On 8th November, 2016 Prime Minister of India, Narendra Modi announced the ban of higher denomination currency of India. 500 and 1000 rupees currency notes were banned for the proposed goal of countering corruption and black money in India. The thought is noble and the aim is beneficial to our country. However, the planning done for such a big move leaves a lot to be desired.
Certain details about currency usage in India:
- 80% of Indian currency in use is in the denomination of 500 and 1000
- More than 90% of the daily transactions happen in cash
- Around 80% of the Indian population are from rural areas where connectivity, internet, heck even food supply doesn’t meet the demand
- We have very few (relatively speaking) printed currency in the lower denominations
- Blue collar population of the country still gets paid daily/ weekly wages in cash mostly in the higher denomination currency
- Around 80% of the population doesn’t have debit/ credit cards. Let’s not even go to e-wallets and the likes
I understand that the secrecy of the ban was crucial for the success of the plan to eradicate (that’s not possible, let’s just say minimize) corruption but our government could have printed more currency in the lower denominations which would have been useful for people who depend on daily wages for food and other necessities in life.
During elections, the government ensures that each and every district and area has polling booths which are accessible by the large population of this country because each vote counts. Similarly, efforts could have been made to ensure grass root level initiatives for successful distribution of the new currency and the lower denomination currency so that no one suffers or starves. Each life is also important.
The government ensured that they made hospitals an exception to the ban for a certain period to avoid causing more trouble to the grieving families. But we would have been more relieved if another similar exception was made for food. Government could have let rations accept the old currency notes so that no one in this country die of hunger because there is no new currency available.
The decision to print/ disseminate the 2000 currency notes first added more resentment. Many people after standing for hours in queues outside banks and ATMs received the new currency note (adhering to the daily withdrawal limit of 4000 which has now been reduced to 2000) but no one is ready to accept it because no one wants to part ways with the lower denomination currency. The new currency is like a talisman/ mantra that some carry in their wallets for luck and fortune but it doesn’t help you to buy food!
The aggrieved Indians are still eagerly waiting for the release of the 500 currency notes to fill the increasing gap between demand and supply because of the lack of cash.
Recently the government decided that people who are getting married and their families should not be affected by this sudden move and so extended the daily withdrawal limit by 12500%. However nothing was done for those who have small businesses – 90% of which runs on cash.
Businesses like vada pav stalls, sandwich stalls, grocery vendors, hawkers and many more. They are suffering because no one is willing to buy from them. Again because no one wants to part ways with the lower denomination currency. I know people who are not able to pay fees of their children because the school doesn’t have smaller currency to give them in change after they try to pay fees with the 2000 currency note. Kids are not going to school; their parents are not earning/ getting any money. People are suffering. India is suffering.
People in tier 1 cities can survive on plastic money and e-wallets and cards but unfortunately that’s a very small part of India. And that’s where I think the government lacked the foresight and forgot the real India.
Let’s try to end corruption and not innocent people, their lives and livelihood.