The decision to discontinue key banknotes has had a disproportionate effect on the poor.
Lines formed around ATMs in Delhi and other major Indian cities on Friday as the deadline approached for people to deposit old banknotes or risk having their currency declared worthless.
The government is phasing out two of the most popular banknotes in India — the 500 and 1,000 rupee bills — as a measure to reduce corruption, encourage use of the banking system and curb tax avoidance.
However, the move has been heavily criticized as penalizing poor and rural communities, where the economy is overwhelmingly focused on cash. According to the BBC’s Divya Arya, the speed of the change and the lack of warning has also caused confusion.
“Every day we are trying to make sense of what this means," Arya says. "Cash forms such a crucial part of the economy.”
Plus, many ATMs were reported to have run out of new currency notes because of the demand for different denominations of cash.
The change in banknotes has had a disproportionate effect on poor women, whose access to the banking sector is particularly limited. Arya also points out that access to middle-class banking institutions is severely limited for disabled people.
“They have a very sad story to tell," Arya says. "They said that this government came to power saying, ‘Development for Everyone.’ And they said that in this exercise they felt completely left behind.”
In a speech last week, Prime Minister Narendra Modi defended the policy as the right choice to ensure India’s economic future: "We will not shy away from taking difficult decisions, if those decisions are in the interest of the country. Demonetization is an example. It has short-term pain, but will bring long-term gain.”