Cash ban slims big fat wed­dings

China Daily (Hong Kong) - - WORLD - By AGENCE FRANCEPRESSE in New Delhi

Jatin Pal’s wed­ding was just days away and his fam­ily were fi­nal­iz­ing plans for an ex­trav­a­gant mul­ti­day cel­e­bra­tion — then In­dian Prime Min­is­ter Naren­dra Modi banned high­de­nom­i­na­tion notes overnight, cast­ing a dark shadow over the fes­tiv­i­ties.

Within hours of Modi’s sur­prise Nov 8 an­nounce­ment, 500 and 1,000 ru­pee ($7.25, $14.50) notes — some 85 per­cent of all cash in cir­cu­la­tion — were with­drawn, leaving mil­lions across the vast coun­try out of pocket.

The move — de­scribed by the prime min­is­ter as a “sur­gi­cal strike” against cor­rup­tion and tax eva­sion — co­in­cided with the start of In­dia’s an­nual wed­ding sea­son, when thou­sands marry dur­ing a three-month pe­riod deemed aus­pi­cious in the Hindu faith.

“We marry once and you try to make it mem­o­rable in ev­ery pos­si­ble way. But the cash crunch is prov­ing oth­er­wise,” said Pal. “This has soured the hap­pi­ness and left a bad feel­ing.”

Life sav­ings are plowed into wed­dings in In­dia, with a typ­i­cal ur­ban fam­ily spend­ing up to $75,000 on cel­e­bra­tions, ac­cord­ing to an es­ti­mate by Gold­man Sachs.

Traders say al­most all wed­ding-re­lated pur­chases are tra­di­tion­ally made in cash from sav­ings put aside over years — even decades — but that the cur­rency ban means many fam­i­lies are be­ing forced to cut back.

“In­dian par­ents start plan­ning and sav­ing for the wed­ding as soon as a child is born,” Priyanka Gupta, owner of a bridal store told AFP, adding that she had seen a sig­nif­i­cant drop in busi­ness since the de­mon­e­ti­za­tion.

Delhi-based wed­ding plan­ner Shrawan Ku­mar said most of his clients spend be­tween 1.5 mil­lion and 2 mil­lion ru­pees, but that some had scaled back plans by as much as 40 per­cent. Oth­ers have sim­ply de­cided to post­pone or even can­cel.

“I can’t pay the waiter, pho­tog­ra­pher, trans­port, florist, veg­etable seller through checks. We are at a loss,” Ku­mar said.

Stub­bornly long queues out­side banks have be­come a ubiq­ui­tous sight across the coun­try as the new ru­pee bills have been slow to get into cir­cu­la­tion.

The govern­ment has put tem­po­rary re­stric­tions on the amount of cash peo­ple can ex­change or with­draw in an at­tempt to wean the coun­try off cash and bring more into the for­mal — and tax­able — bank­ing sec­tor.

Fol­low­ing out­rage, the govern­ment al­lowed a one-time with­drawal of 250,000 ru­pees per wed­ding party to help cover costs — small fry for an In­dian wed­ding.

But Pal’s fa­ther Ran­bir said they had twice tried and failed to get the ex­tra money un­der the scheme — which re­quires pa­per­work prov­ing a wed­ding is in the works — and in­stead bor­rowed around 450,000 ru­pees from friends.

“We should be mak­ing ar­range­ments for over 700 guests who will come to the wed­ding. Look what we are do­ing,” said Ran­bir.

Mad­hur Jain, who runs a wed­ding card shop in Old Delhi, said he had re­ceived just three or­ders a week since the de­mon­e­ti­za­tion, down from an av­er­age of 30.

“The old notes are out and new notes are nowhere to be seen,” Jain told AFP.

But de­spite most cus­tomers pay­ing in cash, bridal shop owner Gupta was quick to dis­miss sug­ges­tions that so-called “black money” -un­ac­counted money — was in­volved in the in­dus­try.

“There is no black money in­volved in the wed­dings,” she said.

“More than any­thing this means shat­tered dreams of fam­i­lies (hop­ing) to cel­e­brate an ideal wed­ding.”

We marry once and you try to make it mem­o­rable in ev­ery pos­si­ble way.” Jatin Pal, groom-to-be.

JALEES ANDRABI / AGENCE FRANCE-PRESSE

An In­dian ven­dor waits for cus­tomers in a shop sup­ply­ing tra­di­tional wed­ding out­fits in New Delhi. The govern­ment ban on high­de­nom­i­na­tion notes has forced many peo­ple to scaled back nup­tials by as much as 40 per­cent.

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