Demonetisation leaves rural economy paralysed

November 15, 2016 08:22 pm | Updated 08:22 pm IST - KOZHIKODE:

Last weekend, several instances of panam payattu (also called kurikkalyanam) in Kozhikode, Malappuram and other north Kerala districts were cancelled. The reason — the scrapping of Rs.1,000 and Rs.500 notes.

Panam Payattu is a traditional way of raising funds in the rural areas of these districts for building a house, marrying off a daughter or meeting a financial emergency. At the panam payattu event, held at a pre-scheduled venue and time (usually on weekends) by the needy person, people chip in for the cause with contributions of Rs.500 or its multiples.

Many of last weekend’s payattu events had to be cancelled because people had no money to give. This is one of the myriad examples of how the demonetisation of high value currency notes is fast paralysing the rural economy.

“I haven’t gone fishing for the past three days,” says Chekhov of Chelannur in Kozhikode. “People don’t have cash with them to pay for my fish.” The 66-year-old Chekhov and his colleagues make a living by fishing in the Pavayil Puzha, a tributary of Korappuzha River. The scooter-borne fish vendors, who buy fish regularly from Chekhov, have not shown up ever since the high value notes were demonetised.

While 1000s and 500s are invalidated, 100s and 50s are hard to come by. Lottery vendors and thattukada operators are among the worst-hit. An elderly lottery vendor at Atholi said he had hardly sold any tickets for the past five days.

P. Uthaman of Kakkodi, a retired sub-registrar officer who is now a registered document writer, said a large network of people who made a living from the real estate sector were now in trouble. Registration of land, houses and flats had come down to a fourth as the stamp duty and the registration fee needed to be paid in hard currency. Only small transactions and registration of wills and leases were taking place. He said people in the rural areas who had hoped to get their land sold for meeting financial emergencies were tense.

Artisans and semi-skilled workers, electricians and plumbers are all without an income now as people have postponed repairs to their houses. Cobblers, motorbike repairmen, mobile phone shop-owners, autorickshaw drivers and mini-lorry owners are underemployed. In the high-land areas of Kozhikode and Kannur districts, where small rubber plantations are aplenty, many rubber dealers’ shops remain shuttered as they don’t have the money to pay rubber producers.

The economic paralysis triggered by demonetisation in the rural areas have made the people fear that the situation is only going to be worse.

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