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Those hailing demonetisation are only fooling themselves

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Yashaswani Sehrawat
Yashaswani SehrawatNov 18, 2016 | 16:57

Those hailing demonetisation are only fooling themselves

Prime Minister Narendra Modi, in his own words, launched the "biggest cleanliness drive" against black money hoarders on November 8 by announcing the new demonetisation scheme.

This was soon followed by admiration and applause from one section of the society, and chaos and anger from the other.

I belonged to the second category. I had only Rs 200 in cash at that time. As the days pass by and the cash runs out, I am exasperated.

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This is how I - an urban, upper middleclass person who has access to banks and ATMs, and enough money in her bank account to easily sustain for a couple of months - feel. I can't even begin to imagine the plight of those who are even a bit less privileged.

This anger and irritation immediately transformed into a burning fury when I read an article on DailyO stating that most Indians were quite happy with this demonetisation drive.

"Who are these Indians," I asked myself. Just to ensure that I wasn't mistaken, I checked the Twitter account of the author of the article. He had indeed done his research - a Twitter poll (yes, social media, where every Indian is truly represented) revealed that 91 per cent said that it was "now pain, later gain".

This "now pain" is basically standing in long queues for hours outside ATMs and banks (as was mentioned in the article) - and hell yes, that's a lot of inconvenience (which Indians must bear to eventually gain). But what is a mere inconvenience for us, unfortunately, is a survival crisis for more than half the population of this country.

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True, countries like Zimbabwe, Singapore, Fiji and Philippines have demonetised currency, but I am unsure if their situation is similar to the one we are facing.

Here are some basic facts that many have very "conveniently" ignored.

Most Indians lack the means to use cashless alternatives, irrespective of the desire to do so.

The Global Financial Inclusion Database, in 2012, estimated that only about 35 per cent of the population over the age of 15 has an account at a formal financial institution, less than nine per cent of the same group has a debit card, and only two per cent has a credit card.

Before you jump at this and say the figures are from 2012, even the most recent studies (done after Modi ji's Jan Dhan Yojana) reveal that only 53 per cent of Indians have bank accounts, out of which 43 per cent bank accounts are dormant.

Wait, there is more - about 300 million people lack proper identification papers. And the educated Indians know quite well that without these papers, one does not even exist.

Let's take into consideration only those who "exist", and have a bank account.

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There is still an extremely high probability that these people too aren't happy - not because they can't stand in long queues for hours, but because if they do, they might will have to leave some work that day or worse, will not be able to find work at all.

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True, countries like Zimbabwe, Singapore, Fiji and Philippines have demonetised currency, but I am unsure if their situation is similar to the one we are facing.

I think our maids, watchmen, sweepers would agree. And so will the daily wage workers, the chaiwallahs, the rickshawpullers.

If this was not enough to make those happy Indians think and think deep, RBI in 2015 unveiled data stating that about 84 per cent of the total money supply was in the denominations of 500 and 100 - the very same currency that now stands scrapped.

So while you and I can easily swipe our cards and order food and commodities online, I doubt if "most Indians" have that privilege. I'm pretty sure our prime minister Modi ji, who shed tears and who himself is poor, understands what I'm saying.

The implementation of demonetisation, on the other hand, is worthy of another article altogether.

Just to share a short anecdote. I was at a chemist shop the other day in one of the upmarket neighbourhoods of Noida and the person did exactly what the grocery shopkeeper had done. He simply refused to accept the scrapped notes, and didn't obviously have the provision of accepting cards. Mind you, this is a posh locality, and I have a bank account.

As for the argument that this surgical strike of PM Modi will wipe out black money and bring nightmares to the black money hoarders - only six per cent of the ill-gotten wealth is stashed in the form of cash.

Don't believe me, but listen to former RBI governor Raghuram Rajan, who recently said: "I think there are ways about demonetisation. It is not easy to flush out the black money. Of course a fair amount of it is in the form of gold, thus even harder to catch."

Last updated: November 18, 2016 | 16:57
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