Skip to main content

Demonetization part 2 – Demonisation!

Modi’s 50 days will come to an end in 2 days. Will I be able to walk into an ATM and get money whenever I want? Will I be able to withdraw more than the rationed INR 2000? All those small traders in the unorganized sector whose work largely depends on cash exchanges will now be able to go back to making their usual daily money?
The answer is simply, no. I don’t need Urjit Patel to come on live television to tell this but it is just common sense. The 2000 rupee notes are practically useless as there isn’t much change doing the rounds. The new 500 rupee note is collector’s edition. We have run out of 100 rupee notes. And frankly, if you chanced upon 100 rupee notes then you are going to hoard it considering the bleak future. Hence their circulation is very limited. Any other kind of withdrawals is such a herculean effort that unless your life depends on it, you arent going to venture out and get it.
Like the vast majority in the country, I was hopeful that this was a gigantic move. Such a disruptive move taken at such short notice is unheard of in India. I was looking forward to the black money getting unearthed and the plough back of the same into the economy. I saw a debate on NDTV yesterday which pretty much out the final nail in the coffin. The panel had Gurucharan Das and Arun Kumar. The panel also contained Sambit Patra and Sanjay Jha but their views practically offered no more than comic relief. Gurucharan Das made a point as to why the notes printing wasn’t being outsourced. It has been done in the past and would have definitely quickened our process of putting more money in the citizen’s pocket. Nobody really had an answer to it. Arun Kumar pointed that black money as cash is 1% of the total black money. And if you look at the money that has come into the banking system based on demonetization it is about INR 11000 per Indian citizen. That doesn’t sound very black to me. It sounds like a huge inconvenience for nothing.
The other danger is the businesses going on hold. The FMCG business especially in the unorganized side of things has taken a huge hit. Mamta Bannerjee has been crying hoarse about this. There is definite truth to this. The public has been supportive of the prime minister so far even though this rule is draconian. They have been hopeful of the greater good that demonetization is set to bring. I was of the same opinion and since 8 November I’ve been looking for that benefit that I am going to get due to this demonetization and I don’t sense much positivity. The consumer sentiment has been hit in a big way which means spending is set to go down. Two wheeler industry reported a 33% drop in sales. But the worry is the drop in spending for essentials. This is going to push the inflation down and the growth down.

I’d be happy to see a real estate rates crash or a big drop in the process of automobiles or interest rates. Maybe it is early days for that or maybe by the time that happens I would be taking a 35% cut in my salary making the whole drop utterly useless. The Indian citizen has been patient so far but she is turning pensive now. How will the trepidation end? I don’t really know.

Comments

Post a Comment

Popular posts from this blog

Where's the money, honey?

Not much has been going in India apart from demonetization recently. Suddenly people are intrinsically rich but actually poor. The amount of money in circulation has gone down significantly and the bank coffers have gone up by INR 5.5 lakh crores. This was primarily touted as an attack on black money but now it has slowly started disrupting everyday lives of people. http://www.livemint.com/Opinion/RNdxOHenVluYuLx4iCw4JO/Modis-new-strike-against-black-money-backfires.html  This gives an idea of the people affected the worst. They have produce which is not durable and they don’t have people to sell their produce to. People do not have money in hand to buy vegetables and one cannot swipe at a local market. The salaried class who are primarily reliant organized trade for their daily consumption are facing the least disruption. The majority are reeling under cashlessness. Some of the most affected people are 1.        Vegetable vendors in local mark...
Post a Comment
Read more

The Dream

It is important to dream big to achieve something big. I heard this line in a recent interview of Sachin Tendulkar. There is so much power in this statement. That particular dream gave him all the will power to become the most respected sports icon of the country. It’s the dream, a vision that fosters us with a certain scene and people like Sachin dedicate their lives to see that moment become a reality. If you are wondering why am I boring you with such an obvious testimony of a personality that every second Indian adulates, then things are just about to get interesting. I am writing to this to address a certain set of people who don’t have a dream, a la me. I don’t want to be the VP of my Co. 30 yrs down the line. Infact I don’t want to be the VP of any company. I don’t believe in what I am doing. Hence I don’t know what I want. I don’t have any vision of what my future should be like. I don’t aspire to be any one. I would love to see myself being interviewed on TV. But in that progr...
2 comments
Read more

My Plea

Dear terrorist, I am a very harmless guy who works in a Company that has its HQ in the UK (not the US). I am a hindu by birth and believe me I had no control over that. Had I known what future had in store for me I would have definitely requested God to send me to a ‘religionless’ home. If you are wondering what I mean by that, then it means I would have requested God to have me born as a tribal in a remote place in Amazon or somewhere in Greenland. Trust me I still have your good interests in my mind. I won’t be a part of any prospering country or a citizen of the country owing much to its history and diversity exercises some amount of tolerance to these activities. Since the innocence in my birth is settled, I would like to clarify another very important aspect. I admire your religion very much. I totally believe in all that is said in the Quran and am ready to agree that it is the greatest religion ever. I am not sure you want people converted into that religion. Because when you...
4 comments
Read more