Indian Prime Minister Narendra Modi has a penchant for playing a political master stroke and his sudden impromptu decision on demonetising the old currency has caused unfathomable aggravation to poor Indians, while having little effect on the rich.
Many have been wasting hours in queues to get their currency exchanged. The problems for the common people, going beyond the inconvenience, is that nearly 50 people have died standing in queues outside banks and ATMs and many are still unable to dispense cash. Frustrations grew as reports came in that some banks are out of cash and ATMs are out of service. The worst affected are the daily wage workers who have no work and farmers being unable to pay for crops for the next harvest season.
People have started questioning Modi’s intentions and beginning to murmur that the government had not lived up to its grandiose promises made during the 2014 elections. But now, many Indians feel that Modi has failed to deliver promised reforms and had not fulfilled his campaign promise that “good days” were ahead for the country.
Meanwhile, angry scuffles breaking out is a common scene outside banks. Most of the panicked customers and lone breadwinners in the family have no option, but to wait outside to change currency. The problems go beyond inconvenience to common customers when they found ATMs had not been reconfigured to dispense new notes.
Ironically, the rich remain unscathed and the poor are being battered who rely heavily on currency for daily activities. The sudden demonetisation decision is hugely destabilising. Some economists question the government’s move and blame the policies without doing their homework. The problems multiply for more than half of Indians who still don’t have a bank account and nearly a quarter of the population has no government identification.
The crux of the chaos is that most transactions are done with cash. In the long run, this significant effect has multiple repercussions for the Indian economy.
-The writer is a doctoral researcher on financial literacy in the UAE.