50 days after currency ban, the jury is out in hinterland

Bhubaneswar/ Bhopal/ Srinagar: As the 50-day deadline set by Prime Minister Narendra Modi for cash crisis to ease following demonetisation ended on Wednesday, the situation at the grassroots level is still grim although there are indications that the condition is improving slowly.

Farmers in rural areas in MP continue to go for distress sale of their produces, particularly perishable commodities such as vegetables. Tomato, which is usually sold at Rs 7 per kg at this period of time, is now sold at Rs 2 per kilo in many rural areas, according to vegetable trader Nand Swarup Kushwaha, who hails from Berkhedi village, nearly 30 km from Bhopal.

However, in Odisha, construction worker Basanti Barik is hopeful that the worst days are over. “For first two weeks after demonetisation, we got maximum one to two days’ work. Now, things are looking a little better. We are now getting three to four days work,” Barik said.

Seafood exporters of the state also have succeeded in tiding over the crisis. Their move to pay through bank cheques, drafts and digital payments has met with approval from the fish and prawn traders and they are readily accepting the cashless method as it has reduced chances of theft.

“The digital mode of transaction now ensures that the cash in our bank accounts is safe. Besides, we are not going to face any problem from the income-tax authorities in future as all the transactions are now recorded,” said Rudra Prasan Hota, general secretary of the Seafood Exporters Association of India, Odisha region.

But the Federation of Rajasthan Trade & Industry said it had incurred an estimated loss of `1 lakh crore in retail and manufacturing sectors due to demonetisation. The note ban at the peak of tourist and wedding season has hit the industries hard. The famous Jaipur Jewellery Show, handicraft exhibition Forex Fair and wedding exhibition Saat Fere were cancelled. Hotel industry took further hit from cancellation of film shootings and conferences during this period. The gems & jewellery industry, that employs around 2 lakh artisans, outsource work to thousands of small units.

“Contract and casual workers have been rendered jobless post-demonetisation,” said G. Kothari, president of Pithampur industrial organisation in Madhya Pradesh. The Pithampur industrial block, the largest industrial belt in the state, has for the first time witnessed labour unrest with workers hitting street to protest poor wages and working conditions. The farmers in the state are equally distressed. After demonetisation, the MP government closed “mandis” (agriculture markets) till November 14 owing to want of currency notes in the market.  After they opened, farmers were paid in cheques for the produces they sold to the traders in the mandis. However, farmers wanted cash payments,  leading to disruptions of operations in mandis. By December 29, 11 mandis in the state were closed. The officials, however, sought to play down the plight. “The problem persists only in Rajgarh district. We are in talks with the farmers,” said one official.

Rakesh Srivastav, managing director of the agriculture marketing board, said.

In Odisha, small and marginal farmers have started working in lands of others during the harvesting season to cut down on their need for cash.

Interestingly, the cash crisis has led to the revival of barter system in rural Odisha, especially in the tribal-dominated Koraput, Bolangir and Kahandi districts. At the weekly markets, the tribals exchange agricultural and forest products for items of their daily needs like salt, sugar, edible oil, spices and clothes.

“Previously, the procuring agents in weekly markets used to pay us money in lieu of our agricultural and forest products. Now, they are asking us to accept items of our daily requirements saying they have no cash in their hands,” said Rama Jakasika, a tribal resident of Muniguda in Rayagada district.

In coastal Kendrapara district, as harvesting of paddy crop gets underway, the age-old practice of “badalia” or barter system of exchanging labour services has also resumed.

(With inputs from Akshaya Kumar Sahoo, Rabindra Nath Choudhury and Sanjay Bohra)