15 November 2016
In a surgical strike, Prime Minister Modi demonetised 1000 and 500 rupees notes to fret out the black money which was hoarded over 70 years. Since independence every government was corrupt. Modi’s intention is good. Progress of India heavily depends on eradication of corruption.
It does not matter what the opposition politicians say. Because they are all corrupt. PM Modi has been clean enough and bold enough to make this unprecedented move, which no her political party would have done. We also should ignore the pundits who say that demonetisation by itself is enough to deal with black money. They argue that clever people will find loopholes to get their black money encashed. They also argue that some have already converted their black money into gold and properties. So, what do you do? Wait another 70 years to deal with the black money!
Hardship to the public is another matter. Today is the seventh day after demonetisation. The rush at banks and ATM’s has not abated. People are waiting in the queues for 4 hours and more. This is unacceptable.
It is the fault of Reserve Bank of India (RBI) for not planning the demonetisation meticulously. Now they say they will need 3 weeks to reconfigure their ATM machines. Why did they not tell this to Modi before his announcement? Already pictures of the new 2000 rupees’ note has been circulating on the internet. Besides there is nothing new in issuing new notes. Other governments do this routinely. RBI could have had the ATMs reconfigured without letting out the secret of demonetisation.
Micro ATMs could have been established in places like post offices and railway stations. Big corporation and factories could have been authorised to exchange a certain number of old notes for their employees.
They should have trained more people to refill the ATMs and to recalibrate them. The ATMs could then have been refilled several times a day.
RBI knew that 80% of the money in circulation consisted of 500 and 1000 rupee notes. They should have known that exchange these notes cannot be done within the time frame set by PM Modi. They only kept repeating like a parrot that they have enough currency notes to replace the old notes. This only irritates the people more. What is the use if you sit on that hoard of money? What is needed is to get these notes across to the people. They must have prayed for miracle!
It is also not necessary to get every cent of the black money. It is good enough to catch the big fish – corrupt politicians, high level administrators and big time tax evaders, who had made millions illegally. Let a petty official or a police officer keep his “coffee money”. This small amount is not going to cripple the economy.
Because of this lack of planning PM Modi made an emotional appeal to the public to diffuse the crisis.
Financial Intelligence Unit (FIU-IND) had upgraded its servers to analyse Cash Transaction and Suspicious Transaction in real-time. This system will catch even the sophisticated black money operators. Spurt in activities in Jan Dhan accounts will also be closely monitored. Earlier the government announced that the banks will need to report only transactions above Rs. 250,000. But with this sophisticated system it is possible to identify suspicious transactions.
Related article: India: Modi’s Boldest Move to Crackdown on Illegal Money
India: Woes of demonetisation
15 November 2016