Chaos at In­dia banks as cash cri­sis deep­ens PM urges peo­ple to en­dure ‘hard­ship for only 50 days’

Kuwait Times - - BUSINESS -

Prime Min­is­ter Naren­dra Modi yes­ter­day made an emo­tional ap­peal to peo­ple to make In­dia graft-free, as chaotic scenes erupted out­side banks na­tion­wide af­ter high de­nom­i­na­tion notes were pulled from cir­cu­la­tion.

Modi sur­prised the country on Tues­day night when he an­nounced that 500 ($7.50) and 1,000 ru­pee notes would no longer be le­gal ten­der, in a de­sign to tackle wide­spread cor­rup­tion and tax eva­sion. Cus­tomers can ex­change their old bills for new ones or de­posit them in their ac­counts un­til De­cem­ber 30.

But even af­ter five days of the an­nounce­ment, des­per­ate peo­ple con­tin­ued to line up yes­ter­day for hours out­side banks and ATMs, with many run­ning out of cash by the af­ter­noon and prompt­ing anger against the gov­ern­ment’s lat­est anti-cor­rup­tion mea­sure. “Peo­ple are go­ing through great pains. I feel that pain. This scheme is not born from ar­ro­gance. I have seen such ad­ver­si­ties up close. I un­der­stand the trou­ble ev­ery­one is fac­ing,” Modi said at an event in west­ern Goa state.

“But this hard­ship is only for 50 days,” he added. “Please, 50 days, just give me 50 days. Af­ter De­cem­ber 30, I prom­ise to show you the In­dia that you have al­ways wished for.”

Modi also vowed to pur­sue his fight against cor­rup­tion and tax evaders even if it meant scan­ning records dat­ing back to In­dia’s in­de­pen­dence in 1947. Since com­ing to power in 2014, Modi has pledged to crack down on so-called black money-vast piles of wealth kept hid­den from the tax au­thor­i­ties-with new mea­sures in­clud­ing 10-year jail terms for evaders.

An­a­lysts have broadly wel­comed the lat­est ini­tia­tive, say­ing con­sumer spend­ing would likely dip in the short term as the new notes made their way into cir­cu­la­tion but that the move would boost GDP in the long term. The gov­ern­ment has said only tax dodgers will lose out from the bill-switch, but the move has left mil­lions scram­bling to with­draw cash for daily ex­penses at lo­cal gro­cers, veg­etable mar­kets or even for rick­shaw fares which are largely cash-driven.

To add to their woes, In­dia’s fi­nance min­is­ter said Satur­day that cash ma­chines could only dis­pense the newly-de­signed 500 ru­pee and 2,000 notes af­ter sev­eral weeks be­cause of a tech­ni­cal is­sue. Many low-in­come peo­ple in­clud­ing maids, driv­ers and lo­cal traders, with­out ac­cess to bank ac­counts and who store cash at home, com­plain that their sav­ings have been com­pletely wiped out. —AFP

AL­LA­HABAD: Gar­lands made of In­dian 10 Ru­pees de­nom­i­na­tion are dis­played for sale, in Al­la­habad yes­ter­day. Gar­lands made of cur­rency are in de­mand dur­ing the wed­ding sea­son. —AP

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