"Remember, Remember, Remember, the Eighth of November" was the slogan buzzing in almost all the news television channels of India, when the honourable Prime Minister of India launched a major surgical strike against the so called "termites of the nation" in consultation with Governor of RBI and a handpicked army of Union ministers. But, the aftermath of this flagship policy has affected the country in multiple fronts and has had many short term consequences.
As soon as the policy was announced by the prime minister in his address to the nation, there was a long queue outside the ATM's where the general public was patiently but stressfully waiting to take out cash in the denomination of 100's by using their so called jugaad. The bank branches were opened to the general public after two days of holiday, again a long queue was witnessed there with the longest found in the branches of SBI, the banker to every Indian. Since the announcement, the banks have been flushed with deposits and the latest figure being 11.87 lakh crores. Economists suggest that over the long term inflation will cool down and lending rates will fall which is indeed a healthy sign for a developing nation amid global slowdown post the 2008 crisis. Many notes are yet to be replaced and sources suggest that the new currency has been replaced to the tune of 4.18 lakh crore. Undoubtedly this policy has given an impetus to online transactions and has been a harbinger of "acche din" for E-wallet companies like Paytm, Freecharge, Jio money and other players. While collections of films screened during the second and third week of November has been worse and mostly all have gone flop. To tackle the hassles of cash strapped economy the government has launched mobile transfers though USSD codes where cash up to rupees five thousand can be transferred through it.
Politically, this has been a surgical strike on Uttar Pradesh elections, where the contesting parties have cash chest filled up with old currency, reserved for campaigning. Most of them are clueless about their strategy for replacing their chest with new currency since a major part of it constitutes for unaccounted money coming from business houses and mafia's. Small political parties are worst hit since they get mostly funded through cash rather than bank demand draft or cheque. Demonetization has also become an agenda for the opposition parties of the union government to get into limelight through openly criticizing the move of NDA government on grounds of unpreparedness, policy loopholes and lack of Infrastructure with the central bank.
On the societal front, this policy caused panic among the public in the initial days but later it cooled down, many cash based businesses have been affected like Restaurants, Grocery Stores, Street Side Paan Walas and others. Of course we cannot accept them to take payment through cheque. Though, the advent of mobile wallet has curbed this issue to much extent where they are trying to reach out to every single outlet. Winter also marks the advent of wedding season and Indian weddings are a ball game of cash. As a result many scheduled weddings have got delayed, some cancelled. Especially the salaried class people are reaching late to their offices because they have to join the queue in banks early in the morning with the hope of getting at hand some newly printed notes. Not to mention housewives have also been hit due to demonetization and are also joining queues to replace their unaccounted money sidelined from their husbands. This move of the union government has also created a buzz on social media with memes flooded on the social networking websites and celebrities welcoming the move.
Overall, it is an excellent move of the government of India as it will reduce the presence of unaccounted money from the Indian economy, stop terrorist funding through counterfeited notes, bring more deposits in the banking system, increase the tax base of the country and these are signs healthy enough to put India in a higher growth trajectory. Although there are ill effects of demonetization in the short run but I hope that we all fellow citizens of India can bear a little bit of pain today in order to welcome a bright and prosperous future tomorrow.
- Aman Tiwari