Prime Minister Narendra Modi’s bold move to demonetize high value currency notes to curb black money and corruption signals his resolve to take on high and mighty ignoring political minefield. When the Prime Minister suddenly announced demonetization of Rs 500 and Rs 1000 notes on the evening of November 8 leaving people stunned, including his staunch supporters, there were much fears and misgivings. Almost two weeks since, there is slow but steady realization among people, especially the poor and the middle class, that the move is for cleaning the mess of black money and corruption which seriously affected the nation.
Queues outside banks and money dispensing ATM machines are getting shorter and frenzied reactions of people are giving way to reasoned conversations about the long term benefits of the measure. It is not to say that the Government has been able to sort out all issues concerning demonetization and that everything is falling into place. Although there are still some grievances of the common man, yet the government continues to address all the issues one by one to mitigate their difficulties. For instance, at the time of writing this article the government has announced another relief measure for the farmers who were finding it difficult to buy seeds for the current Rabi season. Now the government has announced that farmers can now purchase the seeds in old currency notes of 500 rupees for the current Rabi crop from the Seeds centers belonging to State or Centre’s PSUs.
As Finance Minister Arun Jaitley had said, the initial difficulty was only to be expected because advance arrangements could not have been made on account of the highest level of secrecy involved in the move. Immediately after the announcement, however, the Government got engaged in providing necessary infrastructure like moving new bank notes to remotest places as also recalibrating the ATM machines across the country. Banks immediately got down to a massive operation of exchanging old notes and dispensing with new ones with all resources at their command.
True, the exercise is gigantic in proportion to the problems that the measure is seeking to address. According to all official estimates and studies by the academic and professional bodies, there has been a parallel economy of black money in the country for a long time now. The Government loses revenue on account of this parallel economy and ordinary law abiding citizens bear the brunt in term of increased taxes and intermittent inflationary pressures. Yet another serious malaise afflicting the country was that of counterfeit currency. It aided and abetted the terror financing from across the border.
Ironically, there has been a lot of talk about the malaise of black money in the country and the resultant corruption. However, it is only now that someone has dared to take any serious action in this regard. Prime Minister Narendra Modi, therefore, needs to be complimented for daring to take the bull by the horns. He promised to take action against black money and corruption during his election campaign. Even after taking over as Prime Minister, he reiterated his resolve and finally did it.
There has been all-round support for the Prime Minister for taking this bold step. However, in this article we would like to mention what Shri Hukumdeo Narayan Yadav, Chairman of the Parliamentary Standing Committee on Agriculture, has said about the move. Welcoming the demonetization move, Shri Yadav termed it as a revolutionary step by the Prime Minister. Expressing his gratitude on behalf of the poor, the farmers, the labourers, the backwards and Dalits, Shri Yadav, a former union minister and five-time member of Parliament said that the measure would strengthen the country’s economy by better financial discipline and generate employment for the needy and the dispossessed. He said it would “create the India which Mahatma Gandhi, Ram Manohar Lohia and Deendayal Upadhyaya had dreamt of.”
There may be several pros and cons of the measure and several experts may have different views about the measure but in the ultimate analysis, all seem to agree that the step in the right earnest with good intent.
The enormity of the task can be gauged from the fact that the total demonetized banknote numbered 2300 crore pieces. According to estimates, the printing itself could take at least three months. Add to this the job of transporting them to all corners of the country.
By all accounts, it is more than the proverbial Herculean task. The Prime Minister has sought just 50 days to bring the situation to normal. In the interest of the nation of 123 crore people and its economy, the second largest in Asia, it is time for every patriotic person to give a helping hand. This is an unprecedented situation and cannot be compared to the demonetization exercise undertaken by the Government in 1978 because of the sheer size of the economy.
Parliament is in session seized of the matter. Political sagacity and maturity political parties have never been in doubt when it comes to tackling issues of national interest.
Devsagar Singh is a senior journalist and regularly writes in major dailies on economic issues. The views expressed in the Article are author’s own.