Informal sector: State reports

Lives put on hold

Print edition : December 23, 2016

Trucks are idle across Maharashtra in the wake of demonetisation. Photo: SHASHI ASHIWAL

Cancer patient Gopal Prasad Koshta could not exchange his Rs.500 note. Photo: Lyla Bavadam

Sukhdev Sharma (foreground),a patient, says chemists insist on more purchases than necessary if a Rs.500 note is given. Photo: Lyla Bavadam

The empty market in Karol Bagh, Delhi. Photo: Divya Trivedi

Business is dull in the usually busy Ranganathan Street in T. Nagar in Chennai. Photo: K.V. Srinivasan

A jewellery shop in Chennai wears a deserted look on December 1. Photo: K.V. Srinivasan

The shop-lined street leading to Charminar in Hyderabad is known for brisk sales all through the year. It is a different story after demonetisation. Photo: K.V.S. GIRI

Mohammad Irfan in his bakery in Bhavani Nagar, Hyderabad. He says banks do not lend to small businesses and so he does not see any point in opening a bank account. Photo: KUNAL SHANKAR

Daulat Bi makes incense stricks at her home in Hassan Nagar in Hyderabad. She tries to make Rs.50 a day but since lower-denomination currency is in demand, she is unable to meet her everyday expenses. Photo: Kunal Shankar

Mohammad Ayub and his brother Yusuf at their embroidery unit in Bhavani Nagar. Photo: KUNAL SHANKAR

A panipuriwala going to start his day in Mumbai. Photo: The Hindu Archives

Panwalas in Mumbai. Their entrepreneurial spirit is so strong that they say they cannot think of working for someone else. Photo: Vijay Bate

During a recent film shooting in Chennai, the crew enjoying a lunch break. Photo: ILANGOVAN RAJASEKARAN

A shop in Paharganj, Delhi. The area is frequented by foreign tourists, but very few come now. Photo: Divya Trivedi

In Paharganj, Delhi, a shop-lined street that had milling cowds is virtually deserted now. Photo: DIVYA TRIVEDI

Jitender Madan, who runs a cafe-cum-bakery at Paharganj, shows the diary in which he notes the credit he allows regular customers. According to him, the government is hurting the wrong people. Photo: Divya Trivedi

Daily-wage construction workers at Kottivakkam in Chennai. The opportunities are coming down, not many contractors are coming these days, say labourers. Photo: M. Karunakaran


Off the roads

By Lyla Bavadam

THE government’s decision to recall Rs.500 and Rs.1,000 notes has taken a huge toll on the transportation business in Maharashtra, one of the biggest cash-based businesses in the unorganised sector. Dalbir Singh, general manager of the Maharashtra Tank Lorry Owners Association, which represents the majority of truck owners in the State, said the sector was facing an acute financial crunch. “Some 80 per cent of our road expenses are in cash,” he said, adding that these include fuel purchases, tolls, boarding of truckers and cleaners, vehicle maintenance en route, and payments to loaders and unloaders. These also include what is gently referred to as unaccounted submissions at State borders, checkposts, weigh bridges, etc. The association has more than 2,000 members who together own more than 10,000 trucks.

Some 60-67 per cent of the road expenses go to fuel, and Singh said that as long as the Rs.500 and Rs.1,000 notes were being accepted, fuel itself was not an issue. With the Rs.1,000 note completely out of circulation, these would have been a problem but for the fact that truckers are not getting any orders. “The rate of orders has drastically dropped. Traders are not giving orders to suppliers, so what will trucks carry?”

Trucks are lying idle all over the State. Those drivers who are employed with companies are slightly better off because they will receive their salaries if not their batta (additional travelling allowance). Salaries of drivers who are permanently employed with trucking companies are paid on an annual basis. “We give it to them when they go home on their annual holiday. They do not want it on a monthly basis because they live off their batta and say the salary is like an enforced saving,” Singh said. At the very least, a driver’s salary would be Rs.1,10,000.

But for those who depend on daily or per trip earnings, this period is fraught with tension. Drivers are paid Rs.8,000 per trip, cleaners get Rs.4,000/trip and mathadis (loaders) get Rs.500-700, depending on the consignment. These daily wages have currently stopped because the sector has been immobilised.

The little bit of business that struggles on also faces hurdles because of the preponderance of Rs.2,000 notes. “What is a driver going to do with a Rs.2,000 note at a roadside dhaba or for some minor repairs? And if we give him change it’s mainly 10s, 20s and 50s. How many bundles can he carry? There are no 100s or 500s. The government should have retained the Rs.500 note. Our drivers are simple people. They only understand straightforward cash transactions. For them to shift to cards and electronic payment modes will be very difficult,” Singh said.

The limit on withdrawals was also strangling the transport sector, he added. The All India Motor Transport Congress (AIMTC), with which the Maharashtra association is linked, has successfully fought for and won an increase in the weekly withdrawals to Rs.50,000 from current accounts.

Also hit by the recall of notes, although at another level, is the taxi business. Mumbai’s iconic black-and-yellow taxis have been severely hit by the demonetisation move. Drivers said that earnings had dropped to less than half. In the first 10 days, some parked their vehicles and shifted to driving Uber and Ola taxis. It is a growing trend for black-and-yellow taxi drivers to also work as drivers for other taxi companies.

Parmatma Sharma, however, is not one of these. He is a typical cabbie of the older era. He still owns and drives a ramshackle Premier Padmini when the majority of black-and-yellows have ditched this brand. Although he has lived and worked in Mumbai for more than two decades, he remains for all practical purposes a migrant. He has never brought his family to Mumbai from Uttar Pradesh but sends them lump sums of money every time someone goes to his village. He has no bank account and his existence is totally cash-based.

Not having a bank account suddenly became a big problem for people like Sharma, who had managed very well without one so far. “Why do I need one?” he asked. “I earn about 1,800 to 2,000 rupees a day. My essentials are fuel for the taxi and a little bit of food for myself. I don’t smoke or chew tobacco and I sleep in my taxi. I try and set aside Rs.300 every day to send home. After this demonetisation I have had to cut down on chai.” Calling himself a simple man, Sharma said he had no complaints about his earnings or his life until November 8. When demonetisation struck, Sharma was forced to rely entirely on his daily earnings of the past few days. “It was quite frightening. Even though I know I have enough money, it suddenly seemed as if I had none,” he said.

