A year after the implementation of the demonetisation, vegetable, flower and other markets are abuzz with activity. Flower merchants such as S. Appa Rao at the Rajiv Gandhi Wholesale Flower Market are seen busy all through the day now. Ask him about the days of demonetisation. “We had to throw away the flowers or sell them at dirt cheap prices. The business was on a sharp downward spiral. We lost more than 50% of the business.”
Due to the cash crunch, the customer footfalls fell beyond imagination. A few of our co-vendors accepted notes of ₹500 and ₹1,000 to avoid losses. But most of the sellers were left with no option but to literally throw away bundles and bundles of withered flowers —this, despite slashing the prices by about 50%, he recalls.
But it has a counter argument. Fetching a few new currency notes in exchange of the banned ones or drawing cash from the ATM was a big achievement for common man. With the ATMs drying up quickly, little children in many homes turned out to be the saviours, thanks to their kiddy banks. The change they saved helped their parents buy grocery. “Then, whatever little cash was available was used judiciously,” says Syyed Baji, auto driver.
There are several other stories that still haunt the people. There were reports that senior citizens died waiting in queue lines in front of the banks/ATMs. A 70-year-old woman K. Vijayalaxmi died of cardiac arrest while standing in a queue at the SBI branch in Vuyyuru. A 67-year-old Polanki Innaiah collapsed and breathed his last while waiting to deposit the demonetised notes in the Andhra Bank branch at Phiranagipuram of Guntur district.
Pensioners were at their wits’ end as they had no means to exchange cash for cheque. Huge queues were seen at the District Treasury Office and post offices in rural areas. The banks used to issue tokens and suggest the pensioners come back the next day to withdraw money.
Performing marriage was next to impossible as the scarcity of cash in banks and the limit of ₹2.5 lakh withdrawal for a wedding became a cause for concern for parents. The bankers made it mandatory for account holders to give proof of wedding, copies of receipts of advances made to function halls and caterers, etc. They were also asked to provide details of the persons to whom the amount was to be paid, together with a declaration from such persons that they did not have any bank account.
The rural and informal economy suffered disproportionately because most transactions are cash-based. The banks too focused on replenishing the ATMs in urban areas rather than those located in the rural areas. ‘No Cash’ signboards on the ATM doors were a common sight.
The liquidity squeeze badly hit rural and construction workers, daily wagers and weekly wage earners. According to a rough estimate, the realty sector in the State, the biggest unorganised employment sector suffered a loss of about ₹20,000 crore as most of the transactions are not on paper or accounted for genuinely. The builders slowed down the construction activity due to cash crunch.
The State government even provided mobile phones to the poor, who did not own them, to encourage digital transactions and also launched ‘AP ePurse’, an app for the transactions. Mr. Naidu headed the panel on digital payments constituted by the Central government.
Nevertheless, the demonetisation has shown positive signs too. The non-cash transactions, including POS machines, cheques and online, have improved significantly in the State. Before November 6, 2016, such transactions accounted for only 8%. Now, they have touched 35.01% on average. The cash transactions were far fewer during the demonetisation period. Non-cash transactions touched 55% also then. People now seem to be preferring cash transactions with liquid cash available freely.
Cash transactions have come down to 65% from 92% prior to November 2016. As much as ₹1.62 lakh crore worth transactions (20 crore) are done everyday. Issuance of debit and credit cards went up. More than 82% Jan Dhan accounts holders have debit cards compared to less than 50% last year.
