Common people across India continued to suffer on Monday with millions scrambling for cash to meet basic needs even as Prime Minister Narendra Modi defended the ban on high value notes, saying the move had given sleepless nights to those with ill-gotten wealth.
Addressing a public rally in Ghazipur in Uttar Pradesh, Modi said that as a result of demonetising 500 and 1,000 rupee notes, the poor were sleeping well and those who had unaccountd money were buying sleeping pills.
But on the streets of Delhi and elsewhere in the country, common people continued to bear the trauma of cashlessness for a sixth day after the surprise decision was announced on November 8 night.
Many fear that the cash crisis, despite Modi on Sunday asking people to be patient for 50 days, may continue longer than that. Going by the rate at which fresh currency is being disbursed to banks, at least four months are needed to replace demonetised notes, some experts said.
The hardships of the common people deepened on Monday as most banks in northern India were shut on account of Guru Nanak Dev Jayanti. Partly as a result, many ATMs could not be refurbished with fresh cash. And the machines which had money ran dry quickly as people waited in long queues.
Rajesh Kumar, a private company's employee in Noida near Delhi, said he withdrew Rs 2,500 - the maximum allowed - from an ATM "almost miraculously" after two days of managing his life with little cash.
"While I was coming down from the Sector 16 metro station, I saw a cash loading van approaching an ATM. I ran and was the first person to wait," Rajesh Kumar told IANS.
"Others gathered in no time and it became a long queue. Someone from the van announced that only Rs. 1 lakh was being loaded in the ATM which meant only the first 40 in the queue would be able to draw Rs 2,500 each. Others left disappointed."
But most others were not as lucky as him.
Anand Tokas, a south Delhi resident and a father of three, said he somehow managed to survive the last few days on Rs 2,000 in smaller denominations his kids had saved from their pocket money.
"Now I have nothing. If I don't withdraw cash today, I will have nothing to buy even basic essentials," said Tokas, a gym owner.
The demonetisation also hit businesses hard across the nation.
According to the Confederation of All India Traders, post-demonatisation trade in markets across the country had plunged to "25 per cent in comparison to normal days".
Anil Chopra, 42, who runs a departmental store in Greater Noida, said his losses were more than the estimate. He said sales at his store had fallen 50 per cent because people didn't have cash and "not everyone is able to pay through credit and debit cards".
The situation was no better in other major cities including Mumbai, Chennai, Bengaluru, Kolkata and Hyderabad as well as innumerable smaller towns where the ATM ratio is very poor.
"I neither have a debit nor credit card. No kirana (grocery) shop is accepting the old notes," complained Pochamma, a housewife. She had come to exchange notes at the State Bank of India branch in Hyderabad's Toli Chowki but returned disappointed.
The cash crisis also bedeviled people in several north-eastern states, especially in rural and remote areas.
"We are yet to get sufficient new Rs 2,000 denomination currency as well as old Rs 100 and smaller denomination notes, causing serious problems," a top official of United Bank of India told IANS.
AT LEAST 4 MONTHS NEEDED TO REPLACE DEMONETISED NOTES, NOT 50 DAYS
Fifty days of pain is what Prime Minister Narendra Modi has asked people to endure for his sudden demonetisation move.
But going by the rate at which fresh currency is being disbursed, even this time will prove grossly inadequate to set the economy right.
Here's why.
As per data furnished by the Finance Ministry, Rs 17,50,000 crore worth of currency notes were in circulation in October-end, out of which around 84 per cent or Rs 14,50,000 crore is in the now defunct Rs 500 and Rs 1,000 notes.
Against this, data furnished late on Sunday by the Finance Ministry said in the first four days -- Nov 10 to Nov 13 -- Rs 50,000 crore were dispensed to customers -- in Rs 100 and Rs 2,000 denominations -- either by withdrawal from their accounts or ATMs, or exchanged at bank and post office counters.
This, in 18 crore transactions, which has already made the banking system burst at its seams. In fact, on most days so far, and in most bank branches and ATMs, the money is getting exhausted even before the serpentine queues close in.
This does not go well with assurances given by the Reserve Bank of India (RBI) that it has enough currency to replenish banks for their disbursals. This, also after RBI printing presses are said to have started printing the new currencies several days ago, to create a good buffer.
Accordingly, even if we assume that the full amount of Rs 12,500 crore is being disbursed in Rs 2,000 denomination on a daily basis, it will take 116 days to replenish the financial system with what has been declared illegal. This also assumes that the total amount of currency declared illegal would be replaced with new notes.
It is not without reason a strong warning against demonetisation by the direct tax administration just four years ago, on what ill-effects it can bring and how futile the exercise can be -- all of which is waiting to play out in full bloom today.
"One common demand from the public is that high denomination currency notes particularly Rs 1,000 and Rs 500 should be demonetised," said the report authored by the chairman of the Central Board of Direct Taxes in 2012, titled: "Measures to Tackle Black Money in India and Abroad."
"In this connection, it is observed that demonetisation may not be a solution for tackling black money or economy, which is largely held in the form of benami properties, bullion and jewellery," said the 109-page report.
Further, it said, such a step will raise costs, as more currency notes will have to be printed, cause an adverse impact on the banking system, mainly on logistics issues, make transportation of cash difficult, inconvenience the public and play havoc with disbursal of wages.
"Demonetisation undertaken twice in the past -- 1946 and 1978 -- miserably failed, with less than 15 per cent of high currency notes being exchanged, while more than 85 per cent of the currency notes never surfaced, as the owners suspected penal action by government agencies."