Further, he used to save his money in the big denominations as it was easier to send home, but when these were banned he realised he “could not take time off from driving to go and stand in queues and exchange money. I could not go and withdraw money from ATMs because I’m not an account holder. And suddenly business dropped off drastically because people were saving their change. For that first week I lived off about 500 rupees.” He says it was the kindness of a regular customer that saw him through. His main quandary was changing the Rs.14,500 he had with him. Unable to use banking services, he finally solved this problem by resorting to the very black market that the government is saying it wants to eliminate. He went to a “dealer” who said he would take Rs.100 for every Rs.500 note that he accepted and Rs.200 for every Rs.1,000 note. This ate into Sharma’s home stash but he said it was his only option. “I got off lightly,” he said. “My friends later told me the rates had become more usurious.”


Double victims

By Lyla Bavadam

THE footpath outside Tata Memorial Hospital in Mumbai is like a dormitory. Belongings in plastic bags hang on fences. Battered travel bags serve as pillows, and then there are old rugs, torn sheets, bundles of personal effects and the inevitable huddled figures weak from cancer or the treatment of it, poor patients who come from all over the country.

Most of them are so poor that they have never had to bother with exchanging Rs.1,000 notes. As Kamleshwar Jaiswal, who has accompanied his ailing wife from Bihar, said: “ Hazaar ka note to haath me aata hi nahi [a 1,000 rupee note has never been through my hands]”.

The stories below show how demonetisation has affected them and turned them into double victims.

Sujit Kumar from Patna is 28 years old. He is recovering from surgery for cancer. He does not know what sort it is but it has affected his face and mouth and he has had it since he was in his early teens. “I’ve grown up with cancer,” he said. He sees his cancer as a burden on his family and now the additional problems caused by demonetisation prompted him to travel on his own this time so as to save money. “I can manage on my own,” he said, putting on a brave face and smiling despite the recent surgery that has left his face extensively bandaged. He wears dark glasses because his eyes are weak and extra sensitive to light. The devastating effects of the illness have worn him out and his face belies his age but he holds himself with dignity.

In the same touching grace-under-pressure manner that was seen in everyone Frontline spoke to, Kumar said: “The problem is not in getting the money because the banks are being very helpful. The problem is with my weakness; walking even 100 metres is exhausting and since one can withdraw limited amounts at one time it means I have to go repeatedly. This is exhausting.”

Gopal Prasad Koshta is 38 years old. He is with his wife and small daughter. It is not their first trip to Mumbai for treatment. “Demonetisation happened on the 8th. At that time we were at home in Varanasi. We were scheduled to come to Mumbai anyway, but we had to come even earlier because my cancer flared up. We quickly changed whatever money we had but kept one 500-rupee note. Now, no one here is accepting this note, not the hospital chemist, nor anyone else. I’m not worried about medicine because a trust is looking after that but at some point I will have to have this note changed… it is a big amount,” he said.

Manoramadevi and her husband, Kamleshwar Jaiswal, hail from Purnia district of Bihar. She has uterine cancer, and like so many others who are referred to Tata Memorial, they regularly visit Mumbai for treatment. Like the others, Kamleshwar too said his immediate concern was not the treatment, which he says the hospital is looking after very well, but the uncertainty caused by demonetisation. “Our needs are few but we are feeling the pinch and more than anything we are fearful about how long this will last,” he said.

He added: “There are a lot of organisations who help us voluntarily and get us food, but sometimes one wants to eat something special… something that pleases the tongue, but I hesitate because money is suddenly limited. Who knows what emergency will suddenly crop up? And we don’t know how long this money crisis will last.”

Sukhdev Sharma (32) from Bokaro district in Jharkhand has had intensive and closely scheduled therapies. Surgery, chemotherapy and now radiation have followed in quick succession. His experiences have been similar to the others. “The chemist inside the hospital gives us change for 500-rupee notes, but they don’t always have the medicines we need. And sometimes the prescription is for medicines worth just 150 rupees. Chemists outside tell us either buy more medicine or don’t expect the full change.”

Kuch kar to nahi sakte. Sarkar ka hukumat hai [We can do nothing. It’s the government’s orders],” said Kumar. Weary acceptance and grace under pressure are what these double victims express as they sit on the footpaths outside Tata Memorial.


70 per cent drop in business

By Divya Trivedi

“MODI tere raj mein, katora aa gaya haath mein!” (Modi under your rule, we were reduced to holding begging bowls in our hands). Thousands of traders of Karol Bagh raised such slogans on November 24 as they blocked traffic in protest against the Central government’s demonetisation move. “Note nahi, PM Badlo!” (Not the currency, change the Prime Minister), screamed the posters the traders carried as they marched through the streets.

Karol Bagh is one of the oldest and biggest market clusters in Central Delhi comprising 14 markets that specialise in everything from leather goods to sanitary wares to clothes and jewellery. Each of the markets— Bapa Nagar, Beadon Pura, Reghar Pura, Ajmal Khan Road, Ghaffar Market, to name a few—has some 5,000 small and big retailers and wholesalers. International brands jostle with run-down shops.’

The Assembly constituency is represented by the Aam Aadmi Party, but the area has a sizable number of Bharatiya Janata Party supporters. Murli Mani, the Vyapar Mandal president, echoed the sentiments of his fellow businessmen when he said “the people will vote decisively in the next parliamentary elections”. While traders were not against demonetisation per se, they were angry that the move was implemented without planning. “The government should have first ensured that there was enough money in the banks for people to exchange their higher denomination notes. Go to any bank or ATM in Karol Bagh, cash disappears within the first hour itself. Except the very rich, who are capable of manipulation, all other classes of people have been inconvenienced by this unplanned decision,” he said. Besides, “it is becoming difficult to trust Modi anymore. He keeps saying I, nowhere does he say ‘we’,” Murli Mani said.

This is the peak wedding season in this part of the country when families throng the market, but the usually bustling Ajmal Khan Road in Karol Bagh wears a gloomy look. The only crowds visible are those standing outside banks and ATMs. “Business has fallen by 75 per cent since November 8,” said Shilpa, sitting idle at a “lehenga” store. “This is worse than the off season,” she said. A sign outside a jewellery store read: “We do not accept old Rs.500 and Rs.1,000 notes”, evidently to inform the Income Tax officials who had come calling following the gold-buying spree on the night of November 8. Income Tax sleuths raided jewellery shops in Karol Bagh and Bali Maran following reports that people were buying jewellery with back-dated receipts to get rid of their unaccounted money. “We are getting some customers, but the business class has completely disappeared,” said Suresh, a manager in a gold and silver jewellery store. While shop owners waited for a rare customer to show up, a pavement shoe-seller literally dozed off on his collection of footwear. Seventy per cent of the business at Ghaffar Market, which sells imported goods, had dried up, Pritam, an electronics store owner, said.

