This Is How The Currency Demonetisation Has Hurt The Economy Across Sectors

The government¡¯s decision to ban old Rs 500 and Rs 1,000 currency notes to deal with tax evasion and black money issue has suddenly limited money supply in the economy. Here's a list of sectors hit by this move:

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1. Rot in the food chain

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Vegetable prices are dropping steeply, in some cases by half, because people don't have cash to buy groceries, retailers can't provide change and farmers can't hold back their produce because it would rot. Wholesale markets for vegetables and grains have received a body blow that has paralysed the supply chain.

Also Read: Farmers Fear Demonetisation Will Ruin Wheat Season As They Don't Have Money To Buy Seeds

Some retailers have offered groceries on credit while some farmers have actually given away their produce free. Grain mandis in some states were shut the first few days after demonetisation was announced. Many farmers refuse cheques because their accounts are linked to loans for fertilisers and seeds and they fear an automatic adjustment against their earnings.

2. Medical crisis

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Demonetisation is spawning a medical crisis with surgeries postponed and patients turned away. One major hospital estimates that only eight to 10 surgeries are being performed per day against an earlier average of 35 to 40. At smaller hospitals, patients have been refused treatment. Though the really big hospitals accept payment through other modes, cash is preferred at smaller clinics.

Pharmacists, meanwhile, are reporting dips in business of over 70%. They accept discontinued banknotes but are unable to return the change because of the severe cash crunch.

Also Read: Banker Shares Sad Truths About Demonetisation, Says Black Money 'Smells Like Rotten Leather'

Meanwhile, reports from MP say many government hospitals don't even have pharmacies on the premises.

3. Autos, taxis lose out to cashless options

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Demonetisation has affected the auto and taxi businesses in the two big metros. Auto drivers in Delhi say there's been a fall in riders and where earlier an autorickshaw driver may have earned Rs 500, he is now earning Rs 150-200 less. Many Delhiites are opting for cashless options like taxi aggregators. Mumbai's black and yellow cabs have been worst hit, but they hope to pick up business.

These days they are getting fares even as low as Rs 50 as no one wants to use up Rs 100 bills. Mumbaikars are, however, avoiding autos for long journeys, affecting their business.

4. Cinemas cancel shows, but the play goes on

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Usually, a film decides occupancy in cinema halls, but now it is the liquidity crisis. Shows in Rajasthan are being cancelled at smaller centres or running with negligible occupancy.

Also Read: This Village Of 10,000 People Has Just One Bank And Other Tales From These Days Of Demonetisation

Ahmedabad theatres have seen a drop of around 60% in footfall with only 8-10 tickets sold for some shows. In Surat, window sales have dropped by 40% and several night shows have been cancelled.Some multiplexes in Mumbai were not able to accept debit or credit cards, disappointing many.

However, play producers in Pune are now accepting cheques and extending credit so as to not to have to cancel shows.

5. All that glitters

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It's not all bad news for everyone. There's a gold rush in Madhya Pradesh where jewellers are believed to have done a year's business in the first three days of demonetization. Gold worth Rs 100 crore was traded in the state on November 9 and 10. The income-tax department has launched a series of raids on jewellers in Bhopal, Indore, Jabalpur and Satna, among other cities.

6. Fishy business

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Fish, the Bengali staple, is going off menus in the state. The entire chain from fishermen to wholesalers to retailers has been disrupted, with fish rotting in trawlers.In Gujarat, there are fears that trawlers won't be able to go out to sea after November 24, raising prices.

7. Mumbai vendors give up bargaining

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The business of street vendors has taken a hit across the country. In Bihar, cobblers, plumbers and construction workers are not getting work. Vendors in MP had to close their shops on several occasions, and sales have gone down by 40%. A parantha-seller in Rajasthan, where business is down by 60%, says he hasn't managed to scrape together even in five days what he could earlier earn in just one day.

Train and street vendors in Mumbai say they don't even bargain anymore, they just take whatever the customers give so that they don't go hungry.

8. Fewer tourists, no buyers for handicrafts

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Nearly 40% of individual tours in Maharashtra have been cancelled. Tour groups visiting different parts of India are finding their high-value notes of no use or are being charged extra.Tourists are shopping less.Rajasthan's handicrafts have seen sales drop by 70-80%.With Xmas near, what is generally a busy time for handicraft sellers is proving immensely lacklustre.