Farmers groan, moneylenders make hay post demonetisation in MP | indore | Hindustan Times
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Farmers groan, moneylenders make hay post demonetisation in MP

indore Updated: Nov 24, 2016 08:58 IST
demonetisation

Money lenders in the rural areas are taking advantage of the demonetisation by offering Rs 400 in lieu of old Rs 500 banknote.(Pic for representation)

MP’s hinterland is yet to recover from demonetisation as many farmers are unable to sell their produce, people are unable to exchange old banknotes and traders are seeing a significant dip in business.

People living in remote villages with little access to bank are feeling the pinch of the move, while many have become vulnerable to exploitation by the rich.

Money lenders in the rural areas are taking advantage of the demonetisation by offering Rs 400 in lieu of old Rs 500 banknote in case of urgent cash requirement. While some traders are accepting scrapped banknotes if a customer buys goods worth Rs 500.

Besides, villagers alleged that traders in Chhota Nagda - the nearest town - have hiked prices of essentials like sugar and edible oil by up to Rs 5 per kg citing supply shortage from Indore.

Prime Minister Narendra Modi on November 8 announced that Rs 500 and Rs 1,000 banknotes would no longer be legal tender from November 9 in a bid to tackle corruption, tax evasion and undeclared wealth. Indians rely heavily on cash for their daily transactions and those living in rural areas or who do not have bank accounts have been particularly hard hit by the move.

When HT visited Kherod, a remote village in Dhar district about 80 km from Indore, villagers narrated how the ‘dhanna seth’ (rich traders) of Chhota Nagda are exploiting them.

“If you need cash urgently you can get it in Chhota Nagda but money lenders only give Rs 400 in exchange of recalled `500 banknote,” said Balram Rathore, a small shopkeeper who gets his supplies from Chhota Nagda. “As I am facing shortage of new banknotes, my business also got down by 50%,” he said.

Ansar Patel, a farmer of nearby Kushwada village, recounted a similar tale. “I have not taken this year’s soybean crop to mandi as I don’t want cheque payment or sell for lesser amount in cash. I also am not getting full value for old 500 banknotes at shops in Chhota Nagda,” he said.

Villagers are short of cash as cooperative banks, where most farmers have their accounts, have been kept out of the currency exchange scheme.

Some villagers have managed to exchange a limited amount of old banknotes at regional rural banks – the nearest being 9 km away – but this scheme cannot be availed more than once.

Traders at Chhota Nagda, however, deny the charges. “We are accepting only the new currency or offering credit to our regular customers. Our sales are down by 70% since demonetisation,” said Vijay Jain, a kirana merchant in Chhota Nagda.

Chhota Nagda - a bustling town with a population of 15,000 - attracts customers from surrounding villages.

Dhar collector Shriman Shukla told HT that he would get allegation of exploitation by villagers investigated.

“If traders are accepting old banknotes and offering goods or currency of lesser amount then I will get the allegation investigated. However, we don’t have any reports of traders selling essentials at higher prices after demonetisation,” he said.

The central government has announced that the next focus was to supply new currency in rural areas, but for villagers in Kherod, there will be no post-harvest celebrations this year.

CASHING IN

Money lenders in the rural areas are taking advantage of the demonetisation by offering Rs 400 in lieu of old Rs 500 banknote in case of urgent cash requirement

Some traders are accepting scrapped banknotes if a customer buys goods worth Rs 500

Traders in Chhota Nagda have hiked prices of essentials like sugar and edible oil by up to Rs 5 per kg citing supply shortage from Indore