The new 2000 Indian rupee banknotes. Photo: Reuters/ Mukesh Gupta
The rupee has gyrated between weakening and strengthening against the US dollar this year. Photo: Reuters/ Mukesh Gupta

India’s shock decision to scrap large currency notes last week is now being blamed for more than 30 deaths throughout the country.

People have committed suicide in the belief that their invalidated 500 rupee and 1,000 rupee notes have become worthless overnight, while many others, mainly elderly people, have died while standing in long, snaking queues waiting to exchange their banknotes.

There have also been reports of people dying because hospitals, pharmacies and ambulances refused to offer services in exchange for old notes, or gas station attendants refused to pump fuel into vehicles carrying them to hospitals.

Prime Minister Narendra Modi’s shock decision on November 8 was aimed at cracking down on the shadow economy but has brought India‘s cash economy to a virtual standstill as the abolished notes accounted for 86% of cash in circulation.

The chaotic situation has been exacerbated by rumors spread over social media.

In once such case, Dr R B Sinha of Chhapra, Bihar, held a news conference to quash media reports that he had died after tax officials raided his home and seized 60 million rupees (US$888,890) in illegal cash.

Dr Sinha denied that there had been a tax raid and said he pursuing legal against media outlets.

Meanwhile, the government has announced steps to ease a cash crunch for farmers who have been left stranded as traders have no cash to pay for their produce in the middle of the sowing and wedding season.

In the latest in a series of ad hoc steps, the government is allowing farmers to withdraw up to 25,000 rupees (US$368) a week against their crop loans to ensure that sowing of winter crops “takes place properly”, a senior finance ministry official said.

Economic Affairs Secretary Shaktikanta Das also said a time limit for farmers to pay crop insurance premiums has been extended by 15 days.

Many of India‘s 260 million farmers have no bank accounts and depend on local money lenders to fund sowing, which means those that have to borrow to sow winter crops like wheat or rapeseed could face debt trouble without a good harvest.

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