I was delighted. All those black marketeers had got a bloody nose after Prime Minister Narendra Modi announced demonetization. All those traders, lawyers, doctors who collect cash without bills and accounts
koh shock laga laga. Yeah, I know all the arguments - that this will not solve the problem of black money, that people will find ways around it. But even if they find a way, it's at a cost - maybe 30% or more, which is the reported rate to exchange current black money to newer black money (that gets around demonetization). And then there's the headache of having to run around trying to get this done. So, in a sense, I felt entitled to a celebration at the prospect of many of these cheats feeling at least some pain.
Of course, economically, this may not have been the only, or easiest, or even most effective, policy to combat black money. But it is a step in the right direction, sending a very strong message that the government is continuing its attack on black money. It is also telling offenders that they didn't use the voluntary disclosure scheme to come clean, so now watch out.
As a one-time shake-up, it really shook us up. It was an enormously big political gamble to take, and Modi took it. And he deserves credit for it. And whatever the critics say, a large number of people will not be able to convert all their black money through alternate channels. And any money not changed, as Finance Minister Arun Jaitley has said, is good news for the economy and the government as it will lower inflation.
While it is possible that some of the big boys with a lot of black money were tipped off in advance and aren't affected, let's not underestimate the feel-good factor because many of these crooks had or will lose something, either by banking it and paying tax, or by converting it into new black money at a discount, or just dropping it into the river. If nothing else, they will lose sleep over this - and over the fear that more big measures are coming, as Modi warned on the weekend. Why that's not just rhetoric: there is enormous public support for the crackdown, witness the lack of violence and people standing patiently in queues. So, from a common man's and PR point of view, 9 out of 10 to the government.
Unfortunately, that's where it ends, When politicians hand an idea over to the bureaucrats who have never ventured out of the system, you can bet your life there will be screw ups. How can people who spend their life in the unreal world of Lutyens' Delhi, who are used to sending their peons to cash their cheques anticipate what it would be like to exchange old notes for new ones. Or what limits to apply to withdrawals. Crunching numbers will only throw up a number. People aren't numbers.
After all, most workers in the SME and unorganized sector, including domestics, get their wages around the 7th? The ban on old notes was declared on the 8th. So most hard-working Indians did not have the time to buy their monthly rations, pay school bills, rent etc. Their kitchen shelves were empty, and probably still are.
Yes, it's true that the government was pushed, perhaps the possibility of a leak of the idea, to do this probably a week before it was to happen. The fact that Rs 500 notes are only just arriving is proof of that. So, maybe this wasn't the bureaucrats' fault, but in their planning, this should have been one of the scenarios: that the date could be brought forward.
Where was the playbook? How would the banks deal with a rush of people wanting to change their notes? How do you stop everyone standing in line from the first day? How do banks streamline the process so that less than five minutes is needed per customer? The banks were not ready - they only got to know when the rest of us did. So it was up to them to have a plan. That, quite obviously, they did not do, or do well.
Banks should have been told to spread their customers out over four days in alphabetical groups, with tokens issued on arrival, and senior bank management dispatched to branches to help. Lower bureaucracy should been assigned to banks to check documents, etc. Even now, there is no one system amongst banks. Every manager is doing their own thing.
And why, if they are entering our Aadhaar numbers in the computers, do they need photocopies which then have to be matched with the original and stamped three times? This is a typically mind-boggling bureaucratic idea of having paper records. So then, why have a computer entry? Ostensibly, the computer sign-in prevents you from going to another branch and taking out more cash than you are entitled to. Even for encashing a cheque, they want copies of IDs. But they can match my signature, photo in the bank system, which is what they normally use. BTW, the photocopy guys are delighted! They never had it so good. See the queues out there.
Damage control is important. And slimming down the queues even more important. The government has probably considered giving advances/exchanges directly to their employees, but must have felt that they would be accused of favouring their own. That may be true if it was done in Secretariats but no one would question a waiver from waiting in line for personnel from the armed forces, the para military, the railways, and the police - the largest component of government employees - and in addition, it would ease some pressure. Nor should there be much protest if Class IV employees were similarly dealt with, for the same reason.
Similarly, private companies should be encouraged to draw Rs 50,000 from their current accounts and give their workers some advance. And people with cheque books should draw the weekly sanctioned amount of Rs 24,000 to advance their domestics money as well as put money back into circulation.
That is the most important need of the day. When money reaches the
thelawalas, the
chaiwalas, the
rickshaw-walas, and works its way through the chain, the pressure at the banks will ease and the wheels of the economy will start turning again.
Goodwill is always finite, and while there is huge support for this measure, urgently needed improvements need to be introduced faster.
(Ishwari Bajpai is Senior Advisor at NDTV)Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of NDTV and NDTV does not assume any responsibility or liability for the same.