Tuesday, November 15, 2016

Money often costs too much

The Big Bang ...

The scenario in my country for the last one week has left me mulling over a few questions and thus brings me to writing this post on my blog. I could not find a better title for it than a quote by noted American poet Ralph Emerson - "Money often costs too much".

Indians turned their heads a little away from internal affairs for a brief period to keep tab on who was winning the race to become the next American President when a big bang was announced by their own Prime Minister Mr. Narendra Modi, just hours before the day - Nov 8, 2016 came to a close. Indian currency with value 500 and 1000 were no longer legal tender starting from midnight that day. Rules were tabulated for the citizen on what they could do with old 500s and 1000s at hand. New 500 Rs notes and a new denomination - Rs 2000 were set to replace them soon in market.

Prima facie, it appearedthat the government had a sharp agenda and a firm plan in place to root out corruption, eliminate black money and fake currency notes; thereby crack the whip on all wrong doers, from tax defaulters to terrorists. 

Why no new 500 Rs notes?

What started as a "wow" feeling about the demonetization announced slowly downgraded to a "Hmm .. I don't understand" when new 2000 Rs notes came into circulation but new 500 Rs notes were amiss. Even as I write this post, new 500 notes are not in circulation. This gargantuan gap from Rs 100 (the highest valid denomination from old currencies) to Rs 2000 (newly announced) could not be bridged by a simple leap of faith. In a country, where providing change for Rs 500 after a purchase from market/small shops invites complaints from vendors and leaves them scowling, introduction of even higher denomination 2000 made many mad. And its introduction into market before its less valued but more often used partner Rs 500 made matters worse. The "something is better than nothing" formula does not work for cash in hand all the time. 

             A cartoon by a friend depicting the fall out of demonetization - "Cash crunch or Compassion crunch"

Physical re calibration of ATM machines, could this have been avoided?

The whole operation of demonetization soon landed up in bitter taste when realization struck that new notes, now smaller in size were not compatible for ATM dispensation and trays in machines had to be physically replaced by workers for process correction. Any sane citizen can gauge the mammoth effort and plentiful time required for this task completion. ATM s remain shut LARGELY, even as I write this post. Citizens have no choice but to stand in serpentine queues outside banks for withdrawal of money needed for their daily chores. If ATM s were equipped to handle withdrawals with minimal delay, at least in urban and sub urban areas for many possess cards here, stress on banks and its officials would have largely reduced. This , along with timely release of new 500 s could have improved the efficacy of demonetization implementation and made the PM's brainchild a noteworthy success.

Why I fail to find sense in what the Finance Minister says?

If P Chidambaram in the role of Union Finance Minister during previous UPA regime irked me thoroughly with his rigmarole like answers interspersed with many pauses and a composed "I can never go wrong" attitude, the current Union Finance Minister, Arun Jaitley too seems no less. He foresees a cashless way of economic life unfolding soon but could do plainly nothing to put existing set up of ATM s to optimal use to ease unrest among card holding public. A commoner residing in India knows that to bring everyone from a local tea seller to ones who run small road-side eateries to use digital wallet and replace use of small value currency notes with it is a Herculean task and highly preposterous.And what makes one think that hi-tech digital stuff is the answer to all worldly problem and being error free. How can one eliminate human error when these technological inventions and innovations are created by man himself? Not to forget, a few weeks back, about 3 million debit cards were hit by a massive hack and a plethora of faulty transactions created alert . 

Everything is not digital logic 

From recent conversations with friends and acquaintances in person or over social media, I have understood it is all either black or white, no, I am not talking about currency here. 

If I raised questions on implementation of demonetization, I was quickly dismissed as a fan of a buffoon named Rahul Gandhi, an admirer of All time Anarchy Party (AAP) leader Kejriwal or a victim of media foul play and its exaggerated negative projection.

There is no middle path. I am one among those who voted Narendra Modi (or better said his party, BJP) to power and I look up to him as an able leader, a great orator and a smart administrator. His announcement on 500/1000 note ban instilled in me confidence that my decision, my vote was purposeful. But watching his plan unfold into action gives me credible doubts. Unquestionable, blind faith in an elected leader is not an essential quality of being a nationalist. 

Demonetization has created a huge wave of change in buyer-seller relations in my observation. To me, I have temporarily shifted my loyalty from local, small time vendors to supermarkets where I can swipe my debit card and imposed a restraint in buying stuff that needs me to part with small value notes, I possess few of them and for now see they are difficult to procure. 

People; most importantly, the bank officials are highly patient and extending full support to the government's move of demonetization. The commoner will begin to shed his/her skepticism and feel positive about this change only when some of his immediate discomfort is minimized at the earliest possible. A clear reflection of this change , its promise for a better future will be visible only when murky waters on the surface give way. The government can rest assured that sensible citizens of the nation meantime will neither be swayed by Rahul Gandhi standing in queue for currency exchange nor emotionally moved by Prime Minister's old mother doing the same. 

Note: The cartoon that features in this post is by my friend, posted here after due permission.