Ninety deaths, thousands of jobs lost, major inconvenience, shrunken economy and an unreliable finance sector. These are some words which might be associated with the word ‘demonetisation’. While previously, most of the criticism was limited to bad implementation of the scheme, now even the idea is in the dock given the shifting stance of the government. What started off as a fight against counterfeiting and black money, as per Narendra Modi, is now appearing as an attempt to shift towards a cashless economy.
“Demonetisation is good.” These were words which resonated well with the general public for at least 3-4 days since the high denomination notes were stripped off its legal value. While nobody knew what good would actually come out of it, everyone was sure the picture would be clear in the next 15-20 days. And indeed it has been clear.
The words “monumental mismanagement,” as former Prime Minister, ex-RBI governor and noted economist Dr Manmohan Singh said, in his speech, need not be substantiated now. Country’s GDP is expected to shrink by 1-2%. RBI committed errors while printing notes, there are long queues outside ATMs, amongst other things. Government ticked on all the possible not-to-be-ticked-boxes. According to report by ABP on November 12, 40% out of the total of 2.2 lakh ATMs were not dispensing cash. The government envisaged to replace 86% of the running cash within days.
The idea of demonetisation which was supposed to be noble initially is based majorly on three themes. To stop terrorist activities, reduce black money and the latest one, to encourage people to move towards a cashless economy. Does it stop, or even reduce terror activities? I don’t know how to explain the attack in Nagrota on Indian army where we lost seven security personnel, including two officers. I also cannot understand the recent attack in Bandipora in the same light.
The surge in deposits in the Jan Dhan accounts suggest black money holders had efficiently exploited the earlier 2.5 lakh limit for every account. Apart from the possibility of demonetisation being unlawful, it may set a dangerous precedent for future governments. Moreover, continuous chest thumping by various ministers about the ‘success’ of this scheme, might not resonate well with the independence of the Central Bank of India.
The last one, which encourages people to move towards cashless economy is like selling a rotten product. To go digital, one not only compulsorily needs to have a bank account, but should also be well-versed with mobile applications and cards. Statistics say that only 17% of people own a smartphone, let alone use Paytm or mobile banking. I become optimistic with the government that one guy will be tech-savvy enough to use mobile banking app, will transfer money from his account to his Paytm wallet and have internet function on his phone. Yet to hear a good argument for demonetisation. Anyone?