Although some shops in Karol Bagh accepted card payment, 90 per cent of the transactions were in cash, Murli Mani said. “Overall business has been hit by up to 40 per cent. There are no buyers. Even if we accept cards, right now the entire focus is to go to banks. Who has the time to do any shopping anymore?” he said.

Seema, a housewife, who was shopping for hosiery along with her mother-in-law, said they were only buying stuff they needed badly. “Demonetisation has helped me cut random costs and realise the value of money,” she said.

Signages such as “Fixed Price” and “No Bargaining” in stores were replaced by “'Paytm accepted here” and “Cards accepted here”, but they were few and far between. Kamlesh, who owns a furniture shop, said he would not get a point of sale (POS) any time soon.

“When Paytm transfers the money to the shopkeeper’s account, a 2.5 per cent charge is levied. My profit margin is only that much and what is the point in giving it away to Paytm?” he asked. While Paytm has slashed merchant fees until December 31, the typical fee charged by e-wallet companies such as Paytm and MobiKwik range anywhere between 1 and 4 per cent. Not all sellers, especially the ones selling items worth Rs.100-200, are willing to pay the fee.

“When one can get the full earning in cash, why go through the rigmarole of technology?” asked Kishan Chand, a toy seller. Although Paytm saw a surge in new merchants and customers signing up for it, it was yet to become a reliable vehicle of transactions. Rather than be considered a permanent way to transact, it was a quick-fix solution to tide over the crisis created by demonetisation. Several reasons were cited by a bunch of shoppers and shop keepers for not using e-wallets. Internet connections were still not fully secure or stable in India with data privacy being a huge concern for many. “The payment gateways and apps are unaudited. Where are the checks and balances if my money disappears into the system?” asked Kunal, a Delhi University student. “The government can also simply block the Internet as it has done so many times in the past. How will I order a meal if I am only dependent on an e-wallet and the government decides to pull the plug on the Net?”

The Labour Commissioner’s office has asked shopkeepers to open bank accounts for their staff and pay their salaries by cheque. “If this happens, it will be good. But, apparently, it takes time to open an account. How will I support my family until then?” asked Raju, who works as a helper in a garments shop.

While the demand for goods has dried up, so has the supply from factories. Across markets in Delhi, shopkeepers complained that factories stopped work after the demonetisation announcement was made. “Go to Naraina, Okhla, Noida, Punjabi Bagh or even to Agra, Jalandhar and Amritsar from where a lot of stuff comes to this market. All the factories have been hit as workers have gone home. There is no money to purchase even raw material, forget about payments to workers. How will they manufacture?” Murli Mani wondered. Some of the workers complained that their employers were offering them demonetised currency notes saying they could either take it or forgo payment.

“We have been pushed back by a year in our business. It will take a long time to recover from this mess,” he said.


Small traders’ woes

By T.S. Subramanian

SHABIR AHMED, a pavement vendor on Armenian Street at Parry’s Corner in Chennai, looks forlorn. He has spread out on a wooden platform in front of him an assortment of bangles, sticker-bindis, hair clips, packets of earbuds and safety pins, plastic toys and other knick-knacks. It is around 12:30 p.m. on Tuesday, November 29. A steady stream of people is heading to the nearby St. Mary’s co-cathedral and St. Antony’s shrine. Among those going to the church are advocates from the nearby Madras High Court. There is a swirl of humanity around. But Shabhir Ahmed hardly attracts any buyers. A woman cursorily looks at what he has displayed and moves on. A few feet away is a row of pavement stalls selling rose and jasmine garlands and candles. J. Parthasarathy, selling rose garlands, seems to be doing distress sale. He sells the garlands for Rs.10 each to two women devotees proceeding to the church.

Shabhir Ahmed said: “Business is dull. I have not paid my house rent this month and my house owner keeps ringing me up.” What was even more worrying for him is that he has to pay the fees for his children, who are studying in schools and colleges. “My business is not seasonal like textiles, which are generally sold during festivals. I have normal business through the year. But my trade has been hit now because nobody wants to use their loose change and lower-denomination currency notes as these are in short supply,” he said.

A. Subramani, who sells fruits in the adjacent space, is bitter that all businesses around him have received “a big blow” after demonetisation. “Since fruits rot quickly, I buy only limited quantities now, that too only the varieties that sell,” he said. “When people buy fruits for Rs.100 and give me the newly introduced Rs.2,000 note, I cannot give the change. So I lose business,” he said. “What we are earning now is spent only on food. We cannot spend our money on needless things,” Subramani added.

The garland sellers are a disappointed lot, too. “Orders are not coming,” was the brief reply from Kandan when he was asked how his business was doing. “Business is dull,” said K. Sudha. “When people buy garlands for Rs.100 and give us [a demonetised] Rs.500 note, how can we accept it or give them the change?” she asked. But she confidently declared, with a broad smile, that “the situation will be all right in two to three weeks”.

Be it Shabhir Ahmed; Sudha; M. Sikander, who is a pavement vendor on Ranganathan Street at T. Nagar in Chennai; S. Vijayalakshmi, who canvasses for customers for a tailoring shop; the women staff of Saravana Stores; or P.S. Anwar, a pavement vendor in Luz Corner who sells knitwear bought from Tirupur, the hosiery town in Tamil Nadu; the refrain is “business is dull” because there is “no money circulation”.

Conversations with pavement vendors and shop owners revealed two things.

The first is that sales usually slump after Deepavali. The festival fell on October 29 this year. The sales this year were dull even before demonetisation was announced. Secondly, the majority of vendors and shop owners said demonetisation would have been “a welcome move” if it had been implemented properly. Subsequent ad hoc announcements led to confusion, adding to the travails of people standing in long queues in front of banks and ATMs, they said.

T. Selvaraj (57) from Sathankulam, Tuticorin district, sells banians and underwear on Ranganathan Street. He used to earn Rs.1,500 a day; now he makes hardly Rs.500. But he is ready to rough it out if the measure is good for the country. K. Manikandan of Vaniyambadi, selling tender coconuts nearby, was even more enthusiastic about demonetisation. “Business is normal. Business is usually dull after the 25th of every month. My own sales have come down from Rs.2,500 to Rs.1,500 a day. Today is the 26th. Trade will pick up after December 1.” T. Parthiban, a security guard in a shopping complex near Ranganathan Street, said the visible outcome was that people were unable to go on a shopping spree.

