Prime Minister Narendra Modi’s middle name could well have been “binary"—because on anything he says or does, one can only be for or against it. But, after demonetisation, the waters have become muddied with 500 shades of grey (no reference to the colour of the new Rs500 notes).
At one extreme, we have the “believers", for whom demonetisation is precisely what the doctor (not Manmohan Singh, to be sure) ordered for the country. At the other end, we have politicians who see it as a diabolical conspiracy against the common people (essentially meaning themselves). In the centre, we have the erudite economists—pontificating on the inherent fallacies of demonetisation as a surgical instrument of macroeconomic policy. Then there are the armchair intelligentsia passing judgment on how an ill-advised move has been made worse by poor implementation. Finally, we have the Khan-Market, Coffee-Bar social activists who lament the lot of poor labourers and sabzi-wallahs—as their household helps or office staff stand in the queues at banks and ATMs.
It was tempting to join the party with the jottings of an itinerant salesman who had travelled extensively through seven states (if one can count Delhi as one) since 8 November (the day of demonetisation) and met with a wide cross-section of people in the course of his work.
On the evening of 8 November, I was lounging with colleagues at a guesthouse in Chittorgarh when the prime minister came on TV to announce the nation’s second “tryst with destiny at the stroke of midnight". We were about to set out for dinner to a dhaba, where we had been promised genuine “desi" chicken (as opposed to farm-bred broilers or cockerels that are passed off as free-range). All of us instinctively pulled out our wallets to check our stock of currency. I found four Rs500 notes, two hundreds and some tens and fives. The first call to be taken was whether to carry on with our dinner plans or not. Since the chicken was probably prepared already, we felt it may be unfair not to show up. We figured that between the four of us we had enough small denomination notes for a humble dhaba meal. Besides, after all, we knew the dhaba owner. Sure enough, our friendly Sardarji was more concerned about whether we enjoyed the chicken that he had specially procured for us from a village 20km away than his modest bill. He gladly accepted the Rs500 notes, saying “Koi baat nahin ji, manage ho jayega(don’t worry, I’ll manage)."
This “koi baat nahin ji" and “manage ho jayega" is the common refrain I heard through my three weeks on the road.
The first casualties of demonetisation at my hands were the guesthouse staff the next morning. I had to tell them ruefully, “Iss baar no baksheesh; agley baar; abhi note ka bahut kadki hain (no tips this time; next time; now there is a shortage of notes)." They all flashed an understanding smile and said in a friendly chorus: “koi baat nahin ji". The same was the response of the driver who dropped me to the Udaipur airport and the one who drove me around Delhi the next two days.
At the end of Day 1, I called the factories to check if dispatches had suffered. Plants—in Rajasthan, Uttar Pradesh, Madhya Pradesh and Bengal—reported that there was no significant impact, but were anticipating problems in truck availability as truck owners and drivers ran out of cash. However on Day 2, the apprehensions were allayed to a large extent with removal of tolls on highways and petrol pumps freely accepting the old Rs500 and Rs1,000 notes.
Next stop was Jabalpur on 10 November. A colleague who came by road from Bhopal said he had faced no problem on the way. En route, he had stopped at many points to meet business associates, but none of them appeared to be perturbed. There were stray rumours of truckloads of old notes being apprehended but nothing major. A gentleman from Khandwa who had a real estate business said they were saddled with a large amount of cash, but hoped to liquidate it in a day or two by making payments to labourers and suppliers of sand and aggregates who dealt primarily in cash. But, still there was no sense of alarm.
Later the same evening, at a business gathering of large traders from across Madhya Pradesh, there was a similar atmosphere of nonchalance. Some were indeed happy that cash from debtors was pouring in as customers were keen to settle accounts by depositing cash. Surely, there would be a temporary setback, they all agreed, but were also confident that things would bounce back soon. There was almost unanimous support for demonetisation, and clearly the prime minister had moved up several notches in their esteem irrespective of party affiliations. But those were early days.
