By Patricia Mukhim
In terms of news there couldn’t have been a better week than this. First it was Prime Minister Modi’s swift surgical strikes against black money and terror funding followed by Donald Trump’s win as the next POTUS. The first news was received with shock and awe. Shock because of the repercussions, especially if one has enough money to hoard. Awe because of the secrecy of the whole operation until Mr Modi announced it himself. The surprise is the strategy. Hence when Congressmen and women carp about the “poor” being the hardest hit, one wants to ask them if they would like to share some of the wealth they hold in black money with the poor? Why is it that the poor have always been used as the fall guys when people have actually lost an argument? Mr Modi’s attempt at financial inclusion was implemented on mission mode, despite the lethargy demonstrated by banks in reaching out to the last mile. Perhaps Modi nursed this strategy even then. But for people who argue that those without a bank account will find it difficult to change notes the answer is “No.” All of us can exchange our currencies up to Rs 4000 in cash. The rest will have to be deposited to our bank accounts where we can use plastic money to pay for goods and services.
The only problem is that banks need to recalibrate the ATMs after which we can withdraw Rs 2000 only per card up to November 18 after which the limit will be raised to Rs 4000 per day from November 19. However we can withdraw cash against cheques up to Rs 10,000 per day and a maximum limit of Rs 20,000 a week up to November 24. After this date the limits will be reviewed. This will definitely be a pain for big spenders. No wonder the cribbing comes from them. I spoke to many small business holders. Their only comment was that if the Government thinks it’s doing it for the larger good then who are they to complain? The lower income groups like everyone else will face the same problems in the next few days but they too don’t have such a huge amount to change. So we would all be equal in terms of waiting up at a long queue at a bank to exchange the old notes. The other disadvantage for the illiterate would be that they would need help to fill up the forms for exchanging notes so banks would do well to appoint people at the front offices to help fill up those forms.
The reaction of the Congress party to the Modi masterstroke was expected. Here is a party that had danced the tango with many tax evaders and scamsters. Now they are trying to say that the poor will be affected by this new transaction. Can they explain how only the poor will be affected by the latest Modinomics? Will money be devalued? No, it will remain the same. So what’s the problem? The labourers who are paid every week will get their salaries in smaller or bigger denominations. The small businesses will start getting smaller denominations as legal tender. The bigger picture of curbing black money and terror funding by way of making fake Indian currency irrelevant does not seem to matter to those who oppose this move.
It was even more ironic to hear the Meghalaya Chief Minister saying that there are better ways of curbing black money without hurting the poor. Can he list out the strategies he has in mind without of course telling us that prior information has to be given before clamping on the high denomination notes as Modi did on November 8, last. I am sure even a cretin would know that prior information is akin to insider trading information and would result in many people turning their black money into some other colour. But being a politician and knowing the politics of our times I am sure he speaks for all politicians who are used to keeping huge amounts of cash to dole out to prospective supporters for their personal needs. In fact I am sure that several tribal politicians will now have to induce their friends and relatives to open up bank accounts and allow their money to be parked in those accounts for the time being. Why, tribals may even become fronts and open up accounts for many non-tribals who have huge amounts of demonetized cash to deposit their money in. And I am sure the smart ones will do it for a commission!
Speaking about the impact of the Modi move, a Facebook post from a tax man says, “Real estate prices will crash, the haves will purchase this time with their declared sources, mostly with black money converted through the accounts of the exempted (tribals) and those below taxable income. We can only hope that the state of the majority who have meagre sources – daily wage earners, others will improve.” Well, every reform will have its upside and downside and Governments have to constantly find ways to arrest the regressive trends. That it has taken the country several decades to come up with a measure to prevent the black economy from thriving shows political commonsense from a Government that is committed to financial inclusion.
We have by-elections to the district councils coming up next month. I am sure a lot of cash has been stashed by those interested to prove their clout in that election. All that would have become paper for now. It will take some explaining to the banks as to how such huge amounts now need to be legitimised. It will be good to wait and watch the outcome of the December bye-election election!
Meanwhile, coming back to Donald Trump’s win as POTUS, another major upheaval in world politics, a FaceBook friend has a very interesting take. He says, “We have to read Trump’s win in the context that the world has seriously moved ahead to an age of massive disruption in our lifestyle and earning ability, by moving out of industrial era to the technology era. Unfortunately, this transition is also coming at a time, when we are going through one of the most serious economic downturns of our lifetime. There is a desperation in the working class and the millennials world wide. And their Darwinian instincts are guiding them to choose alpha personalities as leaders, by even ignoring serious personality flaws and negative baggage the leaders carried (bigotry, racism, misogyny, abetment to genocide). Commonly, these leaders have appealed to their constituencies by raising rhetoric of xenophobia, changes to status quo and beating liberalism. Not only Trump, this category of leaders include Turkey’s Erdogan, Italy’s Berlusconni (now gone), Phillippines Duterte, UK’s Borris Johnson (who led Brexit) and our own Modi. However, a bit of the futurologist in me says that liberalism is not on the wane. Many of these conservative leaders are likely to fail or would be forced to take recourse to a left of centre of position, as Modi has demonstrated. Liberal issues like addressing poverty or gender equity and socio-economic-political issues like climate change are not going to go away. And a Bernie Sanders and a Michelle Obama will be equally loved by a large section of the masses. However, if there is anything such as the ultimate social standard of ethics and morality, that, unfortunately, will remain Utopian.”
This is a well thought out post and that’s why I thought it merited sharing, more so for many who still believe in the utopian dream that there is place for the pure, the beautiful the just and the upright and that vulgarity and brashness have their shelf life.
