Sud­den cur­rency move spoils busi­ness at In­dian food mar­ket

Kuwait Times - - BUSINESS -


The scale of In­dia’s cash econ­omy can be seen in the Azad­pur Mandi whole­sale fruit and veg­etable mar­ket. Trucks bring load af­ter load of fresh pro­duce to its grimy lanes ev­ery day. Then a com­plex web of whole­sale mer­chants, smaller traders and re­tail­ers de­liv­ers the pro­duce to most of north In­dia. Al­most ev­ery trans­ac­tion, like most in In­dia, is done in cash. And busi­ness at the mas­sive New Delhi mar­ket is evap­o­rat­ing, the food spoil­ing and wasted, two weeks af­ter the gov­ern­ment’s sur­prise cur­rency move made more than 80 per­cent of In­dia’s ban­knotes use­less.

By with­draw­ing all 500- and 1,000-ru­pee notes from cir­cu­la­tion, the gov­ern­ment is try­ing to clean In­dia’s econ­omy of “black money,” or un­taxed wealth. Its suc­cess re­mains to be seen, but for now the move has cre­ated ser­pen­tine queues out­sides banks and ATMs of peo­ple re­plac­ing their ru­pee notes or mak­ing small with­drawals.

Few peo­ple have ac­cess to banks, how­ever. The vast ma­jor­ity of In­di­ans earn and spend in cash, and more than half of the coun­try’s 1.3 bil­lion peo­ple have no bank ac­counts. In Azad­pur peo­ple are up­set: the im­pos­si­bly wiry la­bor­ers who trans­port fruit and veg­eta­bles in hand­carts around the 90-acre mar­ket, the big traders who con­duct hun­dreds of thou­sands of ru­pees of busi­ness in a day and the small re­tail­ers who buy a few bas­kets or crates of food to sell each day.

Stop­ping to talk to a re­porter would have been im­pos­si­ble a month ago, but busi­ness at the mar­ket was so thin on a re­cent day that groups of traders and work­ers were free to speak. A look at how In­dia’s cur­rency move has im­pacted peo­ple at one cru­cial mar­ket.

Wor­ried about their next meal

Ji­ten­dra Prasad sits propped on one edge of his wooden hand­cart. Flies buzz over bunches of ripe ba­nanas but few cus­tomers stop to even ask his price. Peo­ple are hold­ing on to their precious 10s and 100s out of fear of when they’ll be able to make their next with­drawal, he says. Banks and ATMs are dis­pens­ing the new 2,000 ru­pee bill but smaller bills are scant. For Prasad the big bills are use­less: “We don’t have enough money to give them change.” So his fruit sits un­sold or has to be thrown away. Prime Min­is­ter Naren­dra Modi has claimed the cur­rency move had the sup­port of In­dia’s poor, since it was aimed at cor­rupt wealth. “The poor are sleep­ing soundly. It is the rich who are look­ing to buy sleep­ing pills,” he de­clared a few days af­ter the switch. Prasad for one isn’t sleep­ing well. “We are wor­ried day and night. We are wor­ried about hav­ing food to eat.” Hand­cart puller Jagat came to Azad­pur Mandi to find work when he was 14. He has done ev­ery odd job the mar­ket has. And he says it’s never been harder to make enough to scrape by.

“I would make 1,000 ru­pees a day ($14.50). At this time in the morn­ing I would be so busy I wouldn’t have time to stop and talk. But now mak­ing even 200 ru­pees ($3) is hard.” Some days there is no work at all. For now small loans, from other la­bor­ers in the mar­ket, is help­ing a lit­tle. “But if this doesn’t end soon we will starve. What else?”

Ev­ery­where in the mar­ket groups of traders have time on their hands. “Noth­ing is go­ing on here. Our sup­pli­ers have stopped buy­ing. So, we are not get­ting any pro­duce. What are we go­ing to sell to our cus­tomers? Our in­vest­ments are stuck. The new cur­rency bills are not eas­ily avail­able,” says Sanjay, a whole­sale buyer of sweet limes, who uses just one name. “Things are so bad that I’m ac­tu­ally tak­ing the old cur­rency notes from the few peo­ple who show up to buy,” he says point­ing to the sacks of fruit piled in his hop.

He knows that it’ll be a while be­fore he can de­posit the bun­dles of old notes in the bank, “but what can I do? Throw it all away?”

Amit Kumar hasn’t had a cus­tomer hail his auto rick­shaw all morn­ing, a rar­ity on usual days. Over the last two weeks he has seen fares drop by about half. But food costs just as much and the rent won’t pay it­self. He’s not hope­ful that the gov­ern­ment will help ease the prob­lem of cash flow that has hit peo­ple like him so hard. — AP

NEW DELHI: A la­borer squats on a truck loaded with cu­cum­bers wait­ing for cus­tomers at Azad­pur Mandi, one of Asia’s largest whole­sale mar­ket for fruits and veg­eta­bles, in New Delhi, In­dia. The scale of In­dia’s cash econ­omy can be seen in this mar­ket. — AP

Strug­gling to do busi­ness

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