Why Urban India, Modi's biggest cheerleader, is losing faith in demonetisation

A recent survey by a social media-based opinion poll agency has found that support among Indians living in cities for the government’s move to scrap the higher denomination currency notes has slumped over the last three weeks.

Only 39 percent of the 8,526 people surveyed across Indian cities approved of the way the demonetisation drive has been rolled out, compared to around 51 percent of the public who were supportive of note-ban on Nov 18, Local Circles found.

“The survey was carried out in 200 cities across India. The rural areas weren’t covered by the survey,” the Chief Strategist Officer at Local Circles, K Yatish Rajawat, told InUth.

More than a month into the unprecedented demonetisation exercise, long queues at ATM and banks haven’t subsided and cash still remains a rare commodity among public. But urban India’s reservations about demonetisation have got more to them than just ATM and bank queues.

Money laundering still a problem

Clamping down on illegal money laundering, or ‘black money’, and curbing terrorism financing were given as main reasons behind abolishing 500 and 1000-rupee notes, as per Prime Minister’s address on Nov 8.

However, there have been numerous instances of the newly introduced Rs 2,000 notes being hoarded in large quantities, raising questions if note ban is meeting its originally stated goal.

Rs 93.52 lakh in the newly introduced 2,000-rupee notes were confiscated in Jaipur by authorities on Monday, according to reports. A day before that, Rs 2.5 crore in new currency was seized from a lawyer’s house in south Delhi, among other cases from different parts of the country.

The citizens seem to be noticing well the continuation of the adverse trend of illegal money laundering , as the Local Circles found in the first week of December. A survey then found that 84 percent people thought that money laundering had become common post-demonetisation.

“Large stashes of new currency are being found by investigative agencies. In many instances, bank personnel have been found involved in money laundering,” Rajawat from Local Circles said.

61 per cent complain about cash crunch

Public’s inability to get their hands on new currency notes is one of the main reason the demonetisation scheme is turning out to be unpopular.

About 61 per cent of urban respondents interviewed between Dec 8 and Dec 11 were not able to locate a working ATM, according to Local Circles survey.

People have also complained about bank rush not subsiding, even a month after the decision was announced.

Citizens have suggested that added measures must be taken to minimise rush at banks and notes should be transported faster, according to Local Circles.

Media reports have highlighted that cash ban has adversely impacted rural areas, where banking infrastructure isn’t adequate and it takes more time to transport newly printed currency due to relatively poor connectivity.

The banned notes formed 86 per cent of the money in circulation before Nov 8, and scrapping them is said to have affected the informal sector and workers who almost entirely relied on cash payments.

The Local Circles survey found that incomes of 20 percent of those surveyed had been impacted ‘negatively’ in the wake of the cash ban decision.