KOLKATA: Tens of thousands of people joined nationwide protests on Monday against India’s ban on high-value banknotes, which organisers say has caused a “financial emergency” in the country that operates almost entirely on cash.

India is still reeling from Prime Minister Narendra Modi’s shock decision nearly three weeks ago to pull 86 per cent 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 have warned that it could hit growth hard.

Around 25,000 people took to the streets of Kolkata, capital of West Bengal, whose Chief Minister Mamata Banerjee has warned of “riots and epidemics” if the ban continues.

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 told AFP, urging the government to reverse the move.

An estimated 6,000 rallied in Mumbai, 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 Rs500 and Rs1,000 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 demand and economists say the ensuing cash crunch will hit growth.

Former prime minister Manmohan Singh, a respected economist, said last week it would shave at least two percentage points off growth, which topped 7pc in the first half of the financial year.

Published in Dawn, November 29th, 2016