Modi’s masterstroke may having wiped out crores of black money held in high-denomination cash, but it also created major panic amongst common citizens. Here is a series of tweeted photographs that show vendors and consumers getting innovative in the wake of demonetization
There has been a barrage of criticism against Prime Minister Narendra Modi’s announcement in November 8, 2016, to render Rs 500 and Rs 1,000 useless starting midnight that night. In one fell stroke, the move has been estimated to wipe out crores of black money held in high-denomination cash across the nation.
Panic struck almost immediately, at least among those who had stashed away their illicit income in cash troves. Reports of frenetic late-night jewellery buying immediately came to the fore, as desperate holders of black money tried to re-invest their money in other assets. Given that the announcement was made after 8 pm, well after currency bazaars had closed, gold remained the only viable asset that black money could be converted into.
However, the days that followed saw spikes in panic withdrawals at banks by common citizens, who struggled to meet daily cash needs (and some to hoard). Media reports also spoke of instances of those who also tried to game the system by having multiple persons withdraw or exchange their now-useless currency notes. Lines snaked around blocks where branches or ATMs were.
Smaller denomination notes, once at the bottom of the respectability ladder, suddenly became objects of desire. Even those who operate largely using plastic or digital platforms struggled for cash to meet daily needs such as auto-rickshaws or for vegetables or even that streetside tea.
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Naturally, it was only a matter of time before the great Indian jugaad kicked in. Only this time, it was savvy, digital and has the potential to forever change the way small businesses operate. Given that one of the goals of the demonetization move was to nudge more people into going cashless, and use formal and informal banking channels, including digital wallets, the sudden spurt in acceptance of digital payments by even micro businesses must count as one of the most suble, yet critical accomplishments of the move.
From vegetable vendors to cobblers to chaiwallahs – as PM Modi often refers to himself as – a slew of retail and services providers decided to adopt new-age payment methods to get around the severe restrictions on withdrawals and the sudden shortage of small denomination notes that they typically dealt in. We present a cross-section of India that shows how India’’s micro entrepreneurs have taken the demonetization step in their stride, even made a virtue of it.
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