But the most loquacious votary of demonetisation was P. Janardhanam (60), who was buying bananas from a fruit shop owned by A. Karthick on the pavement adjacent to the Kapaleesvarar temple tank in Mylapore, Chennai. Janardhanam owned a shop selling “covering jewellery” at Rasipuram in Namakkal district. Although sales in his shop named “Rasi Covering” had come down by a third, he praised the Prime Minister for “taking a route towards uprooting black money from circulation”. Marimuthu, the manager at a petrol outlet at Raja Annamalai Puram, went ballistic. Demonetisation to flush out black money was akin to a person “setting fire to a palace to drive out a rat”, he said. Equally furious was M. Jawahirullah from Kamudhi, Ramanathapuram district, a vendor on Ranganathan Street. “Modi announced it all of a sudden at 8 p.m. Immediately bus operators forced passengers to get down and abandon their trip as the higher denomination notes they gave for buying tickets ceased to be valid tender,” he said.

C.D. Sudarshan, proprietor of Gajalakshmi Textiles near Kapaleesvarar temple, put the issue in perspective. He said: “This is Ayyappa season [the months when Ayyappa devotees make a pilgrimage to Sabarimalai in Kerala]. Devotees are coming in to buy the black dhotis and shawls or towels. Customers buy textiles worth Rs.400 and give us the Rs.2,000 note. We are unable to give them change. So our business has received a terrible blow.”

With Christmas just a few weeks away and Pongal about 45 days away, vendors and shop owners are hoping that the new Rs.500 notes will come into circulation and their business will resume.


Misery made worse

By Kunal Shankar

IT seemed as if Hyderabad’s heart just stopped beating. The jewellery shops lined up along the road leading to the iconic Charminar employ security guards to regulate vehicles at the parking space outside them. On November 28, the parking slots were empty. Opposition parties had called a nationwide strike to protest against Prime Minister Narendra Modi’s demonetisation decision.

It is wedding season in Telangana. Business in Hyderabad’s Old City is usually brisk at this time of year. A short drive from Charminar is Talab Katta, which was once a drinking water reservoir, called Mir Jumla Lake, but which now is merely a large depression. Nearly half a million of the city’s predominantly Muslim working class population lives in this area. Several of the city’s cottage industries making products ranging from incense sticks to Hyderabad’s famous bangles are situated in the 20-odd neighbourhoods near Talab Katta. Countless women, and often children, make these wares on the streets outside their homes.

Mohammed Ayub and his brother Yusuf rent a 200-square-foot space for Rs.1,500 a month and embroider blouses along with two other tailors. The brothers have a network of sari shops in the area, which deliver blouse material to be embroidered. The work could last from a few hours to a couple of days. The brothers made about Rs.500 a day, but business has dropped by 50 per cent since the currency recall.

Ayub opened a savings account at a private bank two years ago, which he used only for a few months. Ayub realised it was of no use because he never had enough by the month end to set aside. Besides, he says, there are no bank branches in the entire Talab Katta area. “I used to lose half a day’s work if I went to the bank,” said Ayub. The brothers do not quite get the logic of going cashless because they never possessed a lot of money in the first place.

A few streets down at Hassan Nagar, another neighbourhood in Talab Katta, is where a large chunk of Hyderabad’s incense industry is located. Daulat Bi, who does not know her age, is making incense sticks along with her two-year-old granddaughter and other kids from the neighbourhood. One kilogram of sticks fetches her Rs.10. If she puts her mind to it, she manages to make about Rs.50 a day. A few houses down lives her employer, 20-year-old Shaik Haneef, whose older brother used to handle the business until he got a bank job. The raw material for the incense sticks is piled up in the room he has rented adjoining his house. Haneef says women come from across the city to pick up the raw material and return with finished rolls of sticks. He quips: “The brands you buy in the fancy stores in the city, they simply add perfume to it.” For the past three weeks, hardly anyone has turned up for “work”. Haneef sincerely wishes that the currency recall hits the rich hard. He says: “I don’t mind the temporary hardship if the government is serious about its intention.”

Begum Shaheeda, Haneef’s neighbour who is listening to the conversation, says she opened the “zero account”, referring to one of Prime Minister Modi’s pet projects for “financial inclusion”, the Pradhan Mantri Jan Dhan Yojana. She has had a balance of Rs.200 in it ever since, her first and only deposit. Begum Shaheeda is hoping that rumours about the Centre’s plan to deposit Rs.10,000 in every zero balance account is true.

In Talab Katta’s Bhavani Nagar, Mohammad Irfan’s wholesale bakery business of 15 years is running at half the capacity. He has a wood-fired clay oven next door and employs five young men. Retailers come to him to buy bread at Rs.15 a dozen. Irfan says: “Who doesn’t want financial inclusion? Banks don’t lend to businesses at Bhavani Nagar. They don’t trust us. I ran helter-skelter for a month to open a zero balance account. I still have zero balance.”

Syed Amin Jafri, a member of the Telangana State Legislative Council from Assadudin Owaisi’s All India Majlis-e-Ittehadul Muslimeen (AIMIM), claims city businesses are running at 20 per cent their capacity. Jafri says demonetisation has affected the rich and the poor alike. He points out that “even a multinational company like Amazon is forced to rely on the value payable post [VPP] model for its operations in India. That is what my generation, which grew up in the postal age, called ‘cash on delivery’. This is because Indians believe in liquid cash and not everybody is conversant with web transactions or even writing out a cheque.” Indeed several economists have also warned against portraying the overwhelming dependence on cash in the Indian economy as a negative trait.

Jafri, like several others, believes and hopes that this single decision of the Modi government will undermine the Bharatiya Janata Party’s “divisive agenda”. He says: “This move has united the rich and the poor against the government. The two and a half years of divisive agenda the BJP pursued after coming to power will not yield any dividends for the government this time. It will be wiped out.”

In his weekly column titled “Minority Report” in The Times of India, Jafri writes: “With all the segments of trade and markets coming to a near-standstill due to the cash crunch, the State’s Own Tax Revenues (SOTR) have taken a direct hit. The bulk of the State’s tax revenues come from VAT (Value Added Tax) and other Taxes on Trade, State Excise, Stamps and Registration, Motor Vehicle Tax, etc. and these have fallen to a trickle since November 9. Non-Tax revenues from mining and other sources, including Rs.10,900 crore targeted from sale of lands, have taken a plunge. To add to the State’s financial woes, the Union government is likely to curtail the releases of the State’s share in Central Taxes and Grants-in-Aid as its own financial position remains critical.”


