Demonetisation – Good or Bad?

A long time ago, there was a king. Here is what was said about him:

He had been a man of controversies and crisis, he faced worst attacks of Mongols, He experimented to shift his capital from Delhi to Daulatabad that was disastrous decision which cost millions of tankas and thousands of lives. He was careless, sometimes insane and sometimes acted like a real hero and leader. Critics has called him hasty in nature, owing to most of his experiments getting failed because lack of preparation. Ibn Batuta has also written that he depended on his own judgement and rarely took advice from others . . . .”

Almost three weeks back, we heard that deadly announcement by our beloved Prime Minister that the existing currency of ₹500 and ₹1,000 were not valid anymore except for depositing in bank. At that moment I was at a restaurant with office colleagues and wondering how do we get some immediate currency in ₹100 notes to meet cash expenses. As expected, the little quantity of ₹100 currency available at the ATMs got exhausted no sooner than the announcement came, and I had to come home empty handed.

Back at home, I pulled together ₹100 notes from my wife and myself to about ₹800 and thought this was adequate for next two three days by which time banks would replenish the ATMs with ₹100 notes adequately and that the mad rush by citizens would end what with the announcement of ATMs being closed for next day. I wasn’t in a hurry. Little did I know this was to go on for three more weeks by which time, bankers officers association member would announce the shortage would continue for five more months. That is, at the minimum!

    What was going on in the king’s mind? Did he think it is not a big deal if 130 crore people suffer? Or did he think it was not necessary to take too many inputs from beaurecrats and he could rationalize somehow the problem may not in reality be as worse as some of his beaurecrats would have told him?

    Pat comes the announcement though that old currency would still be accepted at petrol pumps. At least he understood that today fossil fuels run government finance, not income tax! Silver lining yet was, at banks one could deposit any amount of money and also  exchange upto ₹4,500. With the weekend approaching, I assumed that as a preferred customer my bank would help me deposit the small amount of currency that I had at home to be deposited and also allow exchange of old to new for the said ₹4,500. The banker never returned the promised telephone call to make it easy for me do the transaction. So much for service by a reputed private bank for its ‘preferred’ customer tagged! I waited in queue during my late night walks and withdrew some amount hoping the rush will reduce in two or three days. Sorry! That wasn’t to happen even for weeks!!

    And then comes the announcement new currency could be exchanged at petrol pumps with f least 2,500 of them already authorised. With a large and reputed public sector petrol pump being next to my home, I thought I will have this privilege. Nope. Haven’t heard anyone exchanging old currency at petrol pumps. And then another announcement that banks will now be allowed to give only upto ₹2,500 towards withdrawals.And then one more annoucement that from now on other than for depositing in banks, old currency of ₹1,000 are not valid anymore! So now I can’t use the currency at petrol pumps either. How many more announcements are we going to see on a daily basis, and how long? Has there been any planning at all for this mammoth exercise. As a living project manager, I am aware with the best of our efforts things can go wrong and not executed per plan. But not so many changes so often that it becomes a running plan. Even so when working with 130 crore people! 

    But to top up the fun if there is any in here, there are rumours around gold control, land control and what not. The common man finds ethical, sensible solutions of making on-account transactions, barter system of buying groceries and vegetables in exchange of rice, introducing tokens for ₹5 and₹10, using online purchases even if this sometimes meant higher prices, and what not?  There is a drop in vegetables prices to an unbelievable half. Why? Because the poor vendors are desperate to make some money. Any money so they could feed their family.

    And while all this happening at common man’s end dotted with a few palpable jokes on WhatsApp, he gets to hear:

    • The whole exercise was in planning by government for six months
    • Many influential people be it politicians or businessmen already knew this well in advance
    • There have been established reports of very large increases in bank deposits in couple of weeks prior to the annoucement
    • No one understood why a larger denomination ₹2,000 was required which many believe will only allow creation of black money at a faster pace this time 

    There is no improvement in availability of currency notes yet. Be it at ATMs or banks or to talk the least of, at petrol pumps. And here comes another announcement that ₹1,000 can be exchanged only at RBI counters! As if they are better at administering this than banks. Of the twenty four or so ATMs that I pass by during my late night walks, I barely see two ATMs open and those too with heavy queues. For now I cannot but notice the immense amount of advertising and hoardings the Prime Minister being displayed everywhere at God knows whatever expense of tax payers money!

