Demonitization (the act of stripping a currency unit of its status as legal tender ) of 500 and 1000 rupees on 8th November by PM of India Narendra Modi, created chaos in the country. Such steps were taken by administration to curb corruption, terror financing and unaccounted wealth. This procedure was followed back in Jan 1946 and again in 1978. The highest denomination note ever printed by the Reserve Bank of India was the Rs 10,000 note in 1938 and again in 1954. But these notes were demonetized in January 1946 and again in January 1978, according to RBI data. Rs 1,000 and Rs 10,000 bank notes were in circulation prior to January 1946. Higher denomination banknotes of Rs 1,000, Rs 5,000 and Rs 10,000 were reintroduced in 1954 and all of them were demonetized in January 1978. The Rs 1,000 note made a comeback in November 2000. Rs 500 note came into circulation in October 1987. The move was then justified as attempt to contain the volume of banknotes in circulation due to inflation. However, this is the first time that Rs 2,000 currency note is being introduced.
Though in panic and with incomplete information the people got out of their homes around 8 PM to spend whatever they could using their 500 and 1000 notes which would be just bits of paper as soon as the clock struck twelve, the gold cost sky rocketed. The banks opened a day after, on 10 November. The queues were quite long, extending to atleast a block in some places, people were anxious to get their notes changed. So that they could return to their daily lives.
Apparently the arrangement made by the government was not enough. Many banks faced a cash crunch. The banks had to half the money of 4000 change of spiked currency to cater to the public. According to some people, the ATM was working slowly due to different size of the new notes. The Atm’s will take some time to recalibrate as the size of the new notes is smaller as compared to the old ones. Some people booked first class air tickets which would later be cancelled but the airlines refused to give refundable tickets. Probably the first instance where the great Indian jugaad failed.
The common people are facing problems especially the business class. Their business is taking a toll since there is no change available. Some people did have 2000 rupess note but it was useless since they couldn’t get the change for it. Day to day activities and market was slow. During this time the change lying around your house, under the couch, between the pillows, under the bedcover will be of use. So get off your laptops and phones after reading this post of course and start searching for it.
People need to have id proof and fill out a form to get their cash changed. So it’s a problem for people who don’t have their id’s with them. It poses a problem for a number of people like domestic abuse suffers who were hiding away money to escape, in rural areas where banks are far away, sex workers, people dealing in cash at mandis, street vendors and hawkers, tea garden workers etc.
There have been reports where hospitals have refused to release the dead body to the family, doctors have refused to provide treatment, chemists have refused to give medicines etc
What we need to do is cooperate with the government to make this a success so that all the problems faced by the common people are atleast repayed in some way. As an individual we can all try to be more patient while standing in queues and not start arguments which quickly turn into fights, so try to have orderly queues, dont try to trick kids or farmers or grocers etc to take your demonitized now useless notes, spread awareness about it as much as you can , inform your maids and workers about it, if somebody is in immediate need of money do try to help them in whatever way you can. And for the future please try to resort to digital media for money transactions as soon as possible.
Let me know your thoughts and experiences related to the demonitization of 500 and 1000 rupees notes in the comment section. 🙂