India’s shock-and-awe currency move takes toll on poorest citizens

The surprise came when the authorities arrived to collect the body. Under the man’s mattress was a huge cache of 10.9 million rupees (Bt7.8 million) in banknotes. He was filthy rich by Indian standards yet he remained a beggar. And it seems he died of shock when he learned that Indian Prime Minister Narendra Modi had withdrawn 500- and 1,000-rupee notes from circulation. The man had gone from being secretly rich to being a genuine beggar overnight.
A video circulating shows officials counting the money by the roadside as the unfortunate man’s body lies on the pavement.
I dearly hope they gave him a decent funeral.
The withdrawal of the currency is hogged headlines not just in India, but throughout the world. In the far reaches of India, it has been a big bane. With little access to banks – the Indian economy has always been cash-based – rural inhabitants literally saw all their money go to waste.
A woman who had just sold her land for 5.5 million rupees in cash reportedly hanged herself thinking the money was worthless. She could have exchanged it at the bank.
There was little explanation for the withdrawal of the banknotes. It was meant to be a shock-and-awe move to catch off-guard those with “black” money – tax evaders, counterfeiters and corrupt politicians.
The prime minister had his ministers corralled in private before making his move. Obviously, he felt that many of them had bundles of cash stashed away.
It has been lauded by many as a good move to boost the Indian economy, to bring back all the hidden money into the system. Modi himself has promised to quit if he cannot turn this into a success story by the beginning of next year.
For now though, it remains a real pain. Malaysian students in India have complained that they cannot gain access to money.
The lines are long – very long – at the few banks within travelling distance.
Friends who visited India recently came home grumbling. The money they took with them became worthless overnight.
Luckily, they had paid for hotels and transport before departing. But they needed cash to eat, to visit places of interest. And they did not have any. The visit was obviously not a runaway success.
“We had to eat at places that accepted credit cards,” said one. And such places are often expensive.
One friend managed to find a bank, stand in line and extract 2,000 rupees (Bt1,000). You can’t have a great meal for three with that amount.
The withdrawal of the currency has also left India with another headache – what to do with all those notes, which have become like the Japanese “banana notes” our parents and grandparents in Malaysia threw away by the sackful back in the ’60s.
India is now suddenly home to about 23 billion worthless notes. Stacked one on top another, they would form a pile five times the height of Mount Everest.
Arranged in a line, it would reach the moon and back five times.
It’s mind-boggling, but it’s the price India is willing to pay to cut graft.
Of course, there is still plenty more “black” money stashed away in Swiss banks in the form of different currencies and gold, but this will help somewhat.