By government’s own admission, the country has been very slow in accepting the idea of cashless or plastic economy. Its wide use is not possible in the present conditions. No vegetable seller or any other street vendor or petty shopkeeper will accept payment by debit or credit card.
Belonging as Modi does to a party that puts high premium on ‘Indian culture”, it is surprising that he has not taken into account an Indian tradition that has continued for generations and centuries, which is to save whatever cash a family can for ‘rainy days’. This could be to meet a social obligation (wedding etc), paying medical bills or buying provisions when family income is suddenly cut off or is reduced considerably.
The amount held by families will, of course, vary. The very poor may not be able to ‘save’ anything, but the slightly better off and the middle classes continue with the tradition of ‘saving for the rainy days’. It is this section of the society, fairly large and vocal, that has been hit very hard, not the rich and opposition politicians who arrive at banks in ‘luxury’ cars to exchange the dud currency. This kind of lampooning of political adversaries is counter-productive. Does Modi have to stand in chaotic lines for hours to jostle with the ordinary citizens trying desperately to reach the bank counter?
Newspapers have noted that the Rs 500 note is the widest circulated currency note in our economy today. Together, the Rs 500 and the other now ‘illegal’ currency note of Rs 1000 constituted about 85 per cent of the currency in circulation. It is highly unlikely that only the people with black money or unaccounted money have been dealing in these two high denomination notes. Clearly, the ban on Rs 500 (and Rs 1000) notes has hurt most Indians, including the poor ones who live on daily wages or by doing odd jobs.
It would not have required a midnight review meeting by senior bureaucrats and the prime ministers to ponder over the surprise and shock that overtook people when two currency notes of high value were declared illegal after a four hour notice one evening. An alert government should have been prepared itself well to deal with the aftermath.
The government failed to make sure that new notes were available at the banks in adequate numbers and the ATMs were not ready to deal with the new situation. The banks found themselves short of staff. The recalibrations of the ATM (over two lakh in the country) would take three weeks, says the finance minister. Do we have enough technicians to recalibrate the ATMs within that time?
Modi had raised people’s expectations sky high during his Lok Sabha poll campaign. After winning the polls he found he cannot meet most of them, causing disappointment among many of his followers. His loud claims on ending the generation and circulation of unaccounted (black) money look no different. How will replacing one set of currency notes by another root out the long and well-entrenched tradition of dealing in cash?
The terrorists and their financier will not be deterred either. If it has been possible all these years to print fake Indian currency notes so far, they will not have much problem in recalibrating their printing machines to continue printing fake Indian currency notes.
It is easy to excite people with the talk of eradicating black money and corruption. But it will not happen without first eliminating the root causes or sectors of economy that contribute to the generation of black money. The cancer of bribery has not been removed, whatever the likes of Modi and Arvind Kejriwal may say.
Perhaps the real estate business creates the biggest amount of black money. The big players in this sector are aligned to politicians and, therefore, enjoy some ‘immunity’. The bottom line is that no political party is going to fight the polls without the help of black money.