India’s shock currency shift drives farmer to suicide

Woman thought stash of cash from recent land sale had become worthless after 500 and 1,000-rupee notes were withdrawn.

New Delhi // A farmer in southern India has committed suicide over the government’s sudden withdrawal of high denomination currency from circulation, fearing that she would be left penniless.

Kandukuri Vinoda, 55, had a large amount of cash in 1,000 and 500-rupee notes at her home in Mahabubabad district, east of Hyderabad city, and believed that her savings had become worthless after hearing prime minister Narendra Modi’s surprise announcement on Tuesday.

“The family told us she panicked after hearing about the note ban and hanged herself at her home,” a local police officer said.

Vinoda had sold some land last month and was paid about 5.5 million rupees (Dh304,000) for it in cash.

She used some of the money to pay her husband’s medical bills and planned to use the rest to buy a new plot of land, local media reported.

Many Indians in rural areas keep large amounts of cash at home because of a lack of banks in remote areas and to avoid paying taxes.

The withdrawal of the high-denomination notes is part of Mr Modi’s campaign against corruption and “black money” – undeclared wealth – and the government has tried to reassure citizens that the move will affect only tax dodgers.

Police in northern Uttar Pradesh state said they were investigating reports that people were burning off sacks of notes to avoid declaring them and being handed heavy penalities.

“We have sent the samples for forensic tests and asked bank authorities to authenticate these are currency notes,” said Joginder Singh, police chief of Bareilly district.

Earlier this year, the government ran a four-month tax amnesty, which saw Indians declare nearly Dh36.7 billion in hidden wealth.

But the scheme ended last month and anyone now depositing large amounts of cash could face a bill of up to 200 per cent in back taxes.

* Agence France-Presse