When demonetisation did not whip up a storm

Old timers remember 1978, the year the government phased out Rs. 10,000, Rs. 5,000 and Rs. 1,000 notes; say working class carried on with life without problems

November 14, 2016 01:06 am | Updated 08:02 am IST - NEW DELHI:

“Nobody had that kind of money [high denomination notes of Rs.10,000, Rs. 5,000 and Rs.1,000] when demonetisation happened in 1978. It did not affect us directly. The working class carried on without any problem. The kind of money that was taken off circulation was something that only families of industrialists had at that point. Currency notes of Rs.1,000 were a rarity in the hands of the common man. Back then, salaries and savings didn’t amount to the currency that was demonetised,” said 80-year-old Lakhbir Singh, an ex-government employee, talking about the 1978 demonetisation move.

Mr. Singh said that daily life — buying daily provisions, travel, paying rent, school fee, etc. — had carried on seamlessly.

“It would not be wrong to say that normal life carried on smoothly. There was no problem for the general public as a whole,” he added. He did say that this time, though the move was welcome, it had hit the common man the hardest.

‘Common man hit hard’

“I see people waiting in long lines outside banks and post offices, and these don’t seem to be getting shorter. The transition has hit the common man and his daily life has been disturbed. My son, who works in the public relations field, was asked to take advance payments in cash [old currency notes], which put him in a fix. I would say that comparing the two phases wouldn’t be fair. We hope, however, that the long-term benefits reach the common man,’’ he added.

Seventy-nine-year-old Promilla Tuli, who ran a garments factory back in 1978, recalled that demonetisation then had not affected her business. “I remember hearing that the government had abolished high-value notes, but it didn’t matter to us. We never had those notes; we didn’t feel the need for it,” she said.

In fact, many old-timers say that most people were not affected the last time the government experimented with demonetisation as the amount of high-value notes in circulation was quite less. The average citizen did not feel the pinch as these notes accounted for about 10 per cent of the money in circulation. This time, however, the government has withdrawn Rs.1,000 and Rs.500 notes, which account for over 85 per cent of the money, causing all sections of society being hit hard.

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