A common service-class Indian's take on NDA government's old Rs. 500 & 1000 De-monetization policy!

8th Nov 2016, 8 P.M – In a surprise press conference, The Hon’ble Prime Minister of India Mr. Narendra Modi declares Rs. 500 & 1000 notes invalid starting midnight. The impact – It obviously stirs up the nation of 1.34 billion (134 crores) citizens!

When anybody to everybody is now either supporting or criticizing the move, I as a common service-class man too have my take or rather the incomplete understanding of this policy and its impacts – let me put it in words!

The Chaos

What follows is ‘Total Chaos’!

ATMs are out-of-work since then. Banks are working Saturday & Sunday. Businesses are shut. Opposition democracy is again active. People are hoarding in queues outside Banks to withdraw just Rs. 2000 (now increased to Rs. 2400) or to exchange old currency up to Rs. 4000 (now increased to Rs. 4500). If buyers don’t have cash, even the sellers don’t have the return change.

Why does whole nation have to suffer for the wrong-doings of few corrupt people? The marriages are being postponed. The businesses are shut. Healthcare is affected. The complete nation is feeling the brunt. Why? Would there have been a better way to execute this, still keeping it secret? Is this too much a price for cleaning the backlog? What can be the NDA's (other) motive behind this sudden strike, if NOT black-money? What should have been done to avoid or at least minimize this chaos? Still figuring it out...

CASH-ualty

The first benefit that comes to my mind is – The ‘previously-stacked’ un-taxed black-money (cash-only) above Rs. 2.5 lakh has now been rendered useless. Though with less than 5% population, what I understand is that it accounts for a considerable amount - more than few thousand (or perhaps lakhs) crore rupees. The proof is recent news of people burning or dumping crores of rupees. As stated by Mr. Narendra Modi (and I believe him), some of this cash was to-be-used for terrorist activities which has now been prevented.

Go Cashless

India is now moving towards electronic payments, i.e. cashless. Use of Internet Banking, Debit cards, Credit cards, Mobile & online wallets, etc. is on a surge. Moving to electronic and mobile payments is a sign of technological growth since money will circulate in the economy and not be stacked in some hoarder’s home, lying useless!

Though not an economist – but I feel more the money deposited in Bank accounts, more will be the nation’s growth. The more we move towards e-payments & m-payments, more will the transparency in money circulation, i.e. the nation’s growth.

Surprise! Surprise!

8th Nov 2016 would be remembered as a historic day in Indian economy when the NDA government (or specifically Mr. Narendra Modi) gave this surprise (or shall I say shocking) news to the nation. What a timing! 8 P.M in the night with just 4 hours to de-monetization of old Rs. 500 & 1000 notes. But I understand that this had to be a surprise – not giving ANY time to implement a way-out!

But if you think of NDA’s 3+ years’ tenure, this may not come as a surprise. The NDA government’s resolve to tackle the black-money >> approx. 20 crore Indians opened their Bank accounts via the Jan-dhan yojna >> PAN card made mandatory for 2+ lakh cash transactions >> Rs. 67K crores deposited as the part of Income declaration scheme >> And now this surprise!

The Queue

People have started comparing the recent long-queues & struggle with the queues during Roadies auditions, or when trying to get Reliance Jio sim cards, etc. What I understand is just a basic difference – the prior one is ‘optional’ or ‘by choice’ but the recent policy has ‘forced’ complete nation to queue up.

‘Opposition party’ | The name says it all

The name says it all – I guess Indian political parties took the terminology way too seriously. ANY policy by ANY government, and ‘Opposition party’ is all out to ‘oppose’. Mr. Arvind Kejriwal is declaring Mr. Narendra Modi as PAYTMs advertiser, forgetting his advertise for cab aggregators or the chaos at metro stations during the New Delhi odd-even scheme. Mr. Rahul Gandhi is out in streets to show his condolences to the people standing in queues, forgetting the added-chaos that he brings.

Why can’t India have a positive-politics? I.e. The Congress or AAP might have gained much if they would have supported the common man’s struggle and used their so-called-power to ease some of it. We have much more to learn from the selfless Sikhs out there helping people in the long-queues.

No impact to corruption

Some say it’s a move against corruption. Yeah! It’s a move against already-stacked money, but not against the current (or future) corruption. Rs. 500 & 2000 currency notes will still be exchanged as bribes.

This is NOT a Taxation reform

Many people are connecting this De-monetization with Taxation reforms asking government to simplify the tax structure. But these two are separate issues. This De-monetization is to tackle the OLD black-money, Taxation reforms will be to tackle the future incoming revenue. Don't mix it & create confusion. Yeah! But in broader perspective every move in this direction is to cleanse Indian economy - be it opening of Bank accounts, Income declaration scheme, De-monetization or the upcoming GST bill.

There will always be loop-holes

Black-marketers & Hawala kings have already started exercising their brains on how to save their ‘easy-earned’ cash. What we must understand is that every system will have certain loop-holes, but it is not easily accessible or known to all. With no idea of such loop-holes, we can just hope that NDA government has left minimum of them (or covered maximum of it).

All is Well, that ends Well

At the end, if I see the complete picture – there is chaos, right. But I don’t remember when did India last supported such a policy by ANY government. I can feel the positive vibes among ‘frustrated’ Indians. Though chaotic, but it at least is NOT a scam. We (the majority who elected the NDA government) have faith in our government and only time will tell the positive / negative impact of this economic rejuvenation. Hope NDA publishes the results of this rejig post December 30, 2016.

Stay positive | It will take time

Let me be blunt - People are ‘over-expecting’. India was traumatized by the innumerable scams and ever-growing corruption during the past governments. At least I feel happy that during these 3+ years’ we haven’t heard of ANY scam by the NDA government. The garbage of past 60 years CANNOT be cleared within 60 months. It will take time. Be patient. Have faith. At least NDA government is doing something – first time there is a HOPE for BETTER INDIA.

Disclaimer: The views presented here are my personal. I might be wrong. Any correction, views, comments, analysis, feedback is heartily welcomed!