Although there seem to be some good effects—such as decreased violence in Kashmir—demonetization has created such hardship throughout the country, especially on the poor, that it really needs a serious revision.

The reality is that India is still primarily a cash economy, and the average person—as well as the average small merchant or service provider—simply doesn’t have change for 2000 rupees. To cope, many people are bartering or buying on credit. Whoever came up with the idea that a 2000 rupee note was a reasonable replacement for the 1000 rupee note is seriously out of touch with the Indian economy. Wealthy people can buy their vegetables etc from fancy supermarkets that take credit or debit cards, but for people who buy their vegetables off a cart, there is no such option.

They should have replaced the 1000 rupee note with a note of the same size and denomination. Why they made it larger is a mystery, as it means all the ATMs have to be recalibrated. But I hope—I REALLY hope—that the ATMs will give the option to receive 2000 rupee notes or not. They just aren’t spendable for most people. Even 1000 rupee notes are frequently hard to spend. It would seem sensible to make them available at bank counters as an option for those who can use them. I certainly wouldn’t put them in village ATMs or anywhere that doesn’t have a lot of upscale homes and businesses, where almost no one would have any use for them. ATMs really should have options anyway about what denomination one gets. And they should have predominantly 100 and 500 rupee notes.

Many visitors to India are also suffering severe hardships. While a local resident could pretty easily run up a tab at a local tea stall or market, the same often wouldn’t apply to a foreign tourist, especially one who is on the move. Also, since the supply chain has been severely disrupted, it’s hard to obtain many items even if one is lucky enough to have the change to pay for them.

Many people are moving to places that accept card payments, which is a good idea if you can find one in your budget. Deciding to stay in one place for a while instead of continuing to travel can help for many of us. The guest house or hotel owner may agree to get paid at the end of your stay or every few days when the total you owe corresponds to what you have. If they have a restaurant, they may let you run up a tab, too.

Another good option is Airbnb, which takes PayPal. I have found many good places through them. You do have to read the listings very carefully, of course. Here’s an earlier post I did about finding a good place.

If you are staying in India for longer than a few weeks, but for less than six months, you can open a NRO bank account with a local bank, and fund the account by converting and depositing your foreign exchange or by a transfer of funds from your overseas account. You can transfer money from your home bank account for free from many countries, including the US, using ICICI Bank’s Money2India scheme. Other banks, including Axis Bank, have similar schemes. If you are on a tourist visa, supposedly you can only have the bank account as long as you have the visa.

Opening a bank account can be a real hassle, but it might be worth it in this instance. Bring your passport, a couple of photocopies of your passport and visa, 2 passport-size photos, and address proof. If possible, bring a reference from an account holder with the same bank along with a photocopy of their ID and address proof. Some banks may have other requirements. 

If you can get an Indian mobile number you can set up a mobile wallet like Paytm. However, they have to be funded from an Indian bank account.

How are you dealing with the chaos? Do you have any tips to share? Or are you just getting out of India as fast as you can?

Have you been able to get to ATMs to even make withdrawals?

Indian banks are supposed to waive the ATM charges, at least until the end of December. Are you finding that they are really doing this?

Thanks for your comments!










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