Faced by an apathetic govt, rural India bears the brunt of demonetisation

Rajeev Khanna @CatchNews | Updated on: 18 November 2016, 17:09 IST
Rural India bears the brunt of demonetisation
Rural India bears the brunt of demonetisation (Arya Sharma/Catch News)

Rural India always stands last in queue when it comes to the provision of facilities or redressal of problems. It's no surprise that it now stands lands last in line to get any relief from the chaos caused by the government's sudden move to demonetise Rs 1000 and Rs 500 notes.

An apathetic approach

The government is now facing tremendous pressure from the District Central Cooperative Banks (DCCBs) to allow the exchange and deposit of old currency notes of Rs 500 and Rs 1000 along with withdrawal of money. The DCCBs are the institutions catering to the masses in the extreme rural areas across the country.

But the government wants to go slow on this demand.

A senior functionary from the government's financial set up disclosed that the reason for the government's lackadaisical approach is the lack of an effective monitoring mechanism in the remote villages of the country. "It cannot be ruled out that there is no counterfeit currency in circulation in these villages. Also there is black money that has been hoarded in the villages. Since agricultural income is tax free, there are no income tax details available," he said.

Saying that it's nothing new that villages are at the end of the line in getting facilities and relief, he says, "Look at power connections, markets, roads and even the ATMs. The villages get it last. There is nothing new in this phenomenon."

Also read - The plight of the rural Indian: standing in a vacuum outside the bank

According to him, if the DCCBs get the power to exchange and deposit old currency, it would not only provide relief to the rural population but will also keep the economy going because of the money being in circulation.

Hard questions

The government needs to answer this: if rural India has a poor monitoring mechanism, who is responsible for such a situation? In remote villages of India, particularly in states like Himachal Pradesh, Uttarakhand and Jammu and Kashmir, people are mainly dependent on the co-operative banks for their banking needs.

These people have been facing a lot of problems on account of the trickling cash flow available for withdrawal to the co-operative banks from the Reserve Bank of India (RBI) chests. The cold weather has been adding to their woes in the hilly terrain in particular.

"The cold weather in parts of India is only adding to people's woes in the hilly terrain"

"We have been convincing people to accept small withdrawals so that there is currency available for everyone. We have been telling them that if they just withdraw Rs 1,000 or Rs 500 there would be money available for more people to address the issues pertaining to their daily needs. Thankfully, the people because of the close knit society in the small villages have been co-operating till now," said a functionary of a co-operative bank in Sandhol area of Mandi district of Himachal Pradesh.

In Punjab and Haryana also, the small farmers and farm labourers have been the worst hit as they are unable to exchange their old currency while new currency and notes of Rs 100 denomination are not being paid to them by their employers who are themselves cash starved and the commission agents.