Demonetisation and Public Response

Since the announcement of demonetisation on 8th Nov, 2016, a fierce debate has been kicked up. Opponents of demonetisation, which include virtually all opposition parties and a large number of economists and intellectuals have claimed dooms day for Indian economy, where GDP growth will be lowered by two percentage points, people will lose jobs, many will not get wages, nearly a trillion dollar informal economy will come to a crashing halt. Repeated assurance that discomfort may minimise by end of the year, as promised by prime minister, did not cut much ice. 

Repeated dooms day prophecy is enough to sow seed of doubt in the mind of believers. As difficulties rose, as I stood in line without much success in getting money from bank, I felt without planning why did government embark on such a move like taking out 86% floating currency? I was raging mad, when government was using words like Yagna, Aahuti etc. Yagna for whom? Who is giving aahuti, when common Indians are losing their wage, their health, sacrificing their happiness standing in queue to withdraw their own money? At the same time, it started appearing that many people in collusion with bank officials were getting access to new currency notes, while common Indians were turned away from gates of banks, due to currency shortage. To add insult to injury, during a four day long holiday banks remained closed. No one even filled the ATMs. Question arises, are bank employees not part of nationwide Yagna? Why bank employees are not giving Aahuti of their personal comfort at the alter of national Yagna?

As I look at the situation nearly forty five days since announcement of demonetisation, the following are my thoughts and/or questions:

  • It appears that long winding queues in banks are reducing. I had personally experience this in two banks in Delhi. I was told by friends and relatives in Kolkata, Mumbai, Vadodara and Kerala, that cash crunch is not pinching. ATMs at many places, however, are still not working with regularity. 

  • We are told repeatedly in news media that people are leaving their jobs in cities. Many are not getting their wage in cash. Many people do not have access to bank account. Vegetable markets are shut. Small vegetable vendors, it appears, are losing business. So are many small corner stores that sell groceries. Yet, when I visit markets like Sarojini Nagar in Delhi, a market frequented by middle class people, or when I visit a mall, I find these places full chok o bloc. Parking lots are full all the way unto level two of basement. In places were only cash in new currency was accepted, there was no shortage of people queuing up. This means, either there is no shortage of cash or digital transaction was working fine.

  • Big question is why people most affected by the move appear to believe Mr Modi? Some say poor are voiceless, they have no means to protest. Another thesis is moral capital of opposition political parties and politicians is so low, that no one believes them on corruption. Poor of India has seen many regimes and many governments, yet nearly 600 million Indians remain poor despite poor friendly people at the centre. May be poor of India wants to experiment. 

  • Demonetisation has brought to forefront Vijay Shekher Sharma, owner of Paytm bank. First generation English speaking man in family. Vijay Shekher is the people Modi is banking on. Fiercely patriotic a man cries when national anthem is played. His dream to see a resurgent India. Poverty is not new to Vijay Sekher. He once walked from ISBT to Greater Kailash because he did not have bus fare. A billionaire many times, Vijay Shekher believes money is only worth the opportunity it offers. These new breed of Indians and many young people like them, which are 70% of Indian population, will grab demonetisation with both hands. Because it opens new opportunities we do not see in rich vs poor, short vs long term, election win vs loss debates.

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