Demonetisation: The Necessary Evil?

In simple terms, it is the withdrawal of a particular form of currency from circulation. In effect however, it has shaken the current Indian economy and the population. Looking at the growth and size of the parallel economy, the high number of non-tax payers and amount of black money being siphoned off, this shock therapy was the need of the hour. What was the aim of demonetization? To fight black money, stop cross border terrorism, curtail flow of fake notes, fight human trafficking, curb inflation and move towards a healthy cashless economy. So why is it that a move that the entire nation proudly supported and welcomed as a bold ‘surgical strike’ is daily losing its support?

Every passing day the intent of a move as immense as demonetisation, that rendered 86 per cent of legit currency in circulation as mere pieces of paper, seems to be changing. While naysayers rubbished the policy from day one itself and doubters ridiculed the move from the very next minute the PM announced it, the biggest supporters of the move have been the honest citizens of the nation who were willing to bear the minor inconveniences to fight the larger malaise. But daily problems stemming from the shoddy implementation are testing the patience of the common man who it intended to initially benefit.

The remarkable step planned to cut the parallel economy to size, but the basic assumption where parallel economy and black money were seen as synonymous is where the problem started in the first place. Every citizen who had saved cash at home suddenly became a potential black money hoarder. Daily withdrawal limits were fixed, deposit amounts were tracked and honest citizens with valid reasons for cash saving were also suddenly threatened with a fear of tax notices. The initial window of 50 days given to exchange your money over the counter at banks and post offices was suddenly curtailed that led to further panic among many who had no banking experience or exposure.

Daily cash for day to day functioning ran dry and mobile wallets became the buzz word. Most wedding celebrations in the country were brought to a deafening halt as bank queues got longer and longer. People who were all for fighting black money in the first two days of the announcement, were dismayed with the implementation and started losing hope when faced with practical problems. The common man, a daily wager, a patient or a senior citizen is being hassled for his or her own cash which could have been avoided with better planning and implementation. Further, anybody voicing their opinion about these genuine problems is instantly shamed with the Jawans at border versus common man in queues argument.

Demonetisation was to be a jewel in the present government’s crown which it surely is so far is. But if a policy impacts the very people it intended to benefit then the very purpose of the entire exercise will be defeated. We can’t be smug and say all is well in the longer run when people are facing genuine cash problems leading to deaths, wasted human hours, unemployment and several others ailments.

The government would do well by not announcing any further changes to the scheme as they had emphatically promised that the common man’s money is safe and there is no need to panic. One of the reasons for various currency exchange schemes floating around is the uneasiness caused by the constant changes in the announced policies.

The government should allow people time till December 30 as was initially announced to let them peacefully deposit their life savings without falling prey to the many false operators on the prowl. Also, the cash shortage should be addressed immediately to ensure that the daily withdrawal limit of Rs 2,500 per person is met without any further hassles to honest citizens.