The busy vendors

By Lyla Bavadam

MUMBAI has its own economic ecosystem of chaiwalas, cigarettewalas, paanwalas, sandwichwalas, bhelwalas, and so on, small entrepreneurial ventures, usually one-man shows, that fulfil a very Mumbai niche, that of serving people whose travel time is frequently as long as five hours from home to workplace and back. So well-entrenched are these small food businesses that they survive despite the ubiquitous haftas (money extorted by the police or others in authority) and municipal raids which disturb their equilibrium.

But the storm they are not weathering very well is demonetisation. Daily earnings are down to less than half, and with no established system of credit in this line, vendors are suffering with their backs to the wall. To make matters worse, they have no association or union to represent them. They say that if they manage to deal with this situation they will get back to their old earnings. The big hole in their meagre earnings these days are haftas they have to pay with the same regularity and the same amount.

Navtej (name changed) runs a chaat stall. The young man asked not to be identified because of fear of reprisal from the police or the officials of the Brihanmumbai Municipal Corporation (BMC) for speaking on haftas. He is not a licensed vendor and survives by paying off the police and officials of the municipality. His stall reflects its illegal status; it is makeshift in the extreme. When on-duty watchers call out that a municipal truck is on the prowl, Navtej would quickly abandon the rickety stand and walk away bearing his food stuff and stove on his head. Navtej’s daily sales of bhelpuri, sev puri and other delectables earned him Rs.3,000 a day. After November 8, he says his daily earnings have fallen by half. With the average cost of a plate of chaat items being Rs.40, it is easy to understand why his customers stopped coming. “It’s not as if people don’t have money,” he says, “ change is an issue.” He offers credit to regular customers and even allows them to keep their own accounts, but big suppliers do not extend the same courtesy to him. “It’s a one-day credit system in this line,” he says, explaining that payments have to be made within 24 hours.

He started his stall about a year and a half ago and has prospered since then despite the fact that he pays Rs.15,000 every month to the police and varying amounts to the municipal staff. At Rs.3,000 a day his average monthly earnings are Rs.70,000. He uses this money to provide vocational education to his younger brother and pays Rs.5,000 for the small room he has taken on rent in a bazaar. He also sends money to his mother. Thus, although he earns a good income, Navtej has a fiscal responsibility and most of this is a cash-oriented one. His business (and this includes haftas) is run totally on cash and so is the money he pays towards his rent.

Other vendors are also in a similar situation with the exception perhaps of the chaiwala, who said business slowed just for two days after demonetisation but is almost back to normal again.

The vendors are serviced by the dharwala (knife sharpener) and the plastic bagwala. They make three weekly rounds to these places. There is something extra pitiable about their condition because their services are easily dispensed with. The dharwala who visits the sandwichwala has not been seen since demonetisation. His work is linked to the others, and if they shut shop or slow down, he knows his services will not be required. The seller of plastic bags is an old man. He walks around lugging a bulky bag that weighs about 15 kilograms. He says he used to visit about 30 small businesses on a daily basis and at the end of the day usually had about Rs.500 to Rs.800. His business has been hit the hardest because plastic bags are an extravagance right now. His stock lies in his shanty and he says with the wry humour of someone who has hit rock bottom: “At least it’s not perishable.” It was never a roaring business so how is he managing now? He shrugs and gives no answer.

The entrepreneurial spirit is so strong in these vendors that they say they cannot think of working for someone else. Some of them have gone home to their villages as it is economical to do nothing rather than run their businesses at a time like this. Shutting down, they say, is a kind of saving; they don’t have to pay haftas.


Migrant workers’ woes

By Ravi Sharma

RUPEN TANIT, the security guard on night duty at the sprawling construction site that is to house training facilities and other offices for the defence behemoth Hindustan Aeronautics Limited (HAL) in Bengaluru’s Doddanekundi, is palpably excited. Despite the ennui brought on by the increasing cold and boredom associated with night duty, his alertness has apparently paid off. During his vigil around the construction site, Tanit spotted a mongrel dragging a doggy bag. He decided to check the contents of the plastic bag. In the dim light illuminating the site, he could see among the thrash, bundles of Rs.1,000 notes almost falling out of the bag. Just when he thought he was in luck, some thugs appeared and grabbed the bag from him and ran away.

For someone who has traversed 3,000-odd kilometres from a remote village in Assam’s Cachar district in search of a job in Bengaluru and who has not been paid his entire monthly salary of Rs.9,000, the bundles of notes must have looked tempting. The company that employs him paid part of his salary in demonetised notes, which he had to exchange with the help of touts who paid him Rs.900 for every Rs.1,000 note. “The company told us that it could pay us only in demonetised notes as the cash available with it was only in higher denomination notes. I had to pay my room rent and for my food. I exchanged two Rs.1,000 notes at a local kirana shop and two other notes through a fellow security guard who had contacted an ‘agent’. We were lucky to pay only Rs.100 as commission for every Rs.1,000 note. Some agents deducted Rs.200 to Rs.250 for every Rs.1,000 note. I have now opened a bank account. Hopefully, next month my salary will be credited to my bank account.”

Scores of migrants from West Bengal, the north-eastern States, Odisha, Chhattisgarh and Bihar, working as security guards, cooks, drivers and construction workers in the city, have been inconvenienced by the government’s demonetisation decision.

Tapan from Tripura’s Khowai district came to Bengaluru three months ago. He is a security guard at an apartment complex. The firm that employs him has asked him to furnish his bank account details for salary payment. Opening an account has become next to impossible because Tapan needs identity proof and a guarantor for that. Some workers have requested their employers to transfer their salaries to their colleague’s accounts. But withdrawing money from ATMs has not been easy.

These migrant workers are unable to send money home. Rakesh Mondal from Kolkata, who works in a cement plant, said although he had a bank account he left his cheque book back in his hometown; he withdraws money using his debit card. But with restrictions on the amount that can be withdrawn and with most ATMs either not functioning or with serpentine queues in front of them, accessing his money is an uphill task for Mondal.

N. Krishna Kumar, who runs an agarbathi (incense stick) manufacturing unit and employs more than 500 people, mostly women from across the border in Tamil Nadu, was unable to pay salaries in view of the limits on cash withdrawal. With most of his employees not having bank accounts, Kumar hit upon the idea of tying up with a local provision store for supplying provisions. His employees would buy the essential commodities and he would settle the bill through cheque payment. He said he handed over a cheque for Rs.18 lakh for the provisions that were picked up by his employees, adding that the logistics were an unnecessary waste of his company’s time. The government’s demonetisation move has also affected the sale of agarbathis. The company’s turnover in November was Rs.2 crore, far lower than its average monthly turnover of Rs.9 to Rs.10 crore. Krishna Kumar has indicated that he may have to trim his workforce if business continues to slide.

