Chaos in India as people rush to change demonetised notes

Chaos continued across India on Monday as millions of people flocked to banks that struggled to dispense cash, following the demonetisation of high-value notes last week to stem corruption, money laundering, terrorism and counterfeiting.

Scuffles erupted in several places as ATM machines and banks ran out of bills to replace the 500-rupee (€6.88) and 1,000-rupee notes that prime minister Narendra Modi abolished on November 8th.

"There is chaos everywhere," said New Delhi's chief minister Arvind Kejriwal. He accused Mr Modi of overturning the lives of the poor and working classes, alleging that the rich, whose ill-gotten wealth the prime minister had targeted through the demonetisation, had found loopholes to circumvent the new rules.

As public anger mounted, the government loosened its tight limit on daily cash withdrawals and extended the deadline for using the de-recognised currency by 10 days to November 24th for specific purposes.

These included buying fuel at petrol stations, medicines and food at state-run stores and for paying government hospital, utility and crematorium bills.

Trucks stranded

The currency crisis was hitting essential food supplies, as tens of thousands of trucks responsible for transporting grain, vegetables and fruit were stranded on highways across the country, unable to pay either their drivers or for fuel.

Transport officials said more than 90 per cent of some three million trucks on Indian highways were immobile as petrol pumps, toll roads and roadside cafes refused to accept the demonetised currency.

Food shortages also triggered looting of at least one grain warehouse on Delhi’s outskirts, but this appeared to be a solitary event.

Mr Modi is under attack by opposition parties for cancelling the large-denomination rupee notes, amounting to about 86 per cent of the overall value of the currency in circulation, and for bringing a significant proportion of India’s economy to a standstill.

Many people were finding innovative ways around the crisis. In one instance, a patient paid a private hospital in eastern Kolkata (formerly Calcutta) 40,000 rupees (€548) in small change packed into gunny bags after the clinic declined to accept payment in old notes or via a cheque.

Piggy banks

Sukanta Chhaule’s family collected the coins after a WhatsApp appeal to scores of their apartment block neighbours who, in turn, raided their children’s piggy banks to collect the requisite amount.

Initially, the hospital refused to accept the coins, but relented after the Chhaules threatened them with police and legal action; staff spent six hours counting the coins.

In the nearby Sonagachi red light area, sex workers were working on credit. According to reports from Kolkata, some sex workers were recording their clients’ visits in a register, with the understanding that they would pay later.

“I have opened a book for my frequent customers, who earlier paid in 500- and 1,000-rupee notes, and am keeping a tally,” one sex worker said.