Demonetisation has missed its target

Rasheeda Bhagat | Updated on January 15, 2018


The currency crisis has hit ordinary folk, while the big fish are sitting pretty

The sudden and swift demonetisation move that caught everybody napping and has swept across India in the last 10 days, has left the nation deeply divided. But leaving aside its shortfalls, such as poor planning and execution, the one big surprise it has thrown up is that Indians can stand in orderly queues for long hours.

Whether at airport boarding gates or bus stops or railway stations, we Indians normally move in waves or bunches, and not queues. But over the last 10 days, as lakhs of Indians poured out to deposit their old ₹1,000 and ₹500 notes, or exchange them for new ones, it was striking to note people patiently waiting in queues to change their currency.

Coming to the decision itself, ushered in as we learnt from Prime Minister Narendra Modi, to root out black money, eliminate fake notes and crush terror financing, the instant reaction of the salaried classes was one of jubilation. For long years, as a salaried worker in the TDS category, it has been painful to watch businessmen, industrialists earning several fold more, paying a fraction of the taxes I pay. Add to this corrupt politicians and bureaucrats amassing huge wealth in the form of multiple homes, and other assets, and you can’t help cursing the system that allows such disparities.

Faulty execution

But when reality sank in that black money, particularly by the big fish, is not stacked in mattresses, but tucked away in multiple offshore holdings, foreign bank accounts, bullion, foreign currency, the move lost its sheen. When the banks and ATMs opened for business there was panic all around. For convenience, all Indians, rich and poor, hold cash in larger denominations for daily use and exigencies. As serpentine queues piled up before ATMs and banks that soon ran out of cash, both frustration and anger set in. The worst flaw of the scheme was that for well after a week of the announcement, new ₹500 notes were not available even in metros. Sticking ₹2,000 notes in the hands of citizens was no good as change was impossible to get. It is easy to talk about plastic money but how many Indians have credit cards?

For instance, your housemaid and mine, whose husbands maybe daily wage or blue collar workers in shops and offices, don’t have credit cards. She goes to the local grocer to buy a quarter kg of tomatoes, half a kg of onions or 200 gm of mutton/chicken. Do the places they buy their food from accept credit cards; is their average spend ₹2,000?

If these people in our metros were trapped by the demonetisation move, imagine the plight in India’s hinterland, where it is not only superfluous, but cruel to talk about the need to usher in a cashless economy. Let's not forget that only 27 per cent of Indian villages have a bank in a radius of 5 km. Now think of the truck driver who eats in the roadside dhaba, the farmer, the agri labourer, the potti kadai owner in tens of thousands of Indian villages — the list is endless. All of them are in distress.

Opposition fury

The Opposition has of course launched a scathing attack on the Government for bringing in a poorly thought-out scheme with shoddy execution. We can chuckle at their discomfiture knowing well the important role hard cash plays in our elections — from buying votes before the elections to buying legislators after it! Opinions, both for and against demonetisation, are flying thick and fast. Parliament has been stalled, and will continue to be stalled by the Opposition. Meanwhile the quest for cash continues and gross misuse of blue collar workers made to line up to exchange money for their bosses has been reported. Hence the need for indelible ink.

We may debate till the cows come home why adequate stacks of new currency were not moved right from Day 1 to instil confidence that our hard earned money was safe and could be exchanged easily. Or why ATMs were not recalibrated to accept ₹2,000 notes; after all everybody knew the ₹2,000 note was on the anvil.

What is amazing and restores faith in the Indian democracy is that law and order has been maintained; barring very few instances, no large-scale looting of food or medicines has been reported. But along with this positive, the pain and suffering of the sick who could not get timely treatment, or the lives lost in long queues will not be forgotten for a long time.

Published on November 21, 2016

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