Panic was palpable on the streets across the State on Tuesday night following the sudden demonetisation of Rs.500 and Rs.1,000 currency notes with scores queueing up at ATM counters across the State and many who had immediate transaction needs or set out for long journeys finding themselves stranded without currency notes of lower denomination in their hands.
With shopkeepers refusing to accept the Rs.500 and Rs.1,000 notes in their hands, many did not know what to do to meet their immediate needs. The shopkeepers themselves appeared confused about what they would do if they were to accept the currency notes though the transactions were legal.
Divided opinion
Those who waited before ATM counters were divided in their views about the measure, many terming it an unavoidable inconvenience in the larger interest of the nation, but a fairly large number viewing the measure uncalled for and the cause of a major worry for them.
State Finance Minister T.M. Thomas Isaac came down heavily on the Central government’s decision, terming it “a mere drama” and a foolish act intended only to hoodwink the people. Black money, he said, is not hoarded in the form of currency and all that the government’s decision would do is to cause serious hardship to the people. Those without credit or debit cards would be really hit and worse would be the case of the State government’s financial transactions over the coming two days. “No economist whom I spoke to could see it as anything but a sham,” Dr. Isaac said.
However, State Planning Board member K.N. Harilal said though the measure would cause hardship to the people in the interim, it would help check spread of black money. “It is a positive move, though the dip in transactions could have short-term implications for the economy over the next two weeks. The public would also have to go through a difficult time in the transition phase. But in the long term it is bound to cleanse the economy,” he said, and added that the measure could also help to check inflationary pressure as cash in circulation comes down.
Move hailed
Welcoming the government decision, former Planning Board member G. Vijayaraghavan said it was bound to result in increased use of plastic money in the short term.
“While the lack of availability of lower denomination notes is bound to create problems for the public over the next few days, it has to be seen as a bold assault on black money,” he said.
Mr. Vijayaraghavan said the demonetisation could also have an impact on the real estate sector as land prices crash. “It would probably be followed by the introduction of currency of higher denomination,” he said.
With shopkeepers refusing to accept Rs.500 and Rs.1,000 notes, many do not know what to do.
