It’s been sometime I have been at the receiving end of the
effects of demonetization. I still am confused whether what the government is
telling is right, that it’s today’s pain and tomorrow’s gain. Or what the
opposition parties are claiming is true, that it’s not going to serve the
intended purpose of eliminating black money, that it’s legalized loot, that
nothing will prevent counterfeiters from counterfeiting the newly introduced
notes and so on.
Whichever side of the argument you are on, a few things are very clear. It’s almost a month since
demonetization and the situation on ground is still not back to normal.
Most ATMs are not functioning, barring a few located in prominent places per
area. The load on these few functioning ATMs is so high, as a result, that they
are running out of cash within a few hours of refill. I stood in long queues of
several such ATMs and the cash ran out when my turn was two to three people
away. The luckiest ones walked away with 100 rupee notes, the luckier with
2000, some (including me) had to return emptyhanded. Even if you are lucky to
get some cash, there is restriction to how much you can draw. Until some time
ago ATMs cards from banks other than the host bank were not working. Now they
are.
Like many of you, I am tracking this development closely and
have read several articles and heard some interviews. Posthumously, they say a
range of things which could have prevented or at least brought down the scale
of the crisis. Instead of banning both 500 and 1000 rupee notes, they say, the
government could have banned one – preferably 1000 – and left the other, which would
have given them time to replenish the banned notes and also the option of
targeting the 500 rupee denomination later. If they had taken some time to make
all the notes the same size, which is how it is in many countries, the ATM
machines would not require recalibration, they say.
These ‘should have beens’ may not bother us much now that
it’s too late, but at a national and personal level there are a few possible
outcomes of them. The happy political consensus over GST seems to have
dissipated and reorganized itself as a pan India opposition against the
government over demonetization. No one seems to mind the purported goals – end
of black money, cashless economy etc - of demonetization; given their lofty
nature, they are slightly unchallengeable. The opposition parties seem to smell
a political opportunity in how demonetization has been carried out. And that
seems to be the bone of contention for the amm janta too…who may think, if the
mainstream media reports are to go by, that little bit of pain is worth the
long term gains. But as each day goes by without the situation coming under
control, the concern that’s becoming bigger and bigger is: how long the patience
will hold out?
The answer to that lies in several things. How long will the
government take to pull the situation under control? How soon, in what forms
and how tangibly will people see the benefits of the pain they are undergoing?
How long the government will be able to prevent the growing voice of a uniting
opposition into becoming a nationwide roar (something like the G scams)?
A lot of this will require perception handling. Also, as the government
works towards getting things in order, care has to be taken to make sure that nothing undermines the ground which is being covered on the way to normalcy. The
system has countless holes through which illegal money can travel back and
forth having a termite-like effect. And there
is enough evidence that this is happening. New notes worth over Rs 4 crore have
been seized in income tax raids in Bengaluru. Similar incidents have been reported from other parts of the country. And there are inherent challenges.
One of them is the unorganized economy in India is intricately entwined with
the mainstream economy and the former is mostly (unless it is illegal) cash
based.
On ground a few things need to be made smooth so that after I
get a 2000 rupee note it’s easy for me to find change or there are enough 100
notes in ATMs. The number of functioning ATMs should start growing so that I
don’t have to stand in queues for too long. If the problem is to linger for a
few more months, then special arrangements should be made on payment days,
either by pumping in more currencies or devising ways to identify and move as
many as possible to crediting their stuff salary into their accounts. None is easy. And what makes it difficult is
this hydraheaded monster has to be tamed FAST.
