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Sudden currency move spoils business at Indian food market – 80 percent of India’s banknotes useless

NEW DELHI: In this Friday, Nov. 18, 2016 photo, a laborer sits on his cart waiting for work at Azadpur Mandi, one of Asia’s largest wholesale market for fruits and vegetables. —AP
NEW DELHI: In this Friday, Nov. 18, 2016 photo, a laborer sits on his cart waiting for work at Azadpur Mandi, one of Asia’s largest wholesale market for fruits and vegetables. —AP

NEW DELHI: The scale of India’s cash economy can be seen in the Azadpur Mandi wholesale fruit and vegetable market. Trucks bring load after load of fresh produce to its grimy lanes every day. Then a complex web of wholesale merchants, smaller traders and retailers delivers the produce to most of north India.

Almost every transaction, like most in India, is done in cash. And business at the massive New Delhi market is evaporating, the food spoiling and wasted, two weeks after the government’s surprise currency move made more than 80 percent of India’s banknotes useless.

By withdrawing all 500- and 1,000-rupee notes from circulation, the government is trying to clean India’s economy of “black money,” or untaxed wealth.  Its success remains to be seen, but for now the move has created serpentine queues outsides banks and ATMs of people replacing their rupee notes or making small withdrawals.

Few people have access to banks, however. The vast majority of Indians earn and spend in cash, and more than half of the country’s 1.3 billion people have no bank accounts. In Azadpur people are upset: the impossibly wiry laborers who transport fruit and vegetables in handcarts around the 90-acre market, the big traders who conduct hundreds of thousands of rupees of business in a day and the small retailers who buy a few baskets or crates of food to sell each day.
Stopping to talk to a reporter would have been impossible a month ago, but business at the market was so thin on a recent day that groups of traders and workers were free to speak. A look at how India’s currency move has impacted people at one crucial market.

Worried about their next meal
Jitendra Prasad sits propped on one edge of his wooden handcart. Flies buzz over bunches of ripe bananas but few customers stop to even ask his price. People are holding on to their precious 10s and 100s out of fear of when they’ll be able to make their next withdrawal, he says. Banks and ATMs are dispensing the new 2,000 rupee bill but smaller bills are scant. For Prasad the big bills are useless: “We don’t have enough money to give them change.” So his fruit sits unsold or has to be thrown away.

Prime Minister Narendra Modi has claimed the currency move had the support of India’s poor, since it was aimed at corrupt wealth. “The poor are sleeping soundly. It is the rich who are looking to buy sleeping pills,” he declared a few days after the switch.

Prasad for one isn’t sleeping well.
“We are worried day and night. We are worried about having food to eat.” Handcart puller Jagat came to Azadpur Mandi to find work when he was 14. He has done every odd job the market has. And he says it’s never been harder to make enough to scrape by. “I would make 1,000 rupees a day ($14.50). At this time in the morning I would be so busy I wouldn’t have time to stop and talk. But now making even 200 rupees ($3) is hard.” Some days there is no work at all.
For now small loans, from other laborers in the market, is helping a little. “But if this doesn’t end soon we will starve. What else?”

Struggling to do business
Everywhere in the market groups of traders have time on their hands. “Nothing is going on here. Our suppliers have stopped buying. So, we are not getting any produce. What are we going to sell to our customers? Our investments are stuck. The new currency bills are not easily available,” says Sanjay, a wholesale buyer of sweet limes, who uses just one name. “Things are so bad that I’m actually taking the old currency notes from the few people who show up to buy,” he says pointing to the sacks of fruit piled in his shop.

He knows that it’ll be a while before he can deposit the bundles of old notes in the bank, “but what can I do? Throw it all away?” Amit Kumar hasn’t had a customer hail his auto rickshaw all morning, a rarity on usual days. Over the last two weeks he has seen fares drop by about half.  But food costs just as much and the rent won’t pay itself.
He’s not hopeful that the government will help ease the problem of cash flow that has hit people like him so hard. “Those people, who have passed this order, they won’t come to help us. They’ve created a problem for us. We have to find solutions.”
For now he’s borrowing money from anyone he can. “I borrow from one person and ask another person for more time to pay back his loan. That’s how we are managing.”

Counting their losses
Sharique Qureshi says he only comes to the market to take stock of his losses. Behind him piles of papaya, wrapped in newspapers, have begun to rot. “You can see that the market is empty. There is no produce, no customers. What are we going to do? Our business has stopped.”
It took Qureshi 10 years to set up a steady business. Now he worries that he will lose all his customers if money doesn’t make it way to the traders soon. “People aren’t even buying small amounts. Am I supposed to take another 10 years and find another way to earn money?” In the kiosk next to Qureshi, trader Irshad Ali shouts out, “I’ve lost 300,000 rupees ($4,400) since this news. Is anyone going to compensate for that?”-AP

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