Impacts of demonetization.

When the Prime Minister announced about the demonetization on 8^th November 2016, it sent a wave of surprise to all in the country and a shocking blow to those who have amassed millions of unaccounted money. While the shock and surprise are yet to dip, the effects of demonetization are already beginning to show. While the hoarders of Black money are shedding crocodile tears about the sufferings of the common man standing hours together at the bank to exchange his old currencies, their allies in the guise of journalists and financial experts are finding loopholes in the arrangements. Many of them argue that this should have been better planned, so that the misery of the common man could have been avoided. This was not only a very bold and selfless initiative done by the government but also a very secretive one, to which only very few people are privy. And Modi baiters very well know that any level of planning and gearing up would have alerted the very men who are the real targets of this action. Don’t think that they are ignorant, they are only being complicit. Hoarders would have immediately converted their ill gotten money into any other form. But it is also not correct to say that the government caught the common man and small time traders unaware. If you look at the various steps taken by the present government you can very well understand that the government is taking a steady but sure step towards bringing the parallel economy to task. First it was the Jan Dhan Yojana scheme which could get a total of 25.51 crore new accounts as on 9.11.16, which basically comprises of farmers and people in rural India. This paved way for a direct link between the common man and the government getting rid of the touts and middlemen who are the reason for the pilferage in all of the government welfare schemes. As a result of this common man could get the benefits directly from the government subsidies. This gave a blow to the corrupt politicians who used to siphon the grants given to the public. This also brought a major chunk of our population into the banking practices.

Then the government announced the voluntary income disclosure scheme, giving a lengthy rope to the wrongdoers to correct themselves. A total of 65,250 crores were disclosed through this scheme. The demonetization step followed these previous actions, which is quite logical. Already around 5.5 lakh crores have been deposited in the bank within 2 weeks of this announcement and various reports are coming about sacks of cut notes being dumped into sewage canals. So if anybody is surprised by the government’s stern action it is only because of the corrupt and callous governance to which they are used to, for the past several decades.

Government is pushing the country towards more banking transactions and more transparent accounting. This may also be a step towards a cashless economy, as many are hinting about. The gradual transition towards digitization and a cashless economy will definitely help curb corruption in the long run. The increased transparency and record of transactions will make it considerably difficult to hold black money and carry out under-the-table deals. The added convenience of using digital payment solutions and virtual wallets can’t be ignored either.

While announcing this demonetization program, Government stressed that it is the only avenue available to curb the hawala market and the funding which comes to the terror groups. Fake Indian Currency Notes (FICN) network will be dismantled by the demonetization measures. Taking out 500 and 1000 rupee notes out of circulation will have a lasting impact on the syndicates producing FICN's, thus affecting the funding of terror networks in Jammu and Kashmir, North-eastern states and Naxalite hit states. But we seldom see any news channel, discussing about this intent of the government. They probably would have thought that even the very mentioning of the word terror, would hurt the sentiments of a “section of people”. And as if to assuage the wounded hearts of those people they are inventing stories of suffering to common man. It is not to be forgotten that many of these news channels are actually floating on very same corrupt money, which the government want to get rid of.

With nearly five state elections in 2017, demonetization has stunned political parties. Especially, in large states like Punjab and Uttar Pradesh, cash donations are a huge part of "election management”. In one stroke, big parties will find themselves hamstrung as cash hoards are often undeclared money. Parties will have to completely rejig campaign strategies in light of expected cash crunch

We should bow before the Prime Minister for taking such a bold decision, which he very well know, is going to get brick bats from his detractors and also could lose him favors from his own admirers. But he has taken a decision which no one has dared to before. This action has shaken many of our people. This action is intended to purify the national veins from the clogged pollutants it has acquired over several decades, an action to revitalize the values. This is a direct call to our conscience. A positive take away from this action is that many among the youth are welcoming this move. That gives a glimmer of hope about the future of our nation.

V.V.Balasubramanian

YB-ET