Demonetisation and the Himalayan Way of Life

Before the start of the Mountain Walker December 2016 trip, Ameen and I spent 4-5 hours daily for five days, standing in long queues to collect cash from the bank.

We were bound for some of the most interior areas in the Himalayas, where Card-machines and e-Wallets are a rarity and ATMs are few and far in-between; so carrying cash would be prudent.

Usually, when we are on a road-trip or embarking on a trek, we withdraw cash from ATMs in the main city or nearest big town of the state we go to (e.g. Shimla or Manali in Himachal Pradesh or Dehradun in Uttarakhand). But since demonetisation has affected everybody in the country, we were no different. And so, after budgeting for the trip, we withdrew enough cash and I was confident that there wouldn’t be any problem during the trip. I also wanted to see the effect of the post-demonetisation cashlessness in the remote Himalayan villages. How were villagers, farmers, transporters and common folk managing?


Mountain economy is a combination cash, exchange, and credit; Photo: Suresh Narayanan

The first surprise I got was when we reached the Himachal Tourism Hotel in KharaPathar. I have made a habit of staying in State Tourism hotels for the past 15 years now, mainly because in several locations, the tourism hotels are the best available accommodation. And from experience, I knew that most of these hotels deal only in cash (or strongly prefer to). But this time in KharaPathar they had a swipe machine, and the staff actually wanted the guests to pay by card. In Rohru also we paid by card. In Larot and Dodra, we stayed in Forest Guest houses and there we had to pay cash since there was no card machine.

During the entire trip I saw only one ATM open at Dhamwadi on our way to Dodra, and there was a long queue in front of it – as was the common sight in the cities also. On reaching Dodra we were sitting in the only Dhaba in that area and chatting to the local people regarding what they felt about the cash situation, and like everywhere else in the country, they also had mixed feelings. Most of the people we met supported this move by the government, while some were against it. The most common sentiment was “Kya farak padta hai, government kar rahi hai toh sabke bhale ke liye hi kar rahi hogi.” (How does it make a difference, if the government is doing it, it will be for the good of everybody).

I thought about this sentiment and I guess there are a couple of reasons why people in this part may seem less worried or more accepting about the situation than city people. Firstly, the people here are pretty self-sufficient or dependent mostly on nature for their daily needs. For instance, they get water from mountain streams, most of them grow their own food and use wood as the main source of fuel, and barter or exchange produce or craft for other needs. Secondly, for centuries they have followed a village leader or a chief or king and they just respect and trust that the leader or the king’s decisions to be for the greater good and that they will take care of the community. Thirdly, their options, needs, desires and demands are limited and hence they spend less money than people living in the cities.

We did come across some challenges due to demonetisation; for instance, in some cases, business has slowed down wherever there is a dependence on cash – merchants and farmers may find it harder to sell large quantities of commercial crops or fruits as easily since buying and selling in bigger markets in towns are done in cash. For instance, we met this lady who had several quintals of Rajma which she wanted to sell. We bought 8 kgs from her for cash. She wanted to sell more and asked us if we knew people who could buy Rajma from her. But this isn’t necessarily a pure-cash economy. Typically,  merchants come to towns and villages and cities as a matter of routine in September-October – since winter is approaching, they want to sell as much as possible before it snows and the roads close. Demonetisation hasn’t affected that much. The Apple season (which drives a significant portion of the economy) is already over and prices didn’t get affected by the demonetisation directly. Also, apart from sale for cash, merchants and farmers exchange their goods in exchange for other goods also. Which works well in these parts since even if they sell their produce for cash they will end up buying wheat flour or rice with that cash. It is also easier to exchange and save the costs incurred on transportation. For them cash money is not necessarily that important because they have their basic bare necessities.

One real challenge on the ground is related to old currency notes that people have from earlier – these are harder to exchange in remote mountains as places for exchange like banks and post offices are very far from homes.

Overall, though, the December trip was an eye-opener for me. I had expected that the worse effected areas would be the rural villages in the high mountains, but to my surprise I think they are in a better situation than the urban people including me.


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