It was just another weekday; until my phone began beeping message alerts. My friends in the policy space went berserk discussing the demonitisation! I had just got back home and was completely unaware of what was happening in the World outside my own. The many messages made no sense - it seemed like they were discussing the issue of another country. I turned the television on and tuned into the news channel and saw the Prime Minister making his announcement to a Nation caught completely unawares - the denominations of 500 and 1000 were demonetised with effect from midnight. After all, the PM does have a flare fanfare and some drama so, for a few minutes, I thought I hadn’t heard him right and read through the messages in my phone again - I had heard him right! I quickly rummaged through my purse and found two 100 rupee notes and wondered why the ATM cheated me that very evening as it doled out crisp 500 rupee notes to me.
Like many others I, too, felt it was a gusty move - explained as a measure to cut down on counterfeit currency, funding of terrorism and hoarding of unaccounted money - the racist in us refers to it as ‘black money’ (I hate it). And then my mind quickly began analysing the ramifications of it - the real estate sector, which seemed to have an insatiable hunger for unaccounted money, would take a beating, the prices of gold would fall, the liabilities of the RBI would, probably, get wiped out through this one measure….until I wondered how I would survive on 200 rupees.
For two days we had no access to our money and on the third day the queues were serpentine. I told myself I had plastic and had relatively less trouble as compared to the many lakhs who were trying to get a few legal currency to keep the hearth at home burning, to bring that medicine for an ailing mother, without which her health would be in danger, to feed that child that was wailing in hunger…. It certainly wasn’t a nice situation to be in. The ATM machines ran out of money and weren’t the Any Time Machines that a banking house had famously called it - they just were Automated Teller Machines that failed us big time.
As I stood in the queue on Day 5 I noticed that the need for money was a great equaliser. And by this time most banks had figured out a systematic way to handling the crises on hand(!). It took me 10 minutes to feel richer by 2000 rupees. Suddenly, the lack of liquidity made me realise the value of the paper that runs the wheels of the economy. I have been careful in spending money and lent some to my house-help. But this experience has made me question it the government could have handled its implementation better; after all, they had the support of the people in tackling the menace of unaccounted money in the economy.
We believe that the entire operation was kept undercover, with only a few in the know. Could they have got the lower denominations and the new 2000 rupee note ready before time? It was known that the government was bringing in a new note of larger denomination - that was no secret. So, these notes could have been printed well before, gauging the demand, and the ATMs could have been recaliberated for the same. Everyone hopes that things will stabilise soon.
In the meanwhile, however, one will have to appreciate that investments will now see a change; there will be a tectonic shift from savings in physical assets to that in economic ones. The equity market is expected to be seen more favourably by even the conservative investor. As real estate prices will see a downward trend, the dream of owning a house may be more realistic now.
As we wait and watch, read analyses by the Gurus in the field and try to make sense of it all, relating it to our own case, I remember ABBA for their take on money!
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