[stextbox id=”alert”]Inconvenience of citizens was no excuse to retain a monetary system that facilitated the unscrupulous[/stextbox]
[dropcap]D[/dropcap]emonetisation is the boldest move by the Narendra Modi government in its two-and-a-half years in office. While news of reforms has kept trickling in throughout Modi’s tenure, they either seemed incremental in nature or a rehash of Congress-led UPA government’s programmes — until 8 November this year. The most effective tactic that the prime minister used while announcing the decision is offering a mere 4-hour window to utilise the old Rs 500 and Rs 1,000 notes after which the currency of these denominations turned trash. Only money in the form of benami properties remained whatever they were worth, which will soon attract the tax inspectors, too. To recover the Indian money stashed in overseas tax havens, the NDA government has to think beyond the ineffective DTAAs. Earlier, the poor were included in the banking network through the Jan Dhan Yojana, and the black marketers were warned to come clean before 30 September. There was no excuse left with his detractors when he finally released the bolt from the blue on the parallel, underground-yet-large economy. This bold move by Modi, which even his Cabinet barring Finance Minister Arun Jaitley was not aware of until 7:45 PM of the evening after which the announcement was made via television, is reminiscent of a similar act by the Morarji Desai government. In fact, it was questionable why a poor India under Indira Gandhi needed notes even of Rs 10,000 denomination, if not she was indebted to the motley group of crony-socialists of her era. Under Manmohan Singh, several activist groups, Baba Ramdev’s Bharat Swabhiman most prominently, had made this demand, inspired by the proposal in a private website called Arth Kranti, to no avail for four years — as it had been noticed that the daily liabilities of the poor could be met easily with notes of Rs 100 or less; the middle class could use electronic money and only the filthy rich needed Rs 500 or more per legal tender to grease the palms of the powers that be. True to his wont, Singh sat unmoved by the demand.
The political opposition to Modi’s decision may be overlooked as it amounts to compulsive detraction. The small section of the population that opposed it may be divided into two parts, wherein the first comprises those sitting on stacks of unaccounted, high-value cash and the other are those with genuine grievances: housewives, families that have wedding ceremonies scheduled for this season, those who went out of town with bills that turned defunct on the way, etc. We have no sympathies for the man who did not declare his real income all these years, but his wife is less at fault in keeping the money for household expenses, arguably with no knowledge that the cash is ill-gotten. In the spill-over effect, the domestic helps she pays are in a quandary. With the government decision that not more than Rs 20,000 can be withdrawn in a month, families that are organising weddings are at their wit’s end trying to figure out whether to pay the tent firm its dues in cheque or electronically and invite a huge service tax or ask several among the kin to withdraw Rs 20,000 each to make the payment. The decision to keep all automated teller machines shut for the whole day means that the whole banking system, led by the RBI, was not ready with lower-value cash in anticipation of the Prime Minister’s decision. Travellers inconvenienced as a result are cursing the government even as they and other ordinary citizens alike are hailing Modi in the same breath. The small-to-medium scale businessmen will now have to turn to electronic money for large transactions. Having flagged the concerns, we must say no inconvenience whatsoever can justify corruption. The Prime Minister’s speech has details to address all misgivings of the honest populace — except an explanation for the proposed reintroduction of Rs 500 and fresh Rs 2,000 notes in the near future.
Piecemeal as his previous reforming acts might have been, Modi’s speeches, including the one made two nights ago, indicate he has all the expectations of his constituency in mind. The real estate example in his speech was a case in point. After a plethora of speeches singing paeans to the poor man, the premier finally spoke of the middle class in this speech. He must now work on reducing taxes to make legal operation in the economy a preferred option and an enjoyable experience. Politically speaking, as supporters of Modi grew impatient for his acts of fiddling in the name of reforms, the leader known for understanding the public pulse the best out of all living politicians inspired the nation all over again first with a military move against terrorist-sponsoring Pakistan and then with this sudden, big change in the domain of the national economy. One may recall the nationwide debate on triple talaq — with that on a uniform civil code as a corollary — he has provoked. At the end of the five years of this government, its supporters will find in all likelihood that most of their demands have been met and the few left merit at least one more term for Prime Minister Narendra Damodardas Modi.