Black Money

Queuing up at the ATM/

On Tuesday evening ten days ago, Prime Minister Modi came on the news to announce that as of midnight, all 500 and 1000 rupee notes would be officially useless. These two bills, worth $7.50 and $15 respectively, are used in 85% of transactions in this cash economy, so everybody feels the inconvenience or devastation.  It's an attempt to root out and render useless all the "black money," the ill-gotten, un-taxed crime and corruption money that is making Pakistanis and gangsters rich, or so the rumors go. Modi added that the following day all banks and ATMs would be closed and after that people could go exchange old bills for new in small amounts at banks or draw money in small amounts from ATMs. He admonished us to ignore the inconvenience for the good of the country.

But guess what? The new bills are a different size and they don't work in ATMs so people can only get stacks of 100 rupee notes, 20 at a time, which equals about $30. Banks are handing out new 2000 rupee notes, but without 500s or 1000s vendors have trouble making change. A billion Indians are queuing up at banks and ATMs all over the country. Everywhere we go we see people lined up. The newspaper shows desperate people sleeping overnight in lines. Most ATMs are empty. Even though there's an ATM on every block, armored  trucks that can transport money are in short supply. 100 rupee notes take a lot of room in the ATMs. We've stood in line with all the others, only to have the machines run empty before we get to the front. I spent two of our recent vacation mornings walking around looking for working ATMs in Mumbai, with no luck. (Scott was there on business, and we all went along. I told Scott that living through this kind of an economic debacle should be an economist's dream, but he's not so sure.) It's quite the disaster. The government cancelled all public parking fees and tolls. Farmers and fruit and vegetable vendors have food rotting because people don't have cash. People have trouble paying the rickshaw and taxi drivers. It's tough for us because we don't have an Indian bank account, but Scott's colleague in Mumbai kindly gave us part of our reimbursement in cash to help us get by. Gangsters just hire people to exchange money at the banks for a small cut, and it's not surprising that the people at the bottom of society are hurting the most. The crisis is by no means resolved. Badly done, Modi!

Two days later: We have a government owned bank nearby with an ATM that gets loaded every night. We can walk over at 8pm and stand in line for about a half hour and get our 2000 rupees. Yay!