Reemergence of barter system in select locations in 5 Indian States..

Though politics is important but one wants to keep it away given how polarised economics discussions have become nowadays. Given the huge event one is just interested in learning about alternate monetary arrangements taking shape in different societies/regions across India. These are the kind of developments which are kept distant from any monetary economics textbook, but are so important to understanding evolution of money.

This article by GS Radhakrishna tells you about how people are going back to barter system in a few places due to no cash:

In the days following the demonetisation of high-value banknotes on November 9, the Adivasis and rural poor of Andhra Pradesh and Telangana have fallen back on bartering to tide over the cash crunch. They exchange their goats, chicken, pigs, calves, buffalo, honey, tamarind, forest millets, jackfruit and gum for essential goods.

The immediate aftermath of the cash withdrawal caused a quandary for poor people in the border districts of Srikakulam, Vizianagaram and Visakhapatnam in Andhra Pradesh and Bhadrachalam, Khammam, Warangal, Adilabad, Bhoopalapalli, Kothagudem and Karimnagar in Telangana. Their employers continued to pay them in old notes, which the markets refused to accept, and new currency notes were not easy to come by.

Farmers and contractors said they had good sreason to pay wages in demonetised Rs 500 notes. “We did not get smaller notes ourselves and had only old notes,” said G Mallikarjuna Reddy, a landlord in Chintur in East Godavari district of Andhra Pradesh.

In this situation, help came from the Annalu, or elder brothers, as members of the Communist Party of India (Maoists) are known in these parts. The Annalu put pressure on traders to adopt the barter system, and used muscle power wherever they met with resistance.

This became explicit on November 22, a fortnight after demonetisation, when a poster on the wall of a residential school in Bayyaram, in Kothagudem district of Telangana, asked traders and farmers to accept forest produce from the people in exchange for essential goods. It was signed by Sagar, the spokesman for the North Telangana Special Committee of the Communist Party of India (Maoists).

The switch to a barter system was not limited to just the two southern states. In Chhattisgarh, for instance, petrol pumps on the highway from Bastar to Jabalpur are accepting payments in kind for fuel. Sahadev Ikshu, a farmer, said he had used tamarind to pay for petrol for his scooter. Other communities in the state are reportedly using honey, tamarind, Mahua liquor and forest fodder as currency.

All this is fascinating to read.

In some regions we are seeing digital payments rising in lieu of cash and in others we see reemergence of barter systems..

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2 Responses to “Reemergence of barter system in select locations in 5 Indian States..”

  1. Reemergence of barter system in select locations in 5 Indian States via /r/economy | Chet Wang Says:

    […] Reemergence of barter system in select locations in 5 Indian States https://mostlyeconomics.wordpress.com/2017/01/18/reemergence-of-barter-system-in-select-locations-in… […]

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