Sunday, November 13, 2016

Modi's Bharat has Jan's choked Dhan (#JanDhan) - Demonetization Process coupled with Execution fatigue!

72 hours since the news broke out by our Honorable PM that India's highest denomination would not be a legal tender, chaos broke out. Long queues outside teller machines and branches for depositing their cash in hand for new denominations.

Majorly, people do believe that short term inconvenience is bound to happen but in long term its a good choke for parallel economy conductors. No doubt about it. But this short term inconvenience will last for long. With more than 80% of the money circulated in the economy was in the largest two denominations (INR 500 and INR 1000) execution at the first line of conduct (Banks/Post Offices) should have been given more importance.

Heard and understood lot of views around the Black Money circulation and its impact on the economy and assistance to the bad elements of society and I do back such acts but if this inconvenience of not having money to spend on the ground prolongs, it will be a massive hit.

Black money hoarders are caught red handed and then should get penalized but public at large who assume this to be a short term choke of liquid cash should not be hit for long term.

This choking scenario could have been avoided if the trust deficit between the Government and the Financial Institutions could have been narrowed and top brass of these institutions could have been informed about such massive operations. Their preparedness about massive drives like one which is under consideration is a concern. Infrastructure issues are plunging the confidence in masses about the handling of such events. People are absolutely fine with it, but till when? Patience is running out and Tension is widening.

Denominations' availability is also a massive concern. Headlines in news are flashing that the regulator has supplied enough INR 500 denominations in the market but its availability on the ground is questionable. INR 2000 denominations are moving in hands of public but the second readily available denomination in hand is INR 100. What about the change deficit?

People with informed resources of earning are not appreciating the mechanism. Infrastructural chaos of supplying the new resources and taking off the old ones had to be sorted. My only view- Don't take the patience of public for granted. I do also believe that the stretched hours put in by our banking officials have to be lauded enough. Their relentless efforts to cope up with the pressure is hugely commendable. But again till the time the other logistics issues are not solved they would not be able to support persistently.

Its an act at the right direction but our rural branch/post office penetration should have been taken into consideration before such massive drives. Urban people would find a way in the 50 days to get their legitimate deposits in the system but in rural India it would be task which might need more time than the announced limit of 50 days. Urging the government to look into the matter and do extend if possible the days limit for our rural community rooted deep into the geographies of our country to give them right opportunity to get their savings flown into the system. These communities would not have "E-Wallets or net banking Facilities" and would find it tough for their resources to get it deposited and then withdraw them too.

Hope normalcy settles soon and we would have the new resources flown into the system easily and conveniently and Jan's Dhan gets unclogged.