Business has not been so good for Bikas Subba of Darjeeling who came to Bengaluru two years ago to set up—no prizes for guessing—Darjeeling Hot Momos. His two momo mobile counters, which operate between 5 p.m. and 10 p.m. in an area in Whitefield that has a huge blue-collar migrant population, have seen a 50 per cent dip in business. “I used to sell Rs.3,500 worth of momos at each of my counters every day. But now my customers, the majority of whom work in nearby industrial units and a cement factory, do not have cash to buy momos. I have not managed to earn more than Rs.1,500 a day in the past three weeks.”

Pushcart vendors, pan shops and other small businesses are also facing a similar crunch. Said Kanchan Gurung, from a hamlet near Pokhara in Nepal, who works as a hair stylist in Bengaluru: “I tried to open an account, but the bank manager wanted too many details. I do not have an Aadhaar card. I am trying to get one. Most of my clients pay by card, so we are really short of cash.”


It’s e-pay in tinsel town

By Ilangovan Rajasekaran

HAS demonetisation dulled the razzle-dazzle of the film industry?

In Chennai, there is plenty of circumstantial evidence to suggest that it has not. The common perception is that the industry’s entire financial operations are on a “cash-and-carry” basis, but the fact is that nearly 60 per cent of its dealings are done through cheques and e-transactions.

The industry at present is not as strained as reports suggest it to be, and proof of this is the “shooting” under way for various projects in and around Chennai and in other locations. A famous Tamil film director-cum-producer–cum-actor who did not want to be named said that all professionally run production units had not felt the demonetisation squeeze so far. “But it could disturb the industry if the cash scarcity continued. Then it will be a serious issue. The industry today survives on an indigenously established system, evolved over a period of time, wherein everyone is linked to someone and hence no one is going to be jobless and wageless. Of course, there might be some difficulties in the disbursal of petty cash on the day of shooting,” the film-maker said.

The uniqueness of the industry, he said, was that performing artistes worked in tandem with creative minds such as cinematographers and art directors, besides technicians and workers, to produce a successful movie. “From the kitchen to the shoot set, it is a collective responsibility of everyone, wherein none would be left out even at times of crises,” he said.

Others in the industry endorsed his views. “The industry is doing normal business today, but not without fears of an uncertain future,” said Sankagiri M. Rajkumar, a young director who pledged his house in his village to shoot his first film, Vengayam (Onion), which talks about magicians and astrologers. He said that those who came into the industry fairly recently and with little knowledge about production management were the sufferers. Rajkumar, whose next film is ready for release, said the industry “is turning professional”.

Production, distribution, publicity, and so on can be carried out entirely through bank transactions. “A mere 20 per cent of the total expenses might have to be handled in cash, mainly for minor expenses.” A few units have started direct mobile transfers of cash too. But he issued a warning: “This is not the time for new ideas and concepts since the risk is heavy. Financiers and producers might be wary of financing projects of uncertain returns,” he said.

Such creative adventurers would have to wait until the situation eases, though the Tamil film industry even in good times languished in creative crisis, he said. “The majority of producers and directors have accepted that the makers of small-budget films are at the receiving end. You need 70 to 90 workers and technicians a day even for minimum-budget movies. One needs a minimum of Rs.3 lakh on a single day of shooting. Even to make a documentary, you have to have a minimum financial support of Rs.50 lakh,” he claimed.

G. Shiva, president of the Film Employees Federation of South India (FEFSI), the apex body that integrates and unifies associations of workers, technicians and artistes in south India, denied reports that the industry was facing a deep crisis. He said he had not received any adverse reports or incidents from production teams that are on the ground shooting films now. “About 40 to 50 shoots are going on at various places. Both the skilled and the unskilled receive their wages without any disturbance through e-transactions,” he said.

Shiva, who is also national president of the All India Film Employees Confederation, however, cautioned that if the financial uncertainty continued, the industry would slip into chaos. “You have to take care of all technicians, junior artistes and unskilled labourers who get employment for a minimum of 10 to 15 days in a month. Hence, we ensure that the lowest in the rung, like the trolley-pusher or the light boy, too, is paid a minimum wage of Rs.950 a day,” he said.

He claimed that “unlike in Mumbai where corporate houses have started funding projects in a more organised and professional manner, Kollywood business still buzzes around a few individual financiers, moneylenders and producers, besides a few banks. Only of late we have come across big names in production, such as Lyca, funding Tamil movies”.

Shiva insisted that in the past five to eight years or so, major transactions were carried out through banks. “The wages of workers and technicians would be paid in cheques or transferred to their accounts directly. Wages meant for members of each unit, such as cinematography, art direction, lighting, catering, transport, junior artistes, stunt actors and others, which come under the particular production house, were paid to the respective persons in charge, who then distributed them to their employees mostly once in a week either through e-transaction or by cheque,” he said.

This pyramidal system of work allotment and payment, Shiva said, made the industry a cohesive and tight-knit entity. He, however, refused to talk about the payment modes to leading artistes. “It is between the producer and the actor concerned. We are in no way connected with it,” he said.

But demonetisation has hit cinema halls hard. The scarcity of lower denomination currency notes has drastically reduced footfalls in movie halls across the State in particular and the country in general. “Barring a few next-gen multiplexes and those in malls, where e-ticketing for reserved seats, food and beverage orders and valet parking have been the sources of revenue, other theatre houses, especially those in B and C centres, have had their business shattered. At this hour of financial emergency, movies are given the least priority in any family’s budget,” said a theatre owner in Chengleput, near Chennai.

Films that hit theatres about a week after the demonetisation, including a Tamil film by Goutham Vasudeva Menon, took a heavy beating. This forced many others to postpone the release of their films.

Similar postponements of releases have taken place in Malayalam, Telugu, Kannada and other regional film industries too. Amid this enforced gloom, some see an opportunity to cheer. Said Shiva: “The postponements have come as a windfall for those unfortunates whose films are lying in the cans for long. These people can now find theatres to release their films.”


Tourists’ nightmare

By Divya Trivedi

VACANT stares greet the odd tourist in Paharganj, its rows and rows of shops empty with no sign of any business. This area opposite New Delhi Railway Station dates back to the Mughal era and is a backpacker’s delight with its sundry hotels, restaurants, curio shops and wholesale markets. Its emptiness was the most telling visual of a fledgling industry in a cashless economy one month into the demonetisation exercise.

