IS Demonetisation Justified?

November 25th, 2016 | by Pranab Kumar Chakravarty
IS Demonetisation Justified?

INDIA’s 1.25 billion plus populace are thankful to the media and opposition parties for highlighting the plight of the commoners in the wake of the demonetization scheme announced on the night of November 8 by the Prime Minister. Millions of people were forced to queue up in banks and ATMs for hours and the issue was also debated in the Upper House of Parliament in which several leading lights representing the opposition benches participated. They are all are against unaccounted money and had been calling for unearthing such illicit wealth for years.  But while expressing their points of view in and outside Parliament on demonetisation they seem to be lampooning and caricaturing the Government branding them as a bunch of robbers committed to robbing the masses. Even the noted economist, who had headed the RBI and the Ministry of Finance before becoming PM for almost a decade, has no suggestion or advisory to lessen the people’s hardship knowing well that the ongoing demonetisation process cannot be stopped abruptly.

Prime Minister Narendra Modi’s bombshell as his loyalists say has knocked the snuffing out of the four demons of black money; corrupt wealth, terror money and drug money in one go. It is indeed as asserted by several honchos as well macroeconomists that it is a landmark decision to demonetise 500 and 1,000 notes. People by and large have supported the unprecedented move. Black money, corrupt money, terror money and drug money are   hurting the country. The one reason for terrorism in Kashmir and North-East, and Naxalite movement is that the supply of money. This also includes fake currency notes. Fake currency coming into India from Pakistan is not something new. The impact of the decision was clear as many people started throwing fake notes into canals in northern India. They cannot account for the ill-gotten money.

Media reports in some places black money holders tore notes and threw in a canal. Those were not real notes, they were duplicate notes which were torn and thrown in. What else they could have done to escape the dragnet of Income-Tax sleuths?

The Defence Minister  and the Union Minister for Home Affairs have gone on record saying that an enemy country was trying to destabilise India’s fast growing economy by pumping in fake currency worth thousands of crore. Seasoned Opposition leaders including the ex-PM cannot feign ignorance of the circulation of counterfeit notes by India’s western neighbour. Intelligence sources had alerted the GOI long before the incumbent dispensation came to power that India’s enemy was trying to corrode its economy by sending in these fake notes from Bangladesh, Nepal and Kashmir borders as well as other routes.

It is not just about carrying out small strikes in Kashmir and killing people, but they were carrying out economic assaults too. It is noteworthy that the government has unleashed a slew of measures to promote digital transactions. It asked banks to completely waive charges for the use of debit cards. Banks have accepted the advisory as e banking and online shopping are becoming popular among the younger generation. Digitised economy is in the interest of buyers, sellers as well the bankers.  Buyers will not be required to carry huge cash for transaction at the risk of being pick- pocketed or robbed. One travelling by public transport including inter-state bus service, trains and flights may recall how travellers guard their valuables including wallets and are scared of even going to washrooms. Considering the factor, digitised economy should be promoted and this is what demonetisation process is endeavouring to achieve.PM Modi has repeatedly championed digitisation of India’s economic activities so that everybody including consumers, producers and bankers can have win-win situation. They have nothing to worry about and lose and the CAs and I-T people will not be after anybody for leading a hassle free life. But while promoting digitalised economy, the interests of mom and pop store owners and farming community should not be overlooked. Digitization of the mandis has commenced and has made headway. We have to willy-nilly accept the new economy or perish.

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