CASH (LESS) NATION

One of my friend seemed visibly embarrassed. When quizzed about the reason, he told me that he did something which he had never imagined he would ever do... He broke the 'piggy bank' of his 5 year old son to have some lower denomination cash to pay for the daily vegetables. Another friend told me how she managed to just scrape past an odd situation when she traveled in an OLA can with just 250 valid cash in her purse. Luckily the trip bill came up to 230 rupees and she thankfully had 20 rupees left with her. But she had to de-board halfway and from there she hitchhiked with her friends back home. 

For the last couple of days East and West of this world have been shaken for different reasons. While US was consumed with getting their new president, India was suddenly caught in the demonetization whirlpool. If Trump surprised US and the world by getting the mandate, Indian government pulled out a surprise that it believes is a trump card of sorts in thumping out black money from the country. By demonetizing existing 500 and 1000 rupee notes, the government claims to have caught black money hoarders unaware. The old notes can be exchanged for new currency until the end of this year. The assumption is that only white money holders will dare to visit the bank as there will be heavy penalty for those whose income mismatch happens from the tax declarations provided by them. Sounds really smart, but will this move really flush out black money. 

You may call me skeptic. 

 
The matter of fact is that even after days of the announcement what one can see and experience is long serpentine  queues outside banks of people waiting to exchange their money in new currency. The banks seem to be ill-prepared to handle the mammoth task of re-circulation.  Most ATMs remain shut contradictory to government's announcement and people are struggling for cash. India is predominantly a cash-based economy with electronic payments still limited to online transactions and limited offline presence mostly restricted to malls and bigger outlets. Hence buying essentials like grocery, vegetables,  fruits, medicines; paying the cabbie or purchasing bus tickets, paying for parking tickets etc. has suddenly become a challenge. The enormous inconvenience that the public in general is facing is humongous and for those who are aged or differently-abled this task of queuing up to banks is torturous.  

I wonder if demonetization  had to be done why didn’t the banks prepare in advance? Were they expecting people to go through this harrowing experience of reclaiming their own money? India is not a small country and did the central bank or the union finance ministry did not forsee the challenges of implementing demonetization? 

But then our politicians and many self proclaimed patriots are crying hoarse that all this is for the nation's interests and one should not complain about the inconvenience since this will help to eradicate black money. Any such voice of dissatisfaction with government's announcement are being trolled on social media and even called unpatriotic.  My God! What have we come to – a democratic nation that loses it power to question pretty much contradicts the word democracy itself! 

I have a question for those who believe that demonetization is going to expel black money – 

Do you think people who hoard black money keep that in cash except may be some novices? There have been some reports of cash burning etc. I wonder what percentage of total black money it represents! 

Most black money hoarders would be clever enough to have converted liquid cash to other convenient forms long back. 

Let us look at some of the possibilities- 
1. Benami property – property bought in fictitious names. 
2. Agricultural land. 
3. Gold. 
4. Parked in foreign banks as converted currency. 
5. Invested in overseas property in countries that allow immunity to names of those who put in their money. 
6. Run illicit  trusts and show such money as anonymous donations. 
7. Run illicit NGOs and hide under garb of social welfare. 

These are just few hacks of black money marketers.  They have many tricks under their sleeves possibly, but to assume that they will be foolish to have kept as stocks of cash in their hidden chests and trunks is so unintelligent and funny. 

How is the government planning to crack down on them? 

Everyone knows that biggest such cash donations come to the insatiable bowls of most political parties. The ‘big fishes’ who provide such donations are not so novice in their art! Are they? Yes with some important assembly elections round the corner perhaps it can affect the election spending of unprepared parties. 

Corruption is a behaviour and is bred by the culture and character of a nation. We need to focus on that to uproot this behaviour.  Till this behaviour remains, people will find some way out! And now with such moves by the government the black money marketers  will be even more cautious. 

So despite the hullabaloo over surgical strike on black money the fact that this may remain a distant dream is not unfounded. Even the former RBI governor Raghuram Rajan has expressed his scepticism over government's announcement of demonetization. 

Whatever might happen to black money but right now the middle class and the lower class in India are in turmoil and are sweating and panting to get a drop of their own rightfully earned white money. 

As the ordinary tax paying citizens of this Cash (less) Nation reel under this tornado, may God bless us and our country India. Hope is not lost on black money though!