Foreigners residing in India and tourists were hit hard when the Rs.500 and Rs.1,000 notes were suddenly declared not legal currency. The first few days were the worst with panic and confusion reigning supreme. No separate provisions were made, neither were help desks set up for them. While banks and the government remained unhelpful, touts offered to exchange old currency notes for a hefty commission. Faced with uncertainties, several tourists cancelled their plans and left the country.

November, December and January, being the coldest and most pleasant months, are considered peak season for the tourism industry. For budget travellers, Paharganj used to be the first stop before heading off to Goa, Rajasthan, Agra or other places. But this year, the place has seen a 60-70 per cent slump in business. Vishal, 34, who was born in the area and is now a restaurateur, said the only other time he had seen such a slump was before the Commonwealth Games in 2009 when some hotels and shops were demolished for widening roads and sprucing up the locale. “Aaj ki tareekh mein, zero tourists hain yahaan” (Today, there are zero tourists here), he said.

“I wouldn’t have had the time to even glance in your direction when you entered through the door, this time of the month last year. But now I have all the time in the world to answer your questions,” said Vikas, a tour operator. “You can see we are sitting twiddling our thumbs because 20-30 per cent of the business has been cancelled by clients and fresh bookings are not happening. The timing could not have been worse for the tourism industry,” he said.

When the announcement was made, most hoteliers stopped accepting Rs.500 and Rs.1000 notes and tourists had no option but to head to other countries, he said. “Tourists don’t have Indian bank accounts but hoteliers do. They could have accepted the old notes and got them exchanged later,” said Vikas. He was of the view that the dismal state of affairs would continue for six months. Imran, a tour operator based out of Connaught Place, said 40 per cent of his bookings had been cancelled. And as the exchange rates were pretty bad, people refrained from exchanging the currency as well. “People are hoarding whatever cash they have in 100s and the new notes. As every day a new rule is made, people are not sure if they should spend right now. Travelling and fun seem to be the last things on anybody’s mind at the moment,” he said.

Raja, a jewellery retailer and exporter to the United States, Israel and Europe, was angry with the media for showing that people were happy with the demonetisation drive. “Come to the homes of the poor to see how happy they are.” he raged. He claimed he saw some foreign tourists begging for food on the second day after the announcement. “They had not been able to buy any food with the old currency they had. Then someone gave them tea. I don’t know what happened to them later,” he said.

Amit from Israel said her friend could not eat for three days because she had no legal currency notes. She said there were no separate provisions for tourists and they too had to stand in long queues like others. When banks ran out of cash, her contacts and friends in India helped her out. Ofir, another Israeli, said he had at first decided to leave the country, but after standing in queues for three days he finally got some money. He would stick around until the money lasts. If the situation did not improve by then, he would be forced to leave, he said. Chen and Judy said rich travellers could use plastic money and not face deprivation but budget travellers like them were the ones put in difficulty. “I was in Rishikesh when this happened. More than me, I could see that people who are dependent on tourism for their livelihood were suddenly left in the lurch. People extended us credit and I could see they genuinely wanted to help but were helpless,” said Judy.

Touts had sprung up in several places, offering to exchange old currency notes for a hefty cut. With the limit of $70 per passenger at airports, people were cancelling their plans. With money exchanges too running out of cash, exchange rates dropped to below Rs.50 and many foreigners had to make do with it. In several places, this correspondent saw old currency notes still in circulation. Rs.500 notes were being given by customers to pay for meals that may have cost Rs.200. Some, like the Israelis, decided to stick together and support each other through an exceptional period in a foreign land.

Much of Paharganj, too, got by on credit and barter. Regular customers were allowed by hoteliers to use their services and have the food on the promise of future payments. Vishnu Prasad Upadhyay of Hotel Star View told Frontline: “The tourists who come for vacation have disappeared. Now only the ones who travel for work are coming. Initially, we helped many foreign tourists with cab fares and free meals. They are our regular customers. If we don't help them who will?”

Jitender Madan, who runs a 40-year-old cafe–cum-bakery, started to keep a diary for the purpose. According to him, the government is hurting the wrong people. “Modi wants to finish small businesses with this move, it would seem, and invite international companies to take over. Instead of harassing small traders, he should go after the bureaucracy which is the real culprit in black money. My licence fee is Rs.500 but I am forced to pay a bribe of Rs.25,000 every year. All departments of the government—police, crime, taxation, customs, municipal corporations—demand bribes. So who are the ones responsible for black money? Why doesn’t Modi go after them?” he asked.

With a lot of time on their hands now, most shopkeepers and hoteliers were eager to discuss the economics of the move and claimed to have better ideas than Modi on how to handle black money. The area, dominated by the Punjabi and Baniya communities, was considered a stronghold of the BJP. Several businessmen voiced their disaffection for the move. But it would not translate into a vote for a different party, many of them felt. “Indians derive sadistic pleasure from the suffering of their neighbours. Many people genuinely believe that rich black marketeers will be put in the dock through this. Personally, I know it is not true. But traders believe that something good will come of this suffering and the vote will not swing on such an issue. After all, it takes guts to make a surgical strike of this proportion,” said Raja.

Reports from Kerala to Punjab said that tourism had been hit hard. A tourist visiting the Taj Mahal in Agra reportedly tore up the notes and flung them outside the gate. Foreigners residing in India for the past few years too did not have it easy. Trevor from Vienna could not step outside his house for three days. Finally, in his circle of friends he found someone who was to leave India soon and was happy to give him his currency notes. “In turn, I made an online transfer to his account,” said Trevor. A diplomat from Germany had to break her son’s piggy bank in order to run the house and a visiting professor from Japan was left with no money at all, as the Japanese currency he was carrying was in the denomination of more than Rs.5,000 per note. Earlier, he withdrew Rs.5,000 a week from the bank, but then the rule changed and that too was stopped.

The talk in business circles of Delhi indicated that people with unaccounted money had already managed to turn it white. Oliver (name changed) from Texas in the United States, who lived in India for three years, said his landlord asked him for his passport so he could use it to deposit money in his account. “I refused him but know for a fact that he used the accounts of his other tenants, the maid and the driver to park his cash,” said Oliver.


Building slowdown

By R.K. Radhakrishnan

DEMONETISATION and its aftermath have been bad for construction workers in the informal labour markets in Chennai. In normal times, daybreak for them begins with the search for work at one of the over 50 points in the city. Trucks in barely running condition pull up at these points to pick up labourers whom the contractor who accompanies the vehicle, chooses.

