Indian prime minister Narendra Modi’s surprise announcement on 8 November that all ₹500 and ₹1,000 banknotes would immediately cease to be legal tender has sent shockwaves through the world’s seventh-largest economy.

The resulting rush to exchange the notes before 30 December has seen huge queues form outside banks (as many as 70 people are thought to have died), and a collapse in consumer confidence has already seen at least one music festival cancelled. With manufacturing, GDP and the stock market down, and analysts pessimistic on India’s immediate economic prospects, IQ spoke to several prominent promoters to discover how demonetisation has affected the Indian live industry.

“A lot of our business actually runs on cash,” says Varun Khare, general manager for Oranjuice Entertainment, who explains that while all the Mumbai (Bombay)-based promoter’s bookings go through the bank, spend on food and beverage (F&B) in India is still largely cash-based.

“People are not consuming F&B,” he tells IQ. “Eighty per cent of the cash in the country has been wiped out, so [F&B spend] has really taken a beating.”

Ajay Nair, chief financial officer at Only Much Louder (OML) – the promoter behind the NH7 Weekender, the latest edition of which takes place in Pune (Poona) from tomorrow, and, with Insomniac, the recently launched Electric Daisy Carnival (EDC) India – says his company is pushing F&B tokens online ahead of this weekend’s festival in response to the lack of available cash.

“We’ve had four or five promoters cancel because thought they couldn’t sell the tickets”

He admits they’ve needed “a bit of a push” – “people [in India] are used to buying tickets online, but not so much F&B”, he explains – but adds there will also be more card machines than usual on site for those who haven’t pre-bought tokens.

OML is also active in artist management, and Nair says it’s smaller shows that have been most affected by demonetisation, with local promoters concerned about their ability to sell tickets on the door. “We’ve had cancellations for some of the artists we look after,” he says. “Lower down the chain – at $3–$4 shows – we’ve had four or five promoters cancel because thought they couldn’t sell the tickets.”

Red Entertainment director Reema Gupta says demonetisation has had a visible affect on Mumbai’s nightlife. “People have stopped spending on luxuries,” she explains. “Mumbai is one of the most happening cities in India, but even at the weekend the clubs here aren’t full.”

‘Macha’, or folk dance, shows have also reportedly been badly affected, with The Times of India reporting that “as many as 10 lakh [one million] families of Bengal involved with macha shows have been affected by demonetisation”.

“No one organises macha shows by paying in cheque,” macha show organiser Atanu Sarkar tells the Times. “Traditionally, all donations to host shows are done in cash. Now, all shows have been cancelled until February.”

“It’s going to completely change how people pay for things”

In addition to macha shows, Gupta says the lack of currency is mainly affecting smaller, not-for-profit events, such as weddings. “In India, it’s not always possible to [book shows] with bank transfers,” she says. “Sometimes you have to do cash payments, and at the moment you can only withdraw a certain amount.”

Nair estimates EDC was down between 1,000 and 1,500 people per day as a result of the shortage in cash. He says around 90% of attendees booked in advance online, “but what was affected was on-the-day tickets”. There will, however, he says, be only a “marginal impact” on the NH7 Weekender – for example, “students, who may not have [debit] cards, will not be able to come…”

Despite the challenges posed by demonetisation, Khare says the move will “definitely be a good thing in the long term”, helping to usher in Modi’s vision of India as a cashless society – something Gupta says is already becoming apparent in Mumbai, where many shops have recently invested in card machines. “It’s going to completely change how people pay for things,” says Khare,

Looking ahead to a largely cash-free NH7 Weekender, Nair, meanwhile, is hoping the majority of festivalgoers are aware enough of the situation to make sure they use up their F&B tokens. “We always offer refunds,” he says. “But I’ve got no idea how we’re going to manage it this year!”

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Riders Music Festival, a new music and food festival for India’s biker community, has become the first victim of the chaos surrounding prime minister Narendra Modi’s decision to demonetise all ₹500 and ₹1,000 banknotes.

The festival has been postponed due to “the current economic environment in the country due to demonetisation”, a statement says.

Nisha Narayanan, COO of festival promoter Red FM, tells the IANS news agency: “We felt postponing [the festival is] a wise decision and very fair to both listeners and from a business standpoint.”

She adds: “Due to demonetisation, businesses across sectors have been impacted. The more organised retail sector, which holds a big chunk of radio advertising, has also been hit by demonetisation, with people spending only on necessities.”

“People are spending only on necessities”

Announced on 8 November, the demonetisation is designed to stop counterfeiting of the current high-denomination notes, which Modi alleges funds terrorism, by taking them out of the circulation. The notes will cease to be legal tender on 30 December.

The aftermath of the move has seen huge queues outside banks as Indians race to exchange the notes for smaller denominations, as well as a sharp drop in consumer confidence and the value of Indian stock market. More than 70 people are believed to have died since the 8th in demonetisation-related violence.

Modi has so far refused to address the Indian parliament to discuss the fall-out. Indian National Congress vice-president Rahul Gandhi asked yesterday why, “if the PM can speak on TV, at pop concerts” [the Coldplay-headlined Global Citizen festival], “why not in parliament?”.

New dates for the first Riders, which was to have taken place from 3 to 4 December at Jawaharlal Nehru Stadium (100,000-cap.) in New Delhi, will be announced soon.

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