PM’s 50 days timeframe is over which had started on November 8th and ended on December 31st midnight , when the nation watched and listened carefully his public address that 500 and 1000 rs currency was no more a legal tender, People waited and clapped both their hands that demonetizing high valued currency was a good move to address the plaguing issues like black money, counterfeit notes, and terrorism funding . Yes well said Mr. PM, We all believed that by all accounts those menaces should be addressed hands down, the action by Modi, in fact, was a step in right direction. But people were expecting the announcement from PM on the December 31st, 2016 that PM will address the nation with actual facts and declare the success rate in countering the issues for which people have waited patiently in queues n spite of the difficulties by keeping the national interest in mind. Now the deadline announced by PM has passed, still, the cash crunch is continuing unabated with no respite on the immediate horizon. But carefully worded PM minced no words on the success of his massive reform. Instead as usual at his best, he eloquently announced several sops to divert the attention from the core issue. The last 50 days more than 100 lives have been lost while standing in the queue to draw and exchange money which is legitimate right necessarily to buy things like medicine, groceries and pay their rents. But no word of assurance from PM when the crisis is going to end, and how far they have to wait in long queues to get to their cash lying in their respective bank accounts. People have patiently digested the change in rules which roughly got changed more than 15 times in last 50 days.
Carefully catapulted narrative to shift the attention to digital transactions
The war cry to address the black money is slowly pushed to backburner , and new found enthusiasm to promote the cashless transactions had started finding more traction , the most visible attractions is the launch of Bhim App which is linked to adhaar, everybody in govt and others who supports Modi started favouring the use of digital transactions as the best possible remedy to tide over the crisis which was self-inflicted by the elected govt who is supposed to take care of the people’s wellbeing . Now the government being tactical is puts the burden of its own decision back to the same people who had voted them to power.The irrational responses from the ministers without understanding the hardships of the informal sector is the biggest despondency shown by the ruling government.I think those rich and elites are watching the hardships of the common man on the streets laughing at the plight of the poorest of the poor. In the last 50days, we have seen how bad and severe was the impact of demonization on the informal sector. The livelihood of the casual laborers, small farmers who depend on cash to manage their daily household expenses was left in the lurch, Govt is busy vouching for cashless transactions through mobile wallets and electronic banking, a complete insensitive approach to common man’s sufferings.
Push for a digital economy with no logic
I am not qualified economist nor having any deep understanding about the undercurrents of our macroeconomic system, But as laymen, if I apply simple and straight forward logic of how a normal consumption happens in the economy, especially in the rural sector, one should really find the economic logic of demonetization falls flat. The cyclic effect of such a large disruptions even if for a shorter duration has the potential to create large ripple effects which might pull down the economy to a state of decline. Like adding woes to the injury, this massive reform is going to severely hemorrhage the country’s economy in the months to come. Last week I was having a word with one of my friend who is a wealth manager in one of the leading financial conglomerate , he is of the opinion that economy would pick up in the long term and what telling effect it had on the economy takes more time to judge, I asked him how his wealthy customers are responding to the demonetization ,he laughed and said my customers don’t keep anything in cash their money is held in other various asset classes other than cash. He also admitted that a lot of consumption has been displaced because of this move, but somehow due to the relaxation in taxable income, salaried class, and middle-income groups would be left with more disposable income than usual which will fuel more consumption, in the hindsight spending will pick up, I asked him about the state of informal economy , he has no answer to that specific question . I think I felt the same when PM or FM speaks to media on demonetization. It remembered me the act of robin hood who stole from the wealthy and gave to poor, But here PM sucked in what little is left in the hands of the poor and passed the benefits to mobile and E-wallet companies, certainly provided on a platter a real harvesting time for the many of the startup wallet companies. Last but not the least if the govt is so serious about curbing black money, the first step should have been on addressing the issue of political funding manner of spending it during elections, But no serious attempt to address the donations to political parties, but if they had shown some spine in addressing the naked truth with seriousness then the whole demonetization drive would have created some semblance of credibility.