When he became the Prime Minister, I had commented that he must have surely read atleast two books, one of which was The Dictator’s Handbook (the other one was Banishing Bureaucracy). A politician’s life is hard to put down in words, or maybe, even a film. There’s so much that words or images would fail to convey.And not to forget that it also “makes strange bed-fellows”!
So, with one sweeping statement - an address to a Nation caught unawares- 86% of the currency in circulation was demonetised. And imagine this: there are may regions in our country that do not have access to a television, people who had no idea what hit us all, many who were incapable of understanding why this was done and what the way was, going forward. The government had it’s reasons and we were to comply. So what if money saved over years to send that young girl to college, or for that unforeseen emergency was suddenly of no value? We were reassured that we could deposit this in our bank accounts and get credit for its full value - but more than half the population had no access to the banking system! And those who do have accounts find themselves in serpentine queues, away from the work that would bring them their daily bread.
The government took pride in the secrecy of its mission - only a handful knew, they claimed. The opposition did not believe them, ofcourse, but, then, that’s their job - to play doubting Thomas. Assuming we believe the government, was that really a wise thing? One of my friends asked, “What were they thinking?” and I thought “what were they, indeed?”. It’s important for any politician, or, for that matter, any person with decision-making authority, to avoid keeping her/himself in the midst of ‘yes-(wo)men’. The nay-sayers are the ones who often throw light on deficiencies in an idea. Had the PM taken the suggestions of a larger group of people, wouldn’t the ideas, opinions, doubts, suggestions have helped iron out kinks in planning such a game-changing economic and financial proposal? The probability of wisdom increases in proportion to the wise involved. Otherwise, we just have another story of the Emperor’s New Clothes!
An idea is only as good as its execution. A well conceived idea with poor execution becomes a bad idea (An ill conceived idea with good execution is the worst). So, we wanted to remove unaccounted money from the economy, cripple the funding to terror outfits and destroy the counterfeit currency market, all in one shot. Economists opine that the big-fish hoarders don’t really hold unaccounted wealth in the form of cash; they invest in gold, real-estate and other physical assets. Through this exercise, many of these will go scot-free. We are a nation that does not have a mature cash-less economy - the local vegetable vendor deals in cash and lives from one day to the next; he rarely, if at all, has any savings to fall back on during hard times. With 86% of the currency out of circulation, and cash hard to come by, his daily earnings are threatened. The farmer who was ready with tilled soil to sow seeds for the next season of harvest, finds himself with no money to buy the seeds or fertilisers - his future flow of income is threatened. As a traveller myself, I am able to empathise completely with the plight of the tourists who may have saved precious earnings and planned this trip to our lovely country, only to find that they have limited cash to enjoy the delicacies that our country boasts, to buy that miniature Taj as a symbol of love, or those lovely Kashmiri stoles. What they would take away from their visit would be memories of chaos and a population in queues for a portion of their own small wealth!
There are many such stories that one hears of everyday; multiply that by 8 and you have many, many stories that make you wonder if the government acted in haste. Shouldn’t the government have first moved towards economic inclusion, bringing everyone into the banking system? If the idea was also to help the economy move towards a cashless one, the preparation should have been more intense. Haste makes waste. And what was the need really to change the dimensions of the currency? Couldn’t they have designed it around the same dimensions so the ATMs would not require recalibration? That the design of the currency itself lacks any aesthetics is a different matter!
Public memory is short-lived. Or may be the public do not have the luxury of time to dwell at length on the policy misfires by the government. A majority government contrasted with a divided opposition makes things worse. People are still patient, supporting the government despite their hardships, in the hope that the dream house will me attainable, that a bribe won’t be needed to get some legitimate work done, that there will be more equality in society…We are, largely, a nation that believes in rationalising and when the next elections arrive, the time to spearhead a change, we fail ourselves.
The truth, however, is that the issue is too complex to completely understand its ramifications on the economy, on the financial institutions and on the people of the country. And no one dare carry the message for fear of being shot. For now, the people clasp their fate in their fists, tighter than that elusive note.
I must laud the sense of humour of the Indian people, who, through all this uncertainty, laughed their hearts out when a currency-note with a message ‘Sonam Gupta befawa hain’* emerged.
*Sonam Gupta is unfaithful
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