Saturday, November 19, 2016

Demonetization – Not Quite the Demon

People who visit the temple-town of Sringeri, the famous seat of learning situated amidst the lush green hills of the Western Ghats, swear not only by Goddess Nature who has endowed so much to the place but also by a shop located in the vicinity of the temple. 

The shop is run by Sri.Vijayanarasimha along with his wife and son. It deals in the usual rich goodies that Malnad has to offer - various varieties of pickles and chutneys, chips, spices, oils and what not. While other shops can boast of the same quality of goods, what sets this shop apart is the savviness of the father-son duo. They develop an affectionate connection with the customers. I do not know how they do it, but they seem to remember customers and their choices in spite of having a large number of them. When net banking and online fund transfers were still in their infancy, they had a mail order system which enabled people to transfer money to their account online and get stuff delivered to their houses, all from the small town of Sringeri. Actually, make it the other way round. They would deliver stuff to your house, and you could then transfer money to their account. And yes, all from the small town of Sringeri. Their account was one of the first recipients I added for fund transfer from mine. 

As the various news outlets were publicizing and highlighting the difficulties undergone by the "aam aadmi" due to the demonetization of 500 and 1000 - rupee notes, I could not get this small store ( not so small now, bless them; they now have online sales also) out of my mind. Why is demonetization hurting us more than it ought to when transferring money is so easy? All it takes is honesty and trust!

We can't deny that the news channels and the English language newspapers had their own agenda in maligning the initiative of the government and this contributing to the confusion. The queues which were still manageable a day after demonetization grew longer and longer, owing to the panic willfully stoked by the media. False reports of people dying in ATM queues and of children dying because the older currency was not accepted were feverishly circulated by journalists themselves in the social media. One news channel shamelessly asked people to send videos of people suffering in queues. The situation truly started going downhill then.

It is a very Indian - nay, human mentality to stock up on or even hoard things when they promise to become scarce. It is programmed in our genes. And human history has been proving that the hoarders will, in a large number of cases, eventually be better off than the non-hoarders. After a couple of days, thus, our instincts got the better of our good sense and the queues outside banks became longer still.

The black money mafia also did their bit to make the situation more chaotic, by promising commission to people who would deposit money in banks on their behalf. There were many flavors of this scam. Paytm ads notwithstanding, a substantial percentage of the low-income group is gullible and this promise of easy money is too hard to pass by. The result was unprecedented chaos, with people standing multiple times in queues and fights reportedly breaking out in front of the banks, adding to the general disorder.

There were many things that could have been done to reduce inconvenience to the people. Obviously, the initiative has to come from the people first. There were people drawing money from three or four cards when it was their turn at the ATM, adding to the wait time for the others in the queue. Banks could have mandated that only one card could be used at a time. Also, people who could get by with plastic money could have done so for a longer time instead of standing in queues and complaining. Let us face it, waiting is not pleasant for anyone – for us and also the bank employees. The security guard at the HDFC bank near my house was so cheerful and helpful even after dealing with hundreds of people who only had questions and complaints. Yes, that is another thing that would have helped – a smile of acceptance on the faces of the people. Because however much we try to argue against it, we know that this move of demonetization of high-value notes is going to be eventually good for the country.

If shop-owners had accepted cards and cheques it would have made life a lot easier for everyone. The day after demonetization, I was out shopping for some lamps in a respectably-sized shop in the heart of Bangalore. The bill came up to a decent amount of around 400 rupees. I offered to pay by card, but the shop-owner did not accept cards. And no, cheques were not accepted either. I did not have cash on me. After a lot of haggling over the mode of payment, the shop finally accepted the five-hundred-rupee note that I offered. I later learned that the cash transactions are not logged properly, so as to avoid tax.

So that's the root of this evil. With the memory of 97% tax and no development etched in our minds, we cannot bring ourselves to pay even a reasonable 35% amount as tax. And when the government does what it has to do to recover taxes we whine and complain because it is inconvenient. God help us!

In contrast, some people rose to the occasion and started conducting more cashless transactions. I paid my kids’ music class fees via online transfer. By the way, the teacher happens to be a housewife.

Finally, I recall the infamous words of a departed politician, said at a different time in a different context but completely valid now. When a big tree falls, the earth shakes.

1 comment:

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