Is Demonetization actually doing justice to its purpose?

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Gone are those days when we would have enough cash to fulfill our luxurious wants. Since the past few days, Indians have been struggling with just a few currency notes in their pockets. In his official statement declaring this dynamic move, PM Narendra Modi said that it was a government initiative to curb “financing of terrorism through the proceeds of fake Indian currency notes and use of such funds for subversive activities such as espionage, smuggling of arms, drugs, and other contraband into India.” Primarily, it aims to hit hard at the existence and circulation of black money in the country. It has been more than a week since our government took this drastic step when he initiated demonetization. There has been information overload since the bold move. Our televisions, laptop screens, Facebook timelines and our peers in the ATM queues – all of them have their opinions regarding demonetization. Even though most officials associated in the national banks have hailed this a “super move” on Modi’s part, many economists are dicey about the effectiveness of the measure and for the results it will garner in the long-run.

Demonetization has affected our lifestyles in many ways. While some of us are managing easily through digital cash and card payments, a majority of the citizens of India have to compromise a lot in various ways. Apart from standing in never-ending queues outside banks, ATMs and Post Offices, the businesses of many street vendors and shop owners have reduced drastically because most of the customers do not even have enough cash to spend. There have been various heart-wrenching episodes and emergency cases including one in Pali, Rajasthan, where a family couldn’t take their ill infant to the hospital, only because the ambulance wouldn’t accept Rs 500 or 1,000 notes. Till the time they had found someone to give them notes in Rs 100 denominations, the newborn had died. This is one of several deaths after the government de-legalized Rs 500 and Rs 1000 notes. If we look at the statistics, maximum deaths have been of the people belonging to lower strata.

Even after a hay wired week, is this move actually going to help in curbing black money? There are numerous ways through which people still can and are using the same old Indian ‘jugaad‘ and converting black money into white. There are reports of people giving their black money to temple ‘hundis’ or donation boxes. ABP news showed a sting operation in which the priest of Govardhan temple in Mathura was willing to convert Rs 50 lakh of black money into white for a 20% commission.

Since Airports and Railways have reported surge in business in terms of ticket bookings. There have been many bookings and cancellations of tickets as well because old notes were accepted till 14th of November. To book train tickets, there has been a surge in booking expensive train tickets that people intend to later cancel and get refunds in new notes, with a small cancellation fee. As a result, the railways have said refunds won’t be in cash. Even after this notice, these bookings are being made through travel agents and refunds through electronic transfers and the agent would be able to return large sums in new currency notes.

Gold prices shot up because many black money hoarders rushed to jewellery shops as soon as Narendra Modi made the demonetization announcement on 8 November. Many black money owners utilized the four hours that they had and bought gold till midnight. There have also been many reports, again, of gold selling in back-dated transactions.

The question is, after the immense sacrifice, mostly by the middle-class and the impoverished ones, the black-money hoarders still have their clever ways to get out of the scanner. In this scenario, the elite-class is hardly getting affected; especially when we hear cases like that of a BJP minister marrying off his daughter in a wedding worth 500 crore. We’re all working towards the betterment of our nation’s economy, but, if this turns out to be at the price of innocent and poor people dying & starving just because they cannot withdraw their own, hard-earned money, how is the move helping the economy anyway? Demonetization seems to have very little effect on its actual purpose. Yet, we’re on the same page when we still hope for a cleaner economy with no anarchy!

 

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of University Express.)

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