Currency swap sets off endless lines of frustration

Currency swap sets off endless lines of frustration

November 17, 2016
Indian volunteers distribute biscuits to the people, waiting in a queue to deposit and exchange 500 and 1000 rupee notes, outside a bank in Amritsar, Punjab, on Wednesday. — AFP
Indian volunteers distribute biscuits to the people, waiting in a queue to deposit and exchange 500 and 1000 rupee notes, outside a bank in Amritsar, Punjab, on Wednesday. — AFP


NEW DELHI — The first people showed up at the bank long before dawn, forming a line in the cold and the smog and silently waiting for the chance to withdraw their own money. They left more than seven hours later, each holding the handful of bills, worth $60 at the very most, that they’d been allowed to take home.

By midday, the lines snaked back and forth across the parking lot outside the Axis Bank branch in central New Delhi. Occasionally, a policeman carrying a long bamboo club would slap someone who stepped out of line. No one complained.

In a crowd like this, largely working-class and uneducated, no one talks back to a policeman. Especially not one carrying a club.

“They keep telling us that that this is good, and maybe they’re right,” said Shahida Parveen, a 36-year-old woman whose family had almost no usable money left. “But I don’t see anything good happening.”

This is just one bank, in one city, in a country of 1.3 billion people, millions of them increasingly desperate for cash amid a chaotic government effort to crack down on corruption by banning high-denomination currency notes.
In a nation hobbled by corruption, and where less than 3 percent of people file tax returns, the plan at first earned widespread approval.

But as the days ticked by, it became increasingly clear that the government was ill-prepared for a plan that suddenly pulled 86 percent of the country’s money supply out of circulation.

Families began hoarding small-denomination currency, merchants reported plummeting business and salaries went unpaid. Many businesses were refusing to accept the only new note rushed into circulation, worth 2,000 rupees, because they were unable to make change for it. The government says it’s also trying to get new 500-rupee bills into circulation, but they remain rarities.

Modi acknowledged the transition to the new currency might be briefly difficult, but said the government “spent long hours trying to figure out how to minimize the inconvenience.”

“The poor are now enjoying a sound sleep, while the rich are running around to buy sleeping pills” because of anxieties over their hoarded money, he said.

But in the parking lot outside the Axis Bank, no one was talking about a sound sleep.

“This is only to harass people like us,” said Parveen, a stay-at-home mother whose husband works as a small-time broker for rental properties, but has had no work for the past week. Hundreds of millions of Indians do not have bank accounts and use only cash. Many businesses only accept cash. “The people with all the black money, they’ll find a way to manage.”

“Do you see anyone with black money here?” demanded Chote Lal, 59, who had taken the day off from his office job to wait in line. “Only the poor are getting hurt. Who else is suffering?” — AP



While, A controversial Indian mining tycoon has taken over a royal palace and flown in Brazilian dancers at a reported cost of $75 million to celebrate his daughter’s wedding on Wednesday, as the country reels from a cash crisis.

Up to 50,000 people are expected at the sprawling Bangalore Palace, a mock Tudor castle in southern India, to celebrate the wedding of Gali Janardhan Reddy’s daughter, who was married in a Hindu ceremony earlier in the day.

Local media criticized the extravagance at a time when many Indians are struggling to find the cash to eat after the government’s shock move to pull high-value notes out of circulation in a bid to tackle tax evasion. But one associate defended the lavish expenditure, saying Reddy wanted people to remember the wedding of his only daughter.

“It is unfortunate that a daughter’s wedding has been made an issue out of envy and rivalry,” Manju Swamy said ahead of the party.

“It’s an important moment for her parents and they wanted to celebrate the event in a way that befits the family’s status in society.”

The 49-year-old Reddy, a former minister with the ruling Bharatiya Janata Party (BJP) in the southern state of Karnataka, spent three years in jail for his alleged involvement in a mining scam before he was released on bail last year.

Speaking to journalists in his hometown last week, he refused to reveal how much he was spending on the celebrations, but said everything would be declared to the tax authorities. — AFP


November 17, 2016
HIGHLIGHTS