Demonetization

   Demonetization – the term that shook the nation by surprise and which occupied headlines in every type of media. Not just that it also dominated most of the space in public gatherings. I was fortunate to be in India when such an announcement was made. Let me brief you on my experience during this earth-shattering announcement from PM Narendra modi ji. I was in my native attending sister’s marriage and whoever recognized I was from USA asked me whether I am missing my vote in the high-octane US elections without realizing I am not eligible to vote and I am no way closer to the eligibility. Everyone was curious who will win as if I am well versed in astrology. But this being on one side around 8.30pm on November 08^th, Tuesday the announcement came saying that 500 rupees and 1000 rupees notes will be mere paper after dec 31^st of 2016. Gossips, banter, shock all started to come from all corners since this is not a forwarded message. Videographer pulled me and showed his phone and it had how 500 and 1000 rupees notes used to fill ground nuts. The creative minds who does forwarded messages should seriously consider getting into cine field since their creativity is good enough to make some good movies. Anyway banks were announced holiday on Wednesday (November 9^th) for it to get ready for the busy days ahead. If there was a survey on human interaction, then I bet November 9^th 2016 would have topped the list in this digital era since every single human being wanted to interact with as much people as possible to get their insights. After the shocking news on Trump’s victory in the morning the only thing that could have made me happier was ‘Food’ and thoroughly enjoyed athangudi perumal’s breakfast.

  Let me point out what are the misses from this move

(a)    When Prime minister of the nation makes an announcement through national media of such a move then what is the credibility of Indian rupees? No law, no reform and a mere announcement gives a bad brand image to Indian currency

(b)    Consumer spending could be less since people want to safeguard the notes for emergency; I visited a medical store in Thirapathur on November 9^th evening to buy a medicine and shopkeeper either doesn’t have change or doesn’t want to give change. 100 rupees notes were suddenly treated like mango lassie in Sahara dessert

(c)     Value of money suddenly increases and with it comes the value of debt which also increases. It makes it more difficult for the debtors to repay their debt

(d)    It also resulted in mad rush to buy other investments like Gold since people had to convert the cash into something tangible; Due to demand the prices increased much beyond than its original price

(e)    Unaccounted cash can be converted into expensive gifts which again makes the gifts go skyrocket in price due to demand than its original value

(f)      I saw a post in FB where Chetan Bhagat said he had to buy all the balloons from a balloon seller who was having tough time selling any due to the cash shortage; India is about these people do who make small money to make their ends meet. The people below poverty line is affected the most since they thrive only by cash

 I personally liked the move and see this as a bold step towards the right direction

(a)    Black money is a very common scenario in a country like India and the move will no doubt help to eradicate black money (not from all but at least from many)

(b)    Counter tax evasion – generate more tax revenue for government since underpayment of taxes will be prevented

(c)     In a land of forgery counterfeiting currency has become very common and the move will help to prevent counterfeiting of currencies

(d)    Terrorist attach groups will not have fake cash to attack our country

(e)    Corruption may reduce significantly due to lack of currency notes

(f)      Local groups who cause petty fights might be discouraged to get into violent acts since there is no cash to award them.

  We can argue both ways but if we want to transform a country and get into a clean state then we have to address things at a grass root level. People believe notice must be given and we all know if a notice given on this regard how many protests we would have seen in the country. The message reached across the length and breadth of the country and this was evident for me since I got a receipt for my purchase of snacks from a small shop run by achi in Venthampatty. The transition is going to be a tough one especially since illiteracy rate for india is still very high. But once people get a hang around then day to day operation will be smooth; Believe me some road side shops generate lots of revenue too – I know a parotta shop in Trichy who has been in business for 30 + years now and I always relish his egg parotta since childwood. This man per my dad owns lots of houses and business is driven purely out of cash. Likewise there are many whose business may appear low profile but may be far lucrative since no tax is paid. Use of credit cards, machines, online accounting, customer service, banking service, application forms all are going to take some time for the common man to sink in but once transition is done we could see a bright, clean and powerful nation …right now it’s in the making.