Since 8 November 8, seven persons have died;3 in Kerala, 1 in Andhra, 1 in Bengal and 2 in Maharasthra, which are related to the demonetisation, either while standing in queue to exchange old notes or for not understanding the issue properly and in frustration resorted to taking their lives. These are the martyrs to black money. Will Narendra Modi and his government pay their families compensation for the sacrifice? One would presume that Modi had not anticipated this kind of outcome from his resolve to wage war on black money.
There has been absolute chaos all across India since November 10. No spendable cash in the hands of the people has become acute which is affecting people’s daily lives because of their inability to purchase necessities. The poor are the hardest hit since their lack of literacy confuses their understanding of the procedure to go through the process of understanding this demonetisation. Trade and commerce has been hit because with no cash, customers are not coming in. This has affected perishable food items like fruits, vegetables, meat and fish which are rotting in some parts of the country. With the supply of new currency notes of Rs 500 and Rs 2000 denomination not improving there is no end in sight of the chaos for at least another week.
In all this uncertainty, there is also black humour with PM Narendra Modi addressing an Indian audience there which must be Indians settled there, journalists whom he flew out on his plane and Indian Embassy staff who applauded when Modi said that the aam admi is with him on his adventure to eradicate black money! Unfortunately Modi and his Finance Minister Arun Jaitley are not on the same page since the latter has been trying to talk down the chaos of the aam admi at banks around the country by saying that there is no need to rush and people have time till Dec 31 to exchange the demonetised notes. He was also trying to reassure that the people’s money is safe with the banks. Here again Jaitley is partially missing the point since people are not worried about losing their money but they are rushing to the bank for valid cash to be used to buy daily necessities.
Even in this when they go to the bank they are being given the new Rs 2000 note which does not solve their problem since the Rs 500 is not available. The Rs 500 note has become the note of choice with the high inflation prevailing. It is understood from news reports quoting RBI sources that the demonetisation exercise was to be done in the New Year – 2017 when both the new Rs 2000 and Rs 500 were to become available in adequate numbers. If so why was the demonetisation brought forward to Nov 8? There are no answers to these questions. If the new Rs 500 note had been available then a large part of the chaos would have been contained. Thus when people present the new Rs 2000 for purchases there would have been easier options to give people change. Now the situation is the next denomination after Rs 2000 is the Rs 100 and that too is not available in large numbers compelling the RBI to fall back and release soiled Rs 100 notes into the market. We have to ask which mathematical genius suggested to the PM to go ahead with the demonetisation with just the Rs 2000 note knowing the supplies of the new Rs 500 note was slack. There is another subtle market pattern that comes to play in this context since if purchases are not close to Rs. 2000 the seller can claim lack of change available and thus force the buyer to buy more. And slowly the sellers will jack up their prices of almost all items except for the labelled MRP items to take advantage of the short supply of change in the market. So much for containing inflation. The way this whole thing has been mismanaged India’s reputation as an economic power has taken a beating and we are equated to any country in Africa and South America.
Jaitley has only now realised in a statement that he has made that 87% of the currency in circulation comprising of the Rs 500 and Rs 1000 notes to be replaced is a huge logistical exercise. Why, did he not assess this problem earlier? If the new Rs 500 note was likely to be delayed, why was the demonetisation exercise not pushed back until both the Rs 500 and Rs 2000 notes were available in sufficient volume.
Similar lack of the attention to detail can be seen in ATM operation since conflicting reports were being given. The ATMs were to start working on Friday, Nov 11, which did not happen in many parts of the country. Even on Nov 12, when some ATMs started functioning, they ran out of cash very quickly. The ATMs were also dispensing only Rs 100 notes which was a good thing but considering that a limit had been set to Rs 2000 for each person/ bank account, they would not make a material difference in reducing the chaos for currency at the banks. It is also reported that some 40,000 ATMs out of 150,000 will not work since their software licensing arrangement with a US Co. has expired and it will take a while for this agreement to be renewed. Once again Jaitley has made a statement that the ATMs will have to be physically modified to handle the new Rs 500 & Rs 2000 notes and/or the Rs 50 note. And this will take another 2-3 weeks. Was all this not known to Jaitley and the RBI and if so did they deliberately go ahead with the demonetisation exercise consistently bluffing the public that the ATMs would function from Nov.11 onwards? This is rather bad that you say that you are doing this demonetisation exercise for eliminating black money for the benefit of the public and in that process continue to fool them. Thus you will see for the ATMs to work it will take a little more time. How much? No one is aware!
To put matters in perspective and for the information of PM Narendra Modi and his team who are leading the demonetisation exercise, the aam admi is not against the demonetisation exercise and the fight against black money but only wished that it had been done better and that the authorities had taken the common public into confidence which would have eased their anxiety and allowed them to go about their humdrum life quietly and without bother.
