Entire India simmers with anti-Modi protests

Currency crisis deepens; riots, rumpus in major cities, including New Delhi; businesses come to a grinding halt; people stage sit-in at parliament; train service suspended; thousands take to streets

KOLKATA: Tens of thousands of people joined nationwide protests on Monday against Indian Prime Minister Narendra Modi as the currency crisis deepened.

It is reported that protests turned ugly in many cities including New Delhi, which witnessed riots and rumpus as the train service was suspended.The people agitated against the ban on high-value banknotes, which organisers said had caused a “financial emergency” in the country.

India is still reeling from Prime Minister Narendra Modi’s shocking decision nearly three weeks ago to pull 86 percent of the currency from circulation overnight, triggering a chronic shortage of cash.

Many ordinary Indians say they support the scheme if it forces the rich to pay their taxes by making them bank undeclared income, but economists had warned it could hit growth hard.

Around 25,000 people took to the streets of the eastern city of Kolkata, capital of West Bengal state, whose left-wing Chief Minister Mamata Banerjee warned of “riots and epidemics” if the ban continued.Protester Sumit Sen said he had been forced to close his grocery shop after business slowed to a trickle.

“Running my grocery shop became impossible,” the 45-year-old said, urging the government to reverse the move.An estimated 6,000 rallied in Mumbai, Indian western commercial hub, police said.

“We are protesting against the undeclared financial emergency imposed by the government and the hardships people across the country are facing because of this illegal decision,” said Manish Tiwari of the opposition Congress party.

“The decision to demonetise high-value currency was done without any authority and legislation and is clearly illegal.”Owners of the banned 500 and 1,000 rupee notes have until the end of the year to deposit them in a bank, and can only directly exchange a small number for new currency.

But authorities have struggled to print enough new notes to meet the demand and economists say the ensuing cash crunch will hit growth.Former prime minister Manmohan Singh, an economist, said last week it would shave at least two percentage points off growth, which topped seven percent in the first half of the financial year.

“I do not disagree with the objectives but it is a monumental case of mismanagement,” the Congress party lawmaker told parliament.“The way demonetisation has been implemented, it will hurt agricultural growth and all those people working in the informal sector.”

Over 90 percent of transactions in India are conducted inpoorest have no access to banking. Many have been left without enough cash to buy food or daily essentials, while farmers have been unable to buy seeds and small traders say business has fallen off a cliff.

Nonetheless Modi has repeatedly defended the scheme, accusing its detractors of being tax evaders and urging all Indians to switch to non-cash payment methods. On Monday the government proposed introducing a penalty of 85 percent for anyone caught with undeclared money, but said it would charge anyone who comes forward voluntarily a lower rate of 50 percent.

Parliament has yet to approve the proposal, which is contained in an amendment to the existing tax laws. The opposition parties say the move was mishandled.

Last week, they stalled parliament and demanded Mr Modi should apologise for the decision. Correspondents say it is unclear how much public momentum a day of protests will generate as many Indians have supported the move, despite the inconvenience it has caused them.

Most opposition parties said they would participate in the so-called "day of rage". But a number of important regional leaders - like the chief ministers of Bihar and Orissa - refused to back the protests, saying Mr Modi's attempts to curb corruption should be welcomed.

Protest rallies have been held in the cities of Lucknow, Kolkata and Bangalore. The southern state of Kerala and the eastern state of Tripura, both ruled by the Communists, saw a near total shutdown. In his first national address since the government banned the notes, Mr Modi called for people to embrace digital payments and use less cash.