The Day When India Ran Out Of Cash (November 8th, 2016)
When I was sitting on my plane flying from Frankfurt to Delhi the Indian Prime Minister Narendra Modi during an unscheduled TV address gave only four hours' notice that virtually all the cash in the world's seventh-largest economy would be worthless, effective by midnight.
By that time the 500 ($7.30; £6; €7) and 1,000 rupee notes would no longer be legal tender. People were told they could deposit or change their old notes in banks until 30 December and new 500 and 2,000 rupee notes would be issued.
Why? The decision was taken to crack down on corruption and illegal cash holdings known as "black money". In an attempt to curb tax evasion, the government expects to bring billions of dollars of unaccounted cash into the economy because the banned bills make up more than 80% of the currency in circulation.
Some 90% of all economic transactions in India are in cash.
Upon my arrival at the Delhi airport all ATMs, currency exchange offices and banks had closed down for the next couple of days. During my two weeks travel around Rajasthan it was next to impossible to get any cash.
While the situation caused some inconvenience I could easily deal with it (relatively speaking) due to my credit card and a certain amount of EUR denominated cash I had brought in which was well accepted at shops.
However, for millions of Indian people and small businesses it was much worse. The realization that the 500 and 1,000 rupee notes in every man and woman's pocket were suddenly redundant let people flocking to banks and ATMs to withdraw cash or exchange the old notes. The queues were long and people were short of cash - even buying daily essentials like milk and bread had become difficult. I took these pictures of people queuing up at banks in Jaipur ten days after the announcement. And from what I know since then to the present day the situation has not changed dramatically to the positive...
Unpaid cash salaries for workers. Unemployed day-laborers. Farmers without cash to buy seeds and fertilizers for the sowing season. Disruption of supply chains. Stranded trucks (as drivers were short of cash to pay for fuel). Et cetera. I was surprised, how patient and disciplined the Indian people overall dealt with the situation.
As always, there are two sides to the coin: There is an enormous amount of tax evasion money hoarded by billionaires and big companies that could be used to provide funds for urgently needed public infrastructure and education investments. On the flip side there are serious short to medium term disruptions to the economy and millions of casualties – so to speak - among the poorest of the poor...
#rajasthan
When I was sitting on my plane flying from Frankfurt to Delhi the Indian Prime Minister Narendra Modi during an unscheduled TV address gave only four hours' notice that virtually all the cash in the world's seventh-largest economy would be worthless, effective by midnight.
By that time the 500 ($7.30; £6; €7) and 1,000 rupee notes would no longer be legal tender. People were told they could deposit or change their old notes in banks until 30 December and new 500 and 2,000 rupee notes would be issued.
Why? The decision was taken to crack down on corruption and illegal cash holdings known as "black money". In an attempt to curb tax evasion, the government expects to bring billions of dollars of unaccounted cash into the economy because the banned bills make up more than 80% of the currency in circulation.
Some 90% of all economic transactions in India are in cash.
Upon my arrival at the Delhi airport all ATMs, currency exchange offices and banks had closed down for the next couple of days. During my two weeks travel around Rajasthan it was next to impossible to get any cash.
While the situation caused some inconvenience I could easily deal with it (relatively speaking) due to my credit card and a certain amount of EUR denominated cash I had brought in which was well accepted at shops.
However, for millions of Indian people and small businesses it was much worse. The realization that the 500 and 1,000 rupee notes in every man and woman's pocket were suddenly redundant let people flocking to banks and ATMs to withdraw cash or exchange the old notes. The queues were long and people were short of cash - even buying daily essentials like milk and bread had become difficult. I took these pictures of people queuing up at banks in Jaipur ten days after the announcement. And from what I know since then to the present day the situation has not changed dramatically to the positive...
Unpaid cash salaries for workers. Unemployed day-laborers. Farmers without cash to buy seeds and fertilizers for the sowing season. Disruption of supply chains. Stranded trucks (as drivers were short of cash to pay for fuel). Et cetera. I was surprised, how patient and disciplined the Indian people overall dealt with the situation.
As always, there are two sides to the coin: There is an enormous amount of tax evasion money hoarded by billionaires and big companies that could be used to provide funds for urgently needed public infrastructure and education investments. On the flip side there are serious short to medium term disruptions to the economy and millions of casualties – so to speak - among the poorest of the poor...
#rajasthan
Incredible story and great photo accompaniment. Thanks for sharing.
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