During the third week after the currency withdrawal, visits to these predawn labour markets in the south of the city revealed that the number of labourers coming in to seek employment had gone down by more than half. “The opportunities have come down, not many contractors are coming these days,” said a labourer waiting at the Tiruvanmiyur point on November 27.

Labourers who gathered at the other southern points —Neelankarai, Injambakkam, Sholinganallur and Thoraipakkam—mostly echoed this view. “I will be forced to go back to working in a house [as a domestic help] at this rate,” rued a woman in Neelankarai. She said that she was not able to find a taker for the second straight day on November 28.

At many of these pick-up spots, about 70 labourers find work each day. Now this number is down to 20 or less. Multiple accounts from labourers at these spots indicated that they now had a less than 25 per cent chance of being picked up. That explained the drop in the number of hopefuls at the pick-up points along East Coast Road and Old Mahabalipuram Road, both still sunrise construction areas on the outskirts of the city.

The construction sector has “backward and forward linkages to approximately 265 ancillary industries” and they together created “more than 45 million jobs either directly or indirectly,” noted Ranjeet Mehta, director, PHD Chamber of Commerce and Industry, in an article titled “Real estate and construction sector set to create maximum jobs”, in Employment News of January 2016. “It is one of the fastest-growing sectors, contributing about 11 per cent of India’s GDP. According to the National Skill Development Corporation, the real estate and construction sector is set to become the prime employment generator in India,” he wrote.

But it has been a long winter for those in the construction sector, and how long the bad times have lasted is the only point of contestation. A builder who has delivered close to 10 million square feet in office and commercial space put it at two years, but two others said that the downturn had impacted them for just over a year.

The downward turn because of unrealistic prices, the slowing down of demand, the Real Estate Bill, demonetisation and, finally, a Provident Fund circular asking all principal employers to pay only via bank transactions to all employees have come together to bring the industry to a standstill. “It is like building Rome in a day,” said a builder, who did not want to be identified. “Yes, we need a lot of reforms in the sector, but to bring it all in the space of under a year and expect compliance at an early date is literally shutting down the industry,” he added.

Many builders in Tamil Nadu and Kerala said they had laid off workers, and many of the workers had returned to their homes in the northern States. The top few builders appeared to have retained their labourers because labour constituted about 10 per cent of the cost, and it was not possible to kick-start the business once it began to pick up, one big builder told this correspondent.

Many builders are walking a thin line between solvency and bankruptcy. “At any point of time, we have projects nearing completion, projects that are near or past the halfway mark, projects that have just commenced, and projects that will take off soon. Money from all these go to make up our rotation requirements,” said an executive working for a big builder.

The new Real Estate (Regulation and Development) Act, 2016, will mean that builders have to make sure that they do not move money from one project to another. The big players welcome the Bill, but it is expected to wipe out the smaller players, who depend on cash rotation. The November 8 announcement was the second shock this year. “If I have a cash flow issue somewhere in my system, that will be the end,” said a big builder who has built a reputation in the luxury segment and in commercial space. “I am not looking to send my workers away, but when I have cash flow problems, then everything else everywhere gets affected.”

He says he will be able to manage with cash flow issues and the Rs.24,000 limit for about a month. But when he has to pay his monthly interest to the bank, and if he does not have sufficient funds, a host of problems kick in. The builder can be blacklisted and be barred from further loans. “This is the problem. If the problem can end at an early date, we will all be okay,” he added.

A construction contractor revealed how he circumvented the ceiling on withdrawals: “I have accounts in five banks. I send my employees first thing in the morning to each of the branches. I have managed to a certain extent. Please remember that even Rs.1.2 lakh is too small an amount for me to run a week with.” With many others following this lead, Banks are running out of money quicker, leading to even more frayed tempers and, in some instances, such as in northern Kerala, unruly scenes.

Amid all this came a direction from the Provident Fund office asking the primary employer to pay all his employees only via bank transfer. In effect, the primary employer was responsible for the middleman (in this case a contractor) having a P.F. account. If he did not, then the primary employer had to pay directly to the bank accounts of his employees, regardless of whether they were permanent or contract employees. That was not all. The employee had to have an Aadhaar card, a bank account and a Permanent Account Number. The bank account had to be linked to the Aadhaar number before it was submitted to the P.F. office.

While most builders say they have no problem in complying with the requirement, they contend that a host of issues come in the way of implementation. “Of the total estimated 15.2 million short-duration out-migrants, more than 36.2 per cent are employed in the construction industry…. At present, only 9.8 million construction workers of the total 32 million are registered in the country,” Ranjeet Mehta noted.

The other issue is that most of the employees are not exclusively construction workers round the year. As much as 80 per cent of the employees have minimal skills. They switch jobs, during the lean season or for personal reasons. Some work for a length of time, do other less gruelling jobs and return to construction for short periods of time. So, contractors believe that they will face a choice: (1) use the “floating” worker and run into compliance issues with the regulatory authority, or (2) stop some part of the work so the worker becomes “P.F. office compliant”. “Either way, we lose. How can you insist on any of these things in places where finding labourers itself is a problem,” asked a contractor. “This is true for all areas of the country where there are low-intensity conflicts. We simply will have to stop working on projects in these places,” he added.

Demonetisation has, so far at least, not been able to end the black money that continues to flow in the sector, if builders are to be believed.

“At a registration office just a few days after the announcement, we had gone for registration of 30 flats [apartments]. The… [main person] there refused to accept old currency as bribe. Then we had to scramble,” said a builder. “The problem is that the day of registration is a sentimental one for most people buying a home. Most people also believe in auspicious timings. So, we had to scramble because the [main man] refused to register until money was handed over upfront. We even tried to tell him that we will come back with the money because we have many more registrations left. He refused to listen,” the builder added.

In another case, a builder was handed over old currency “running into about Rs.6 lakh” and told to deliver new currency. “What to do? We have to. We depend on him,” he added.

Perhaps the most fascinating case that this correspondent came across during the course of investigations into this story is this. A builder was asked to take a demand draft for a certain amount favouring a neighbouring registration office. He was asked to hand over the draft to that office. The favour was returned by the “beneficiary”, that is, the official in that registration office asked the same builder to take a DD for a certain amount to be handed over to the person from whom he got the earlier DD. What the exchange of DDs does is this: Some people who register their property pay in cash. If the cash is matched against the DD taken, then the cash can be pocketed. Technically, there is no money missing from the office.

Demonetisation has nothing to do with ending corruption. For now, it has made the life of anyone who offers a service difficult.