Hours after Prime Minister Narendra Modi banned 500 and 1000 rupee notes, small traders across the southern states have been hit hard by the government’s surprise move overnight. With banks and ATMs closed on Wednesday, markets and departmental stores are witnessing a dull day as many residents have chosen to postpone their non-essential purchases.
No change
55-year-old Babu, a lottery vendor in Thrissur, Kerala, is doubtful whether he will earn enough to pay for his lunch today. With a lottery ticket priced at Rs 30, Babu admits he hasn’t made a single sale since the morning.
"Two people have already asked me for change in return for Rs 500. They assumed I am not aware of the two denominations being invalid now. Since ATMs are shut today, I doubt whether people will spend the change they have on lottery tickets," he observes.
Govindankutty, another lottery vendor on MG road in Thrissur, echoes the same concerns.
"My earning for the day is gone...this has effected small vendors like me the most. People are taken aback at the sudden development and are hurriedly trying to give away their Rs 500 and Rs 1000 notes," he says.
Govindanakutty, lottery vendor at Thrissur
But Govindankutty has decided to be stationed at his usual spot outside a shop for the rest of the day in the hope that he would at least be able to earn whatever meagre amount he can manage to.
In Bengaluru’s Koramangala, Geetha, who runs a small tea-bakery store and a tender coconut shop, says that she fought with her first customer on Wednesday morning. "This man came and had a tea, cakes and smoked a cigarette. He also had one tender coconut. After all this, he hands me a Rs 500 note to pay his bill of Rs 75. He nonchalantly said that he had no change. When I refused it, he just kept repeating that he couldn't pay me otherwise. I had to let go because there was no point. But now I collect money before letting them eat.”
Sreenivasa, who runs a small shop selling flowers and pooja supplies near a temple at Jayanagar in Bengaluru, says that the sudden announcement has put him in a severe cash crunch. The shop requires a daily cash flow of between Rs 10,000 and Rs 20,000, and it’s impossible to find so much liquid cash in small denominations. “I couldn’t even pay any of my suppliers today. I have to pay them by this evening. If they accept Rs 500 notes, everything will be fine. But if they don’t I will be in trouble.”
Sreenivasa is worried that he won’t be able to get enough cash by the end of the day because business is also very slow on Wednesday morning. Even the customers who come to the shop are showing up only with Rs 500 notes. “Even if they buy things for only Rs 100, they want change of Rs 400. Most people are not actually coming to buy things. They are just coming to try and make change for themselves.”
Business is dull
In Chennai, the usually busy vegetable market at Thiruvanmiyur is near empty. Jaikumar, a vegetable seller says, "Usually the market is crowded at this time. Today, there are very less people here. No one has money."
43-year-old Shekar, who owns a departmental store in the same area says, “Our business is very dull today. Most of the people are coming to get change of 500 and 1000 rupee notes from last night. We helped few people but now we ourselves do not have change.”
Harish, who manages Eeze Fresh Vegetable Shops in Bengaluru’s HSR Layout is anxious. With customer walk-ins having dropped dramatically, he has to now worry about vegetables rotting in his store.
"Customer walk-ins have reduced to half, we had bought vegetables from the market the day before. And if they aren't sold in the next two days our stock will become stale,” he says.
Credit lines, Sodexho and plastic
As a temporary arrangement, Harish says, they are opening a line of credit for customers they know, until people have cash in their hands once more. He says, “Since this is a residential area, most customers are acquaintances. So, we have been asked by our owner to open an account book for two days. "
While a number of grocery stores and vegetable markets have chosen to accept 500 and 1000 rupee notes, the change tendered hasn’t been in cash. Shihab, who works at the Village hypermarket retail chain in Marathahalli pointed out that the store themselves had run out of change. “We are giving back change in the form of Sodexho coupons. We are totally out of Rs 100 notes. We are asking people to pay either by card or Sodexho.”
But the majority of small traders, it appears, have chosen to not accept payment in the 500 and 1000 rupee notes.
In Hyderabad, Said Mohammed Afsal, who owns Green mini mart at Kundan Bagh, Begumpet, witnessed a number of customers coming into the store last night to buy products worth Rs 500 or Rs 1000. But with the mini mart choosing to not accept the higher denomination notes on Wednesday, Afsal says, they are allowing only payments by credit or debit cards.
Govindaraju, the owner of a grocery store in Bengaluru’s Indiranagar explains, “Going to the bank to deposit money is too much of a hassle. Besides, I don't want to accumulate those old notes”
Reactions
52-year-old Mahedran, a vegetable seller in Chennai, argues that the government’s decision has left many people stranded and helpless overnight. "What the government has done is wrong. They should have given at least one week time to people. If a person just has Rs 500 what is he or she to do? "
Not far from him, Kalaiarasi, a 31-year-old fruit seller, however says, “I think it is a good initiative by the government. it will be difficult for two days for the people but it is fine."
Kalaiarasi is not alone in believing that the government’s move is in the larger interests of the country. Jatin Raghunath from Bengaluru points out, "It is just a matter of a couple of days. People are going on about regulating the flow of black money. When the government is trying to do something in this regard, the people are now complaining about the inconvenience. Can they not adjust for a couple of days?”