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    The target is that 1% population who hold more wealth than 99% of Indian population. But out of this take away those politicians, businessmen and umpteen number of beaurecrats who knew of this operation. Are we really going to be benefited? Which way? Will we see reduction in income taxes for the common man? Will we see reduction in excise, customs duties or sales, service taxes from the poor? Or would we see an increase in income tax from that 1% of wealthiest that will result in development projects – Old and New? Can we say for sure at least now that this Two Trillion Dollar economy country will no longer have starvation deaths? When? 

    Suggestions 

    The step taken by the honourable Prime Minister is perhaps a good one provided it is executed properly. I think while we may not be able to eliminate entirely, the best way of minimising black money is to digitise everything. The Prime Minister is already advocating this. A lot of this work had already been initiated earlier through various schemes. The question that comes back again though is, without completing those actions why did he try to implement something in a haste that resulted in this chaos? A few policies I can think of to investigate further:

    1. Identify one number that will remain unique to each individual in India. This could be Adhaar Card, PAN, phone number or whatever.
    2. Providing this number should become mandatory virtually for everything, be it for opening bank account, getting cooking connection, getting a passport, pay sales tax, income tax, service tax, excuse duty, take loans, register automobile, buy real estate, etc.
    3. The unique number created as above should be linked to one bank account mandatorily.
    4. All transactions beyond certain value should be mandated through digital financial transaction only or they don’t get to complete their business transaction.
    5. System of transfer of funds and transacting should be made much easier such as through Payment Banking now launched by Airtel. This will allow the most illiterate to be able to use digital transactions easy. And if we were late in implementing this, at least the high volume transactions would have been addressed through digitisation.

    Until then, I can only ask for reading of the first passage again as it relates to our Prime Minister and give out the name of the king at the end, for your curiosity!

    He had been a man of controversies and crisis, he faced worst attacks of Mongols, He experimented to shift his capital from Delhi to Daulatabad that was disastrous decision which cost millions of tankas and thousands of lives. He was careless, sometimes insane and sometimes acted like a real hero and leader. Critics has called him hasty in nature, owing to most of his experiments getting failed because lack of preparation. Ibn Batuta has also written that he depended on his own judgement and rarely took advice from others . . . .”

    The quote is from Wikipedia. And the famous king was Mohammed Bin Tughlaq. 

    My own personal view is to support this exercise if it really benefits me or the poor. Question is, will it? 

    What is your view? Please share.

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    3 thoughts on “Demonetisation – Good or Bad?

    1. Surprised to see this act tagged to Tughlaq actions. We surrender ourselves to innocence – that is natural law. We go to doctor, Lawyer etc because we don’t have expertise in that area and take their advise and guidance. Similarly here I don’t have expertise to the level I can deep dive and analyze, but have strong belief on Successful leaders supporting this like Bill Gates etc So I go with their views – Proven leaders + some facts. How come issues in Kashmir calmed as of now – that itself is great achievement and if that is because of this act.
      Next change happened, can’t be reversed now and don’t see any indications that it would be reversed. Let’s wish the change is for the betterment of the society at large – universal level. 200% agree to the fact, post the decision the change management principles should have been adopted in much much better way, no doubt in that.
      Till date in last 2 years we have seen many acts from this PM – Can we tag them as Tughlaq actions – building a strong brand for India, Making Yoga as International Day, Globally strong relationships across the world, recognized as powerful-leader by many.
      Scenarios linked to Cafeteria, groceries etc impacting to personal side and reacting to that Is that not emotional ? and just thinking to ones own personal actions and inconvenience. Being in this country for so many years and knowing our people don’t we think unless there is some hard decisions taken at Top level things wont’ change so easily. Now we are seeing trend and shift in few sections moving to cashless transactions.
      Hoping for the best and Wishing all good to this humanity in the long run, I support.

      Like

      1. Rama, what the post was not about the action of scrapping notes but the number of times new notifications coming up and some changing the previous ones. Lie I said, making a mistake is not unpardonable but my blog is about how many times we keep hearing new guidelines and news? At least one should make course corrections.

        Liked by 1 person

        1. For me I see the issue not having many Modi’s only one person depending on others and his intentions are right, but the supportive team Intellectual levels to be Qs
          Even I sent a Tweet to Modi on 15Nov, mentioning failed on managing change management process post the decision

          Liked by 1 person

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