By the morning of 11 November, one found serpentine queues outside banks. Landing at Delhi’s T3 terminal, one saw airport service staff—porters and cleaners—had been deployed at the ATM by airline executives with three or four debit cards to withdraw cash on their behalf, but they politely allowed passengers to go first.
Later the same evening, at a favourite watering hole of Delhi’s intellectual elite, one heard many conspiracy theories and apocryphal stories of how petty thugs were trying to make a quick buck by exchanging old notes for new at Connaught Place. But, they had still not mustered the economic arguments—therefore, the criticisms was limited to constitutional propriety (whether it required an ordinance—as Morarji Desai had done in 1978) and suspicion of political motives behind the move, very similar to what the politicians were saying on camera. Some stalwarts were seen to be flaunting the new “pinkies" like we did with commemorative Rs10 silver coins released on Gandhi Centenary.
Come the following Monday, the situation in UP had sharply deteriorated. Work had slowed or come to a halt at many major construction sites (mostly government projects in a rush to be completed before the elections are declared) as contractors were running short of cash. Among the states that I passed through since 8 November, UP had been affected the most, where in the construction and building materials business demand had slipped by 40-50%, according to rough estimates (of course, there are other contributing factors like restrictions on aggregates and sand mining etc.). In other states, the fall is far less, to the tune of around 20%, one would reckon from experience.
Back briefly in Kolkata, I was expecting fish prices to have crashed. Instead, I found there had been a sharp spike due to the onset of the “wedding season". My 85-year-old father, who refuses to use ATMs even in normal times, had collected his Rs20,000 cash from his next-door “home" branch of a multinational bank, which had a separate counter for senior citizens. The street food vendors in the “office padas" were doing brisk business at lunchtime. Most interestingly, my friendly neighbourhood chemist, who had resisted credit cards all along, said he had applied for a point-of-sale (POS) machine.
At Saoji restaurant in Nagpur, when I flashed my credit card, the cashier shot back: “Purana 500 ya 1,000 ke note nahin hain kya? (don’t you have any old Rs500 or Rs1,000 notes?)". Since I had run out of them, my accompanying colleague promptly fished out two old five-hundreds and encashed them. The general atmosphere, as Maharashtrians would say, was bindaas (carefree). Pointing to the mega-metro project under construction in the city, my driver said “Itna paisa jayega kahaan, idhar-ich ee rahene wale hain (where will so much money go? It will all stay here.)"
It was in Nagpur that I first heard the joke about the powerful Maratha politician – “Unke paas itna cash hain ki agar woh puraney note raddi mein bhi bechega, phir bhi who arab-pati rahega (he has so much cash that even if he sells it as scrap, he will still remain a billionaire)."
By the time I reached Jaipur on the weekend, things had pretty much began to settle down. I drove from Sikar and Shekhawati region through Bikaner and Nagor to Jodhpur. One trade associate put it succinctly, “Yeh mahina toh ‘adjustment’ pe hi nikal gaya, agle mahina kya hoga kitne naya 500 ka note bazar mein aata hain uske upar depend karega (This month has passed off on adjustment. What happens next month depends on how many Rs500 notes enter the market)." There were complaints of rich traders and businessmen hoarding new bank notes. While some alleged that banks were favouring big customers, others said, “Ab CCTV ke zamaney mein koi chance nahin leta hain, sab darey huey hain (in this age of CCTV cameras, no one is taking a chance. everyone is afraid)."
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On Monday, after the weekend bank holidays, the lines at ATMs were longer but still less than what they were a week ago. Spoke to people at a few places—patience had not worn off and they still felt the demonetisation was a “good for the country".
Finally, at Jodhpur, met an old friend from one of the largest business house of the city. His family was known for its strong loyalty to the Congress and being close to the former chief minister. I was surprised to find he was thrilled with demonetisation and claimed he had become a “convert", who now thinks Narendra Modi is the best thing to have happened to the country. But part of his happiness—he confided after a couple of drinks—was also because he felt demonetisation would hurt the BJP the most in Rajasthan.
Sandip Ghose is a writer and popular blogger on current affairs. Views expressed are own and does not reflect the views of his employers. His twitter handle in @SandipGhose.