Clueless In Cash Country

Outside urban india, it is largely hard cash that has currency.

- Pragya Singh

Sudhir Panwar, a member of the Uttar Pradesh Planning Commission and professor at the university of Lucknow, was caught up in a strange, chaotic situation on Wednesday afternoon. A group of sugarcane farmers from western UP had travelled to the state capital that morning. they had arrived to meet state officials, to implore them to issue a sugarcane ‘reservation order’. this order has been long overdue this year. Without it, the sugar mills are not allowed to purchase the sugarcane crop, which is ready to be harvested.

But when the farmers reached Lucknow, and as they began their meetings, they realised that their currency notes were not being accepted by shopkeepers and restaurants. The night before, the government had invalidated Rs 500 and Rs 1,000 currency notes, but those were the only denominations they had. Lucknow—like most other places in the country—was witnessing a lot of panic as the government tried to assure people that cash in the form of Rs 2000 currency notes would be available in coming days. Thus, with all the banks and ATMs closed to public dealings on Wednesday, these hungry and confused farmers finally approached Panwar. “They were wandering around with nowhere to go or eat so I arranged some Rs 4,000 in cash for them, needless to say, with great difficulty,” says Panwar.

Right now, north India’s paddy farmers are flush with cash from fresh crop sales and need to purchase seeds for the sowing season. Most of their cash—and cash is the norm in rural India—is in the form of Rs 500 and Rs 1,000 notes, the most common denominations. “I expect rural banks, which are very inefficient, to turn away these people as they try to exchange their cash for the new currency,” Panwar adds. “The current feeling is that their money has been rendered worthless overnight.”