The Costs of Demonetisation: Kites Lose Flight, Assam in Jeopardy

A daily round-up of the human impact of demonetisation.

The 700 km long human chain demonstration in Kerala against demonetisation. Credit: Twitter

The 700 km long human chain demonstration in Kerala against demonetisation. Credit: Twitter

Auto drivers face problems

Auto-rickshaw drivers in Bengaluru have been hurt by demonetisation. Though they had already been pushed by app-based cabs, the recent rate fixing by Ola below the government minimum meant that the non-app drivers were worse off. According to The New Indian Express, M. Manjunath, president of Adarsha Auto and Taxi Drivers Union said, “There is a 40% decline in ridership because of demonetisation. Passengers are hesitant to hire normal auto-rickshaws because of the cash crunch. “We are facing problems because of a shortage of notes of lower denomination, but now many drivers are switching to digital wallets”. However, the response to digital wallets has not been encouraging. “A majority of my customers are common people who are not very tech-savvy to use digital wallets or mobile applications. Those who are familiar with apps and digital wallets are either booking cabs or Ola auto,” said M. Prasanna, another auto driver.

Kites lose flight

The famed kite industry of Gujarat is facing tough times. Demonetisation has affected the kite market, as demand falls and kite-makers are being forced to sell at low rates. Despite the low rates, there has been no end to the misery of these people. Around 25 artisans have abandoned these businesses as a result of demonetisation. In a report by The Indian Express, Haji Abdul Maneer, who has been in the kite business for 30 years, spoke of the situation. “Ever since the government scrapped notes, our business has been adversely affected. The kites which used to sell at Rs. 2400 and Rs. 2500 are now being sold at Rs. 1900. But the customers are not willing to pay even then,” he told ANI.

Assam in jeopardy

Even as the December 30 deadline set by Prime Minister Modi comes to an end, tea workers in Assam have still not breathed sigh of relief. NDTV reported on how workers in the Dherai tea estate near Guwahati have been coping with the times. “When we read about the notes ban, we were terrified and even the management was worried. In the first week of demonetisation we even did not get paid, money came in the next week. A meeting was called in the garden and it was decided that payment will smoothen. We had actually stopped working. We resumed working only after we were assured,” says Moyna Tanti, a tea garden worker for 15 years at Dherai. “Only half of our workers have got debit card and the rest are yet to receive. We are not happy – the new system is a botheration for us. Here we cannot even remember the four digits ATM pin, how do you expect us to do cashless banking trough smart phones? How many are educated in the gardens to handle this? Only few are educated,” Tanti added.

In another report, NDTV laid out the problems of the river islands of Assam. Isolated from mainland Assam, these islands have not received the new notes even after 50 days of demonetisation. Farmers like Amjad Ali on the island of Lakhipur Char have always dealt in cash. “We gave away our old notes but did not get new ones in return. Whatever we produce is perishable and we either have to dump it or sell it at a loss. The note ban has been a harassment for us,” he said.

Kerala’s economy struggles 

According to Firstpost, around 56% of Kerala’s economy has been hindered by demonetisation, affecting future resources mobilisation as well. Both the big and small sectors of the economy have been struggling since the announcement. A five-member government panel was setup to assess the impact of the announcement that Prime Minister Modi made on November 8. “Cash-intensive sectors such as retail trade, hotels and restaurants and transportation account for over 40% of the Kerala economy and the primary sector accounts for another 16% of the economy. Thus, 56% of the economic activity of Kerala is immediately affected by the withdrawal of specified bank notes,” an interim report submitted by the five-member committee has said. The committee added that the cash deficit has also affected the unique banking sector of the state and the cooperative agriculture societies.

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