While government of India’s move to scrap higher denomination notes has created panic in other states, Kashmir has by and large remained unaffected though small business suffered initially
|| MUDASIR QADRI
While scrapping of 500 and 1000 rupee notes has led to chaos and even deaths in different states across India, people in Kashmir have accepted the move without any panic. And according to experts one of the major reasons for calm in Kashmir has been the prevailing situation for the past over four months which has seen complete halt in any kind of economic activity. Noted economist Prof Nissar Ali argued that the demonetization has “little or no impact” on Kashmir there has been no normal business in the Valley and most of the business activities have remained suspended since July. “Though we have witnessed long queues of customers outside bank to exchange the scrapped note of higher denominations, the chaos and confusion that had hit the life in other parts of India hasn’t touched life in Kashmir mainly because there is no normal life on the roads for past four months,” said Ali. Apart from the prevailing situation that played its part to save people from demonetization, the fact that common Kashmiris don’t keep cash in bulk in their homes owing to long situation in the Valley have also saved people from problems. In J&K more than five lakh people work in the government sector and it is this large chunk of employees which largely drive the day today economy of the state as well. This salaried class gets monthly wages through bank accounts and they usually prioritize their withdrawals to suit daily needs. Several casualties have been reported from different parts of the country since the Prime Minister Narendra Modi announced a ban on the currency notes of 500 and 1000 on November 8. However Kashmir, which has witnessed 96 civilian killings and injuries to over 15000 people in security forces’ action post the killing of rebel commander Burhan Muzaffar Wani on July 8, has escaped the impact of the demonetization.
And according to experts one of the major reasons for calm in Kashmir has been the prevailing situation for the past over four months which has seen complete halt in any kind of economic activity.
In Kashmir the separatists have been issuing weekly protests calendars with a schedule for protests, shutdown and evening working hours. For the past four months the markets in Kashmir have been opening only in strict compliance to the weekly protests calendars during the relaxation hours. While the Valley has remained unaffected due to the scrapping of the notes, the markets have however witnessed a slump. “I had to purchase many items for my brother’s wedding but despite having cash I had to return empty handed from the market. Some shopkeepers are accepting Rs 500 and Rs 1000 notes, while others are flatly refusing,” said Muhammad Ibrahim, a resident from Sonwar in the summer capital Srinagar. When asked about the impact of demonetization on Kashmir, Finance Minister Haseeb Drabu told a news portal that there won’t be any specific impact on Kashmir. Notably, J&K Bank has equipped their branches with additional counters for the increased footfall and have also planned to be open for longer duration depending upon the area in which banks are located.
The demonetization has also proved wrong the claims made by some sections that Kashmir was a haven for black money and hawala transactions. “In comparison to rest of the country, the demonetization has been taken well by the people in Kashmir…the people in Kashmir traditionally keep money deposited in the bank accounts,” said Prof Ali. The economic survey of 2015-16 states that JK has estimated 42 lakh working population of which 58 per cent workforce is engaged in agrarian activities and remaining 42 percent is in private and public sector. While the agriculture activities come under tax rebate category, of the remaining working population almost 90 per cent have bank accounts. “So their incomes are already known and accounted for in the bank details,” said an expert wishing not to be named, adding cash was the preferred mode of payment in the Valley as most business establishments do not have other options such as point of sale devices for digital payments. But while demonetized notes were still being accepted in the Valley, a shortage of change has prompted people to exchange their old currency. However, the lower denomination notes are in short supply at most banks, which are giving out Rs 2,000 notes in exchange. This change crunch has impacted many small businesses.
The demonetization has also proved wrong the claims made by some sections that Kashmir was a haven for black money and hawala transactions.
At the flea market in Srinagar, jackets went for Rs 300, mufflers and scarves for Rs 50, and low-quality shirts and pants for as low as Rs 10. At one stall, a buyer tried to buy a scarf worth Rs 50 with a Rs 2,000 note, only to be told by the vendor that he did not have change even for Rs 500. People have also criticized official claims that the demonetization move has reduced stone pelting or militancy in the valley. In the second week of the November the defence minister Manohar Parrikar made a statement attributing the decline in cases of stone pelting against security forces in Kashmir, after months of unrest, to the government’s announcement that Rs 500 and Rs 1000 notes will no longer be legal tender. While praising Prime Minister Narendra Modi for his “daring move” to demonetise high-denomination currency, Parrikar said that after the announcement, there have been no further instances of stone pelting.
These remarks, which came at a time when unrest in the region entered its fifth month, have not only evoked sharp criticism in the Valley, but been contradicted even by the Jammu and Kashmir police. “Do you want us to believe that a youth is ready to be killed with a bullet or be blinded with a pellet because the separatists give him a 500 rupees note? That is absurd,” said a local Zahoor Ahmad. The statement was corroborated by a senior police official as well. “We have not come across any of the cases of seizure of hawala money after the decision to scrap the currency notes was announced neither has been found any discarded notes,” the official said.
