People respond to RBI’s report on demonetisation: ‘What did we achieve?’ | india-news | Hindustan Times
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People respond to RBI’s report on demonetisation: ‘What did we achieve?’

Reserve Bank of India revealed that all but 1% of demonetised banknotes was returned to the banking system, putting a question on the efficacy of the move.

india Updated: Sep 01, 2017 23:01 IST
Ramesh Babu and Punya Priya Mitra
People deposit discontinued notes in a bank on the last day for depositing Rs 500 and Rs 1,000 notes  in Guwahati,  Dec. 30, 2016.
People deposit discontinued notes in a bank on the last day for depositing Rs 500 and Rs 1,000 notes in Guwahati, Dec. 30, 2016. (AP File Photo)

The thought of demonetisation sends shivers down N K Gopi’s spine. The 53-year old papad-maker of temple town Guruvayoor in Thiruvananthapuram recalls how he was forced to shut the shop and discontinue the service of his workers for many days after the government’s shock recall of Rs 1000 and Rs 500 notes. Eight months on, doubts about benefits of demonetisation still linger

“It seems it was a thoughtless decision. What did we achieve? All say in the long term it is good for the country. If present is not perfect how can you think about future? I hope the government will not try an experiment like this in future,” he says, adding he’s yet to come out of the aftershocks of the cash crunch.

Demonetisation was billed as a one-shot fight against black money and tax freeloaders. But the move hobbled the economy and gobbled up thousands of jobs, especially in the rural and informal sectors, where businesses struggled to stay afloat without cash.

This week, the Reserve Bank of India revealed that all but 1% of demonetised banknotes was returned to the banking system, putting a question on the efficacy of the move that was widely blamed for angry farm protests in June that claimed several lives. A day later, the economy slowed down to its lowest growth rate in three years.

Last year, Hindustan Times tracked people from various walks of life across the country to investigate how they were coping with a life bereft of cash. This week, as criticism of demonetisation mounted, HT went back to the same people to ask if their lives were back to normal, and whether the pain was worth it.

Sunil Ghatiya was one of hundreds of farmers agitating for better crop prices and a loan waiver in Madhya Pradesh this June. A soyabean trader, Ghatiya blamed demonetisation notes for “finishing off the market” as the government insisted on cheque payments. Two and half months later, Ghatiya feels the situation has improved, but slightly. “The problem of liquidity still remains, and the farmers still want cash for their produce,” he says.

Ghatiya questions the merit of demonetisation when it is seen to have widened a rift between farmers and traders, and was held responsible for the Mandsaur protests. “Our only solace is the government’s claim that it will help the economy in the long run,” he said.

Vegetable farmers such as Nek Singh in Punjab’s Patiala said that adverse effect still lingered. “Traders who used to deal in cash earlier can’t function the same way. Plus there’s a limit of Rs 2 lakh cash dealing, it has made vegetable trade impractical,” he said.

But Ramesh Mistry in the West Bengal’s Sunderbans sounded a differing note. The SBI banking correspondent, who is the only source of fresh currency notes for residents of the remote region inhabited by the Royal Bengal tiger and and crocodiles, says the situation is back to normal. “The long queues have vanished and people are now getting notes of smaller denomination. Several notes which were black were destroyed. I support this move.”

(with inputs from Gurpreet Nibber in Chandigarh and Joydeep Thakur in Delhi)