By Our Reporter
SHILLONG: Over a week after Prime Minister Narendra Modi announced the demonetisation of Rs 500 and Rs 1000 notes, people are still seen queuing up in ATMs and banks struggling to get hold of the “elusive and priceless” 100 rupee notes besides the newly minted Rs 2000 note.
However, despite the hardships endured, many of the people in the city have by and large welcomed the move that is aimed at curbing black money.
In this regard, The Shillong Times spoke to Natalie West Kharkongor, president of Meghalaya Economics Association and associate professor at IIM-Shillong.
Kharkongor pointed out that “black money will now be converted into white thereby leading to more investment, employment and income.”
Stating that the country has been fighting to eradicate corruption and for taxpayers to reveal their income she said, “There are many people who have evaded taxes. The black money that was outside the accounting stream will now be taken into account with this approach by the Central Government.”
“Such a move will help the country in the development processes… In the current situation, money, which was otherwise enjoyed by a handful of people, will be used for the betterment of all including the rural population,” Kharkongor said.
Highlighting more on the issue, she said, “There will be high economic growth because of transparent transaction. Contrary to Gresham’s Law which states that bad money drives out good, in Modi-nomics, good money will drive away bad money in.”
However, she said that the creation of chaos, shortage of smaller denomination notes etc., has been a demerit in the entire process. “But it will be short lived. Economic analysts did not take note of the situation. It came as a shock. Within 2-3 months it will be back to normal again,” she said.
On shops witnessing fewer customers, Kharkongor said that in the present scenario consumption is bound to decline. “The equilibrium point will depend on how much the government can arrest the situation,” she said.
She lauded the Prime Minister’s drive against black money and termed the decision as a well-planned one.
Replying to a query on whether the exercise will catapult India to the ranks of fast growing economies in the world, she observed that driving out black money is not the only factor for economic growth. “India is not ranked high in Human Development Index. The overpopulation scenario has eaten into the benefits,” she said.
“If we can tackle black money, we will heal the country of a disease. The process of cleaning up the country is not easy, and surely not an overnight task,” Kharkongor said.
Commenting on those who are oblivious to banking transactions and preferred to stock their money at home Kharkongor said, “If it is white money, they have nothing to worry about.”
The IIM-Shillong associate professor is currently conducting a research on Green Economics which she said is against corruption, black money and illegal activities.
Shop owners in a spot
Meanwhile, this reporter spoke to owners of high end fashion stores and sellers of second hand garments to get their reaction on the development.
“It has hit the business as there is less cash flow into the economy. Shortage of smaller denominations is an added trouble,” the owner of a garment store said.
When asked whether the PM’s decision was a good move, he said, “We will see how far it helps to curb black money. It is something we shall figure out in the long run.”
Another manager of a store said that shortage of hard cash and smaller denominations is causing a problem.
Sellers of secondhand garments, who usually do brisk business selling warm clothes at this time of the year, said, “The decision has affected the poor. The sales have definitely taken a hit post the demonetisation move.”
