No banks to turn to, daily wagers forced to exchange old for less

MUMBAI: Murtuza Cutlerywala and his brother, Yusuf, sell caps in Fort. Their pavement shop – established by their grandfather – has done brisk business for over 70 years. That is until five days ago when the government demonetized Rs 500 and Rs 1,000 notes. Since then, sales have dropped by 85%. “We used to make Rs 4,000 a day, now it’s just Rs 600,” says Murtuza.Yet, they are forced to turn away patrons with newly-minted 2,000-rupees notes. “Where will we get change?” asks Yusuf.
Hawkers, ragpickers and labourers, who typically earn and spend a few hundred rupees a day, have been struggling since Tuesday. And their plight has only worsened as lower denomination notes grow scarcer and money changers swoop in to make a profit on old notes. In Govandi, 55-year-old ragpicker Javed Sheikh was forced to accept an old Rs 500 note as payment from the proprietor of a ‘bhangar’ shop and then exchange it for a lesser amount. “Today, I desperately needed money to buy groceries and medicines for my grandson,” said Sheikh. “I gave Rs 500 and got back four 100-rupee notes.” He adds that rations are so scarce that his six-member family is surviving on just boiled rice and pickle.
The poor don’t have bank accounts and those that do can’t afford to stand in the serpentine queues outside banks and ATMs. Paanwala Jeetu Kumar, for instance, has seen a 40% drop in business as he isn’t taking old notes and doesn’t have change for the new 2,000-rupee ones. But scant earnings are forcing him to man his stall all day to make ends meet, which ensures he doesn’t have time to wait in line outside an ATM. Other hawkers like Ganga Singh are accepting old notes but only if customers are willing to buy two handbags for Rs 400. If they want just one 200-rupee bag in exchange for an old 500-rupee note, the Rs 300 in change is too dear.
Ragpickers and manual labourers are being squeezed from both ends. Not only are old Rs 500 notes worth less if they try to exchange them for 100-rupee bills but kirana stores are unwilling to return change. “The big stores insist that we buy provisions worth Rs 500 or they won’t take the old note,” says Halima Sheikh, who lives in Govandi’s Shivaji Nagar slum.