With little cash in hand, small traders and shopkeepers are unable to keep their businesses running

Surendar’s move from Bihar to Perambalur in the heart of Tamil Nadu in search of a livelihood has turned sour over the past few days. A school dropout, Surendar, who made a living selling pani-poori from a cart in this town, has seen his business plummet since the November 8 demonetisation announcement. “Everyone brings Rs. 500 notes for eating one plate of masala poori. I had no other option except to dump the food on my cart,” he says.

Pointing to unsold fish in his basket, 45-year-old Antony, a small-time fish vendor of Puthur in Thrissur district in Kerala, wonders what he will do with the remainder. “It’s going to be noon. My regular customers refused to buy fish even though I am ready to lend [it to] them. I am taking less than a quarter of the regular stock from the market now [to sell]. This has been happening for the past three days,” he said.

Mary, 40, who runs a grocery shop at Kundannur, a small village in the district, did not open her shop on Saturday. “I can’t deny goods to my regular customers who don’t have cash in hand now. But I am not able to buy stock as I don’t have money,” she said. She wonders how many days she will have to keep her shop closed. It is the only source of income for her family.

Rabi sowing hit

Demonetisation has not only brought the lives of millions of people to a grinding halt; in rural Rajasthan, it threatens to affect the ongoing sowing of rabi crops. As most of the cash-strapped farmers, labourers and small shopkeepers in villages do not have access to banks, they are simply unable to meet their daily needs of essential items, transport, raw material, seeds, fertilizers and pesticides. Agricultural labourers are the worst-hit.

“Though it is peak season for rabi sowing, I cannot operate a tube-well at my field. There is no work for labourers,” farmer Chiranjilal Maharia told The Hindu from Kudal village, 20 km from Sikar.

Higher up the economic chain, Mahendra Sharma from Katrathal village in Sikar district, who owns a hardware shop, said the demand in the market had shifted to food — edible oils, pulses and vegetables. “Villagers make purchases on a daily basis. When they have little cash, they will obviously first try to meet their basic needs,” he said.

In the desert areas of western Rajasthan, where hamlets and villages are spread out over huge distances, villagers are getting desperate. The business of wholesalers has come to a standstill, leaving the people worried when their lives will get back on track.

At the other end of the country in the Northeast, where access to modern banking has been severely curtailed by insurgency, it is a similar story. Ask Lalrongbawl Hmar of Mizoram, Melody Marak of Meghalaya, Laishram Ibemcha of Manipur and Joseph Angami of Nagaland — greengrocer, fruit seller, fish monger and candy kiosk owner, respectively, in rural areas.

Following recurring heists, bank branches in remote rural areas had stopped cash transactions from the early 1980s. After the demonetisation, most shops are shut; small traders, who had very little small denomination currencies, cannot sell anything. People have no money to keep their kitchens running or get medication for the ailing. Touts and their agents have fanned out to these areas to collect Rs. 500 notes on payment of Rs. 100 each to the people who have no choice but to trade their hard-earned money for small change.

On Friday afternoon, some ATMs were open in Meghalaya. But they soon ran out of cash and were not replenished. In Manipur, a few ATMs opened on Saturday afternoon. Cash was airlifted from Kolkata after Chief Secretary O. Nabakishore pursued the matter with RBI officials. He said, “We sought Rs. 200 crore of Rs. 2,000 denomination. But RBI sent us just Rs 100 crore.”

The disruption of rural markets, which operate on small margins and daily cash turnovers, has been disastrous. The scene in the Malancha market, about 100 km south of Kolkata, in the Sunderbans area, is illustrative. Malancha in North 24 Paraganas district is the largest wholesale fish market in south Bengal, auctioning about 15,000 kilograms of fish a day. There are at least a dozen other wholesale markets in south Bengal. But all are depressed since the demonetisation announcement.

By about 4 a.m. all shops — about 170 — were open on both sides of an ill-maintained road. The shops or depots selling fish at a wholesale rate were chock-a-block with customers by 5 a.m. but many of them were not trading. The market is 40-50 per cent “dry”.

First in memory

Azibor Rahman, the owner of one of the biggest wholesale shops in Malancha, the Sonali Fish Centre, has been in the trade for nearly 50 years but has never witnessed such depression.

“We assembled more as an early morning habit,” said Gorachand Mondal, a small fish farmer from nearby Chaita village. The situation is grim for small players like him. Mr Mondal had Rs. 20 with him and cannot afford to transport goods from the village pond to be paid in “defunct” bank notes.

“I earn about Rs. 400-500 daily and spend about Rs. 200 to run the household. We deal in 100 rupee notes — not 1,000 — which have disappeared,” Mr. Mondal said. In his village, the families are unable to support each other.

(With inputs from Jaipur, Kochi, Perumbalur, Imphal, Shillong, Agartala and Kolkata)

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