border. In the Garo Hills, the entire trade is still being done in old notes. So they had the option of using the old notes, but that is not the case on the Assam side. So they are stuck,” Abdul related to The Wire.

He wondered whether those using old money will be able to deposit it in the banks before the deadline expires, as without the availability of adequate new currency, it will be difficult for them to do so. “They are using old money because in the Garo Hills, nothing moves on credit. And there are no ATMs and hardly a bank around.”

Ray added, “Many coal mine labourers are still being paid in Meghalaya in old money. They neither have any bank accounts nor are they aware that they will lose their hard earned money if they don’t deposit it in the banks soon. So a crisis is certainly looming there.”

In order to make the trip post demonetisation, Abdul formulated a plan. “The banks in Kabaitary are nearly dry. So I asked some of my labourers and friends to stand in queue for me in Goalpara town to take out money from my account there. That helped me to collect Rs 1,50,000 to be able to go once this week to the mines to buy coal and also to be able to pay all the taxes on the way. Without the hassle of cash, I would have gone to the mines three times this week,” he said.

Ray recalled “a crisis” Kabaitary had faced in 1999. “A group of surrendered militants from the United Liberation Front of Asom (SULFA) tried to grab the trade. We were worried about losing our livelihood. I led the movement against it. Local people joined me to push back the SULFA men who were heavily armed. But we all succeeded in protecting our jobs.”

He then added, “It now looks like what the militants couldn’t do would be done, first by the demonetisation move, and then by the NGT’s blanket ban which rightly talks about saving the environment but doesn’t push the government to look into the need for livelihood of those who have been dependent on the industry.”