Faulty planning affects millions
Normal life for millions in the country has been thrown out of gear ever since the Prime Minister Narendra Modi‘s dramatic decision to declare the extant high denomination currencies of Rs 1000 and Rs 500, the latter widely used by all for meeting daily expenses, would no longer be legal tender. Genuine holders of these notes need to exchange them within a set time limit. He has not really demonetised these notes as they are bound to return with new security features and in new series before long since the intent was only to remove the existing notes in flow and in stocks to be consigned to the waste paper heap as their value was not worth the paper on which they were colorfully printed!
No one can fault the savvy Modi for his implacable onslaught of black money, corruption, fake and counterfeit currencies of high denomination funnelling their way into terror- funding or the drug menace and subversive activities that seemed to stalk starkly in select cities of the urban India. Modi’s sudden decision had dealt a severe blow to users of cash, even as it is in no way blocking or bothering users of credit or debit cards, online money transfers through NEFT or mobile wallet applications the upwardly mobile Indians and status-conscious tiny minority have adopted. In a country with a meager per capita income but a rising middle-class population estimated to be 300 million plus, most of which remain wary of the use of online financial dealings lest they should be defrauded by cyber criminals on the prowl, the use of cash continues to hold attraction both for the older generation, the numbers of whom are not inconsiderable and the average middle-class family subsisting on salaried income to disburse payments for day-to-day living.
Those who have been using their automatic teller machine (ATM) cards till the other day with no hassles now find the machines not in operation virtually for days on end after the announcement with the Finance Minister Arun Jaitley conceding, after four days of the monetary blitzkrieg, that the recalibration required for over two lakh ATMs across the nation to dispense the brand new Rs 500 and Rs 1000 notes as legal tender would entail another two to three weeks! Even the incremental improvements he had injected on November 13 by raising limits on exchange and from ATM modestly will not make matters a tad comfortable for people. It is another unedifying story that most of the ATMs even till November 8 were dispensing only high-denomination notes such as Rs 500 and Rs 1000 even if one withdrew less than Rs 4000/- for the convenience of stocks and disposal.
It is small wonder people who exchanged their existing old currencies for other denomination notes got one Rs 2000 brand new note and the balance for Rs 2000 in multiples of hundreds. When there is a universal shortage of notes of lesser denominations, how can the ordinary people exchange their Rs 2000 note to use for their week-long consumption needs? The banks should have been told to dispense new brand of Rs 500 notes, instead of Rs 2000 at one –go, but banks do not have the new Rs 500 note to give for quite a few days. Till normalcy is restored with the facile functioning of the ATMs in another three weeks, getting change for high-denomination Rs 2000 note would be a gargantuan task for all. People are ready to bear the discomfort of standing in the queue for long hours, forsaking their other pressing commitments of the day, provided at the end of the day they get relieved that they have currencies of lower denominations on hand to spend without getting short-changed or harassed at the various purchase places such as grocery shops or small vendors. It needs to be reckoned that notwithstanding the inroads of plastics, 98 percent of all consumer transactions in the country still supervenes in hard cash. If the authorities had enhanced the circulation of Rs 100 notes in the system for the past couple of months, the transition would not have cost the travails and agonies as it had done and is still doing today to millions across the country.
As if the torture for the exchange of extant notes with new or lower denominations is not sufficed, those who went to banks to withdraw their cash found difficulty as they have to wait out for unusually long time and after fulfilling formalities like establishing identity with a photocopy of identity proof to get the relief in the form of hard cash on hand! People will not be enthusiastic for this sort of harassment if the preparatory work in the run-up to the major move as the one the Prime Minister undertook and promised to do more in the future, were not done meticulously and with least hardship to ordinary people who have faith in the banking system. If the authorities’ intention is to ingrain the culture of financial literacy and promote financial inclusion, any draconian decision that upsets the apple cart in their daily dealings with the system would ill-serve the exchequer.
It is against this anguish on the ground visibly experienced by all sections that the major political parties such as Congress, Trinamool Congress and Left parties and important regional parties felt compelled to articulate their concerns to reflect the vexatious voice of the people. To brand such parties as irresponsible and have an axe to grind in thwarting the move is to be intolerant of opposite spectrum of opinion. If only the authorities have factored in the logistics nightmare, such a decision will cast on the banking industry with its staff overworked and exhausted by extended hours of stay and first weekend holidays cut and the consequent silent resentment and rancour for long hours standing in the queue among millions on the streets would have been averted. To mistake people’s stoic silence on the mental torment they undergo in getting their money from the banks, the institution they blindly put their faith in is to risk losing their goodwill by design if not by default.
To be fair to the authorities, the Modi government’s latest move on the black money front may help identify counterfeit or fake currencies that were in circulation if they came for exchange or got deposited in the banking system. Terror financing usually does not take place in hard cash as these nefarious elements deploy other tech-savvy techniques or use digital transfers as widely documented. To fight corruption or fake currency to launch this drastic move would be like a mountain laboured to get the birth of a mouse as the concomitant disruption to normal life across the country, both in urban and in rural areas, would be too inconvenient to be ignored.
Unless the authorities mount a resolute battle against cash transaction-ridden segments like real estate, construction industry, jewellery trade and on professionals such as accountants, lawyers and doctors who get paid only in cash and do not give any receipt for their own tax evasive purposes, the tilting of windmills may yield at best derisory results but pile up problems for the rest of all honest taxpayers.
(Views expressed are strictly personal.)