UP Elections 2017: A Village Of 1,000 Shares How It's Hunkered Down For Notes Ban

Bundelkhand: Raghunath, a 60-year-old farmer, surveys his two-acre farm in Bundelkhand with some concern. After four consecutive years of drought, the weather cooperated this year. Right after Diwali, he sowed the Rabi or winter crop of wheat, which now stands about two feet tall. On seeds, fertilizers, diesel for his water pump, he spent Rs 15,000. Then, on November 8, Prime Minister Narendra Modi announced that the highest-denomination notes were cancelled. Raghunath says that farmers like him were crushed.

"First, I stood in line (at the bank) to deposit my old notes. Then, when I wanted to take out money to sow the crop, I stood in line again. If I wanted Rs 2,000, I got just 1,000. I had to take many loans," he said.

Yesterday, Prime Minister Narendra Modi said that the timing of the notes ban was perfect - a move so drastic could only have been introduced when the economy was running strong, he said. But Raghunath's account reinforces the biggest criticisms of the demonetisation drive: that it whopped rural India, that farmers struggled to sow or maintain newly-planted fields, and that with cash running out, they were forced to take new loans at high interest rates from exploitative money-lenders, leaving them vulnerable to a new cycle of debt that the year's favourable monsoon had promised to ease.

Raghunath's village, Karenga, with 1,000 voters, lies in Bundelkhand, a region impoverished and susceptible to drought in Southern Uttar Pradesh. It will vote on February 23. Chief Minister Akhilesh Yadav at every election rally says "note-bandi (demonetisation) punished the poor. "Absolutely right," said Raghunath. Bundelkhand is not a stronghold for the Chief Minister. In the last state election in 2012, the region voted largely for his political rival Mayawati, though the rest of Uttar Pradesh over-whelmingly chose Mr Yadav's Samajwadi Party.

Karenga is also a village used to seeing young men depart every year for work to cities. Back-to-back drought meant that farming was a go-nowhere proposition; they moved away to find work as daily wagers. Now, they are returning. The notes ban meant that factories and construction sites ran dry of cash. Since the age of 15, Ram Singh has spent the bulk of every year working in faraway places. The 25-year-old returned from Chennai a month ago. The factory manager said he couldn't make any payments; Ram Singh is still owed half of his Rs 10,000 salary. Even so, both his mother and he believe note-bandi was the right call. "I will get my money sooner or later. He (the PM) did the right thing," said Ram Singh. His mother, Awadh Devi added, "Modi won't face any problems in the election. Money (cash) is coming back into the system."

Vijay Bhan Yadav, a contractor in the village, says demonetisation, intended partly to steer rural and urban India towards digital payments, has exempted the rich, who managed to launder their money, and chafed the poor. "Look at these boys," he says, pointing to five young boys he has hired, "you think I paid them by cheque for the last three months? You tell me, where is the black money? Modi said the problems will come down after a few days. I don't think they have."

In a calculation that sees it as a high-risk, high-return move, the PM and his party have placed demonetisation at the center of their campaign in Uttar Pradesh, a state which has not elected the BJP in 15 years. The result in the five states that are voting now will be seen not just as a verdict on note-bandi, but on the PM's popularity and the likelihood of a second term for him in 2019.