Trust, credit, e-wallets saw grocers through note ban
Gopi Chand, a grocery shop owner in Delhi’s Daryaganj, vividly remembers the year 1978 when the Morarji Desai-led Janata Party government scrapped 1,000-and 5,000-rupee banknotes to fight black money.
“There was a countrywide wave to boycott of everything foreign. Holi mein terrycot ke kapde jalaaye gaye kyunki us time ameer log woh pehente theh (terrycot clothes were burnt in Holi bonfires because those were worn by the rich),” said the 62-year-old, who runs the shop with his son, Jitendra.
Thirty-eight years later when Prime Minister Narendra Modi demonetised high-value banknotes on November 8 last year, Gopi was all for it and also asked his customers to support the move.
He believed the surprise decision, which in one stroke removed 86% of the currency in circulation, would weed out black money and disrupt terror funding as promised by the Prime Minister.
“I know of people who had parked their money, wads of notes, in Nepal. They got the money back in cars and deposited it in banks and burnt the rest,” he said.
A year on, his assessment: Demonetisation was a well-intended but badly executed move.
He faults the government for allowing everyone to deposit the scrapped notes in banks. “If there were 10 people in a family, all 10 went to the bank with their (identity) documents. The government should have said one family could deposit only a certain amount of old notes and that too if they carried ration card,” he said.
Critics and the Opposition have labelled demonetisation as the largest money-laundering scheme that destroyed the economy and put people through months of hardship as they struggled for cash.
For the crackdown against black money to work, the government should ban high-value notes, said Chand.
“Middle class can manage with ₹100 notes. If you are buying something expensive, pay through cheque or plastic money,” he said.
The note ban did not affect them much Sep 2016
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NEW DELHI: DEMONETISATION
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Dec 2016 Sep 2017 except for the first two or three days when there was confusion over the amount of money that could be deposited and withdrawn, the Chands said.
Between November 8 and March 31, 2017, when demonetisation ended officially, the government revised the deposit and withdrawal guidelines several times.
“Half the day would be gone by the time we could understand the new guidelines. It was crazy,” said Jitendra. “Cash just disappeared from the market as people rushed to deposit banned notes. There was chaos,” he said.
For days, snaking queues were seen outside bank branches and ATM kiosks as money was hard to come by in an economy that was largely cash-driven. Money was short but not trust. Within a week of the ban, Chands started giving goods on credit to regular customers. The fact that their shop was in a closely knit neighbourhood, where people know each other, helped.
“We were doomed had we been living in one of those colonies where people remain isolated,” said Gopi. “We gave items worth thousands of rupees on credit. We knew they would give us the money when they would have it. And they did,” he said.
While Chands went “cashless”, other grocers in the neighbourhood continued to accept banned notes.
“We used to send someone from our staff to deposit the notes. But that is alright, the entire country was standing in queues,” said Gopi’s younger brother Vivek, who has a shop close by.
For many of these mom and pop stores in the walled city, e-wallets were unheard of.
Prateek Jain, an undergraduate student at Delhi University, helped his father Rajesh open an account with digital payments firm Paytm.
“Forget about electronic payments, he did not have a smartphone for the longest time,” Prateek said.
“We couldn’t lose our customers and if it meant using Paytm, so be it. That is what I told myself,” said Rajesh.
Tears trickled down his wrinkled face as he feared retuning home without money for the third day from the long queues outside his bank branch in Gurgaon last December.
The Hindustan Times photograph of retired soldier Nand Lal crying and begging bank officials to let him withdraw his pension became the face of the people’s struggle during the cash crunch after the government’s shock recall of 500- and 1,000-rupee notes in November.
A year on, the 79-year-old widower is a happy man.
“Notebandi se kis ko fayda hua mujhe pata nahi. Par pehle mujhe koi poochta nahi tha, ab sab poochte hain. Bankwale bhi (I do not know who all benefited from the demonetisation drive. Nobody cared for me before. Now everyone takes care. Even bank officials),” Lal said.
Withdrawing money is easier now. The bank officials treat him with special care when he visits the New Colony branch of State Bank of India (SBI), usually on the fifth or sixth day of the month for his pension.
Lal lives alone in a dingy, rented room in Gurgaon’s Bhim Nagar, a few blocks from a property he once owned.
He gets a monthly pension of ₹19,700 in addition to ₹8,000 his Faridabad-based daughter, Manju, sends. He pays the
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