There is no let up to the demonetization conundrum initiated by the BJP Govt., abruptly by scrapping the old purportedly high denomination notes of 500 and 1000 to weed out black money and counterfeiting, without proper planning, execution and implementation making the hapless common man running to the ATMs which have run out of cash and banks facing money supply crunch. It is common knowledge that calibration of ATM cassettes for dispensing new denomination notes should have been a prerequisite to demonetization. Serpentine queues at both nationalized and private banks are seen with people jostling for space for withdrawing their own hard earned money. Periodically announcements are made by the Centre to bear with the hardship for a couple of days but now it is more than 20 days and things have not improved at the ground level with most ATMs downing their shutters and putting the hapless people to untold inconvenience.
Amidst all this crisis and chaos, there appears to be a silver lining as is evident from the outpouring of support by the social, print & electronic media for this bold step to eradicate the menace of black money which is eating into the very vitals of the Indian economy. There are reports doing the rounds that the exquisite paper imported by the country for making currency notes has been compromised by the outsourcing agencies by also supplying the same to Pakistan who in turn has churned out trillion of Indian currency and made available through conduits in Nepal, Bangladesh, etc.
The aftershocks of the demonetization of 8 November are obviously still reverberating, as there is still a lot of pain for the average citizen. Even if you ignore motivated breast-beating from the usual suspects, which can be discounted, it is likely that many at the bottom of the pyramid are suffering from the liquidity crunch. Much activity has been disrupted, but it is still likely that a majority supports the laudable aims behind the move, even though the implementation could have been a lot smoother, especially if there had been a focus on Rs 100 notes, rather than the relatively hard-to-handle Rs 2,000 notes. This tolerance of the Indian public is a wonder, but it is beginning to come to an end, as a young and aggressive population is beginning to ask why it is that every country is bypassing us. And then comes Prime Minister Narendra Modi with an appeal to the public, going over the heads of the gatekeeper media: he acknowledges that there will be pain. But he asks them to suffer the pain for just 50 days, and by and large, the public is responding.
If you put all these in perspective, it is a revolution, and a disruption and a point of inflection which marks the beginning of something big.
Corruption and black money will never go away entirely. They will be with us always, like death and taxes. But their effect on the real economy can be reduced. And that would also lead to a reduction in the power of politicians to act in arbitrary ways: whatever they do would lead to an audit trail in the money flow. An analogy is the railway reservation system: the moment it was automated, the entire class of intermediary touts disappeared, because frankly, people are scared of what computers may know about them.
Thus, I believe the Prime Minister can pull this gargantuan effort off, with our support. He has no choice, really: this is one of those things where you can’t make a graceful U-turn; the train is moving, and you can’t stop it or get off it. And given his character, once he makes up his mind, it is unlikely he’ll change it. Thus, like it or not, demonetization is a reality, and although we will not know the full results for a while, I think it is a tremendous step forward, coupled with the other steps. There will be pain: GDP may shrink by as much as a percentage point.
At a time when China is slowing, and many are nervous about Donald Trump’s intentions, this move by India could not be more brave or intrepid. It is a risk-the-mandate bet, and it is believed, it may work, and that it is the beginning of a new, cleaner, more assertive India.
