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| India-Pakistan |
| India's currency purge leaves millions broke |
| 2016-11-13 |
| [Deutsche Welle} Public anger has been rising as Indian banks struggle to dispense cash after the government withdrew large-denomination bills. Nearly half of India's 202,000 ATMs were shut and those that worked quickly ran out of cash. The government stunned the country on Tuesday when Prime Minister Narendra Modi announced in a televised address that the high-denomination bills would be withdrawn as part of a blitz on "black money" and fake notes. Modi's move was aimed at shrinking the "black economy," the term widely used to describe transactions that take place outside formal channels and which could be as high as 20 percent of gross domestic product, according to investment firm Ambit. The government has tried to reassure citizens that only tax evaders will suffer. But as these bills made up more than 80 percent of the currency in circulation, millions have been left without cash and large parts of the cash-driven economy have ground to a halt. Much of India's rural economy is powered by cash transactions, with few people having bank accounts or operating one even if they do. Some are angry at the prime minister - currently on an official visit to Japan - for leaving the country during the turmoil. "He is taking bullet-train rides in Japan and here you have old people knocking on bank doors for cash," Prabhat Kumar, a college student who said he had spent six hours waiting in line, told the Reuters news agency. "He has made a terrible mistake." The government has asked people to redeem the old 500 and 1,000 rupees notes by December 30. The central bank said there was enough cash available with banks and that it had made arrangements to deliver the new banknotes to branches across the country. Already many are skeptical that the plan will do much good. "Will it put an end to black money? Hardly. People with large amounts of black money will convert it into gold and foreign currency," the newspaper "Economic Times" said in an editorial earlier this week. Related: Chaos at Indian banks continues after ATMs reopen The BBC visited many ATMs of big banks in Delhi and Mumbai but found them either shut or not dispensing cash. ATMs opened at midnight after being shut for 48 hours and hundreds queued up early morning to make withdrawals. The surprise government move is aimed at tackling corruption and tax evasion. But many low-income Indians, traders and ordinary savers who rely on the cash economy have been badly hit. There are limits on cash withdrawals from ATMs and banks. Thousands of panicked Indians have been flocking to banks since they reopened on Thursday as the two notes accounted for about 85% of the cash in circulation. Banks have extended working hours and deployed additional staff to deal with the rush. Some bank officials said they had also brought in extra cash to deal with the situation. |
| Posted by:Pappy |