Pandemonium. No other word can suffice, really. Long queues snake out of banks and out onto the streets as people struggle to exchange their now invalid currency. Who are the people in these queues? The lower middle classes, no doubt; our teeming masses who have no access to electronic transactions of any kind. Narendra Modi's move has been hailed as historic, but as the exhausted, harried faces of the public come into view when you approach the serpentine queues, one does wonder if it's worth it. Yes. It is.
India is up for some trying times ahead - demonetization and GST will see to that. The problem, however, lies in implementation and not with the concept itself.
People with bundles of cash stashed away at home will find that their ill-gotten efforts have been wasted. India's economic fate has been significantly darkened by her shadow economy and it will be hit. Hard. Modi's timing is flawless - the decision came with the UP elections just around the corner. The heaps of black money stashed away for campaigns will now be of no use! Temples are seeing a wave of popularity as the corrupt throng their gates trying to dispose of black money in the ever-forgiving handi.
Those who are intended to suffer will actually do so. Terrorists and criminals engaging in Hawala operations will find it exceedingly troublesome to get their work done. And that's a good thing. That being said, it would be terribly wrong to undermine the hardships of the aam aadmi, what with the struggle to get rid of old currency and the challenges of breaking a Rs 2000 note.
Banks are doing everything in their power to deal with the sudden influx of customers, working overtime, through weekends and setting up additional counters to hand out change. The currency crunch, however, has left them with no choice but to issue Rs 2000 notes, which has hit the common man harder than we would like to accept.
For starters, the government's move triggered widespread panic on the streets. This is very disheartening to witness, because things could have been done right. Procuring our daily necessities like milk and eggs has become a near-insurmountable challenge, especially for the lower-income groups. Why weren't these things considered before the decision was taken?
ATMs, unsurprisingly, are running out of cash as well, only compounding banks' woes. Smaller traders struggle to conduct their everyday transaction - what does a small-time vendor do when even banks run out of currency?
The middle class, despite its incessant complaining, has a much easier deal. The use of debit and credit cards is widespread enough to make this transition a fairly smooth one for the plugged-in Indian. We can go to shops and restaurants that deal in electronic transactions, after all. It's the people without any of these privileges - thousands of people in this country don't even have a bank account. Where do they go? To whom can they turn? The only class of people who profit from this are the larger traders.
The Goods and Services tax, which will be rolled out soon, will cause the next big flurry. It is likely to send up the prices of many goods and commodities and the Income Tax department will have to make huge changes as well.
The move to demonetize old currency notes hit like a tsunami, sweeping away the foundations of our economy. Private hospitals, despite being responsible for a service as basic as healthcare, have refused to accept old notes. Post offices are staggering under the weight too, simply unable to match demand of this magnitude.
Still, there is a silver lining. Despite the short-term challenges, there is much to hope for in all this. Indians don't bat an eyelid at the thought of waiting six hours for a glimpse of Lord Tirupati, why then, do we balk at the idea of spending an hour at the bank? Perhaps the need to complain has been ingrained into our culture!
The government could have arranged for extra currency. Solutions can be put forth liberally now and it won't change a thing. All said and done, though, I support this move by the Narendra Modi government, because despite a failure in implementation, it will achieve what it set out to – root out the underbelly of an otherwise flourishing economy.
— The writer is President, FKCCI As told to Rohan Ramesh
