Call it an “ Honest Mistake “

I am referring to the de-monetization decision of 8 Nov 2016 ( - although , in reality, it was a “ re-monetization “ )

It had 3 objectives :

Ø  Bring all hidden/stashed/un-accounted cash into official banking system

Ø  Curtail fake / forged notes which were used by militants in J&K

Ø  Reduce Black Money – thereby reducing corruption ( or vice-versa ? )

I call it an “ honest “ decision because I do not believe ( even after 3 years ) that the decision was intended to benefit personally, any of those involved in taking it

It is another thing that their desired “ objectives “ may not have realized fully

Of course, all hidden cash did flow back into millions of bank accounts and the Govt came to know , who owned how much money ( - even though to establish , how much of that was Black , would take years of litigation effort ! ) .

Hence the first objective did get served partially

We may even concede that the second objective too got fulfilled to a large extent

But when we take a close look at the objective of reducing Black Money , what happened is what I suspected all along ( - and pointed out in dozens of my emails to the Cabinet Ministers , over the past 3 years )

Viz :

Replacing Rs 1,000 currency notes with Rs 2,000 currency notes, would only increase corruption and the Black Money , because , for any bribe amount, now you need to carry only half the number of notes !

From the following news reports, you will notice , that this is what has actually happened :

 Rs 2,000 notes can be demonetised, won't cause disruption, says Subhash Chandra Garg 

Extract :

Ø  Former Department of Economic Affairs secretary Subhash Chandra Garg has said that the new Rs 2,000 notes that were introduced after the announcement of demonetisation on November 8 2016 have primarily been used for hoarding and could be declared illegal tender. He added that withdrawing the Rs 2,000 notes from circulation would not cause any disruption.

Ø  "It can be demonetised, without causing any disruption. A simple method, depositing these notes in the bank accounts ( no counter replacement ), can be used to manage the process," he said.

Ø  Garg said that the Rs 2,000 notes account for one-third of currency notes in circulation in terms of value.

"A good chunk of Rs 2,000 notes are actually not in circulation, having been hoarded. Rs 2,000 note, therefore, is not presently working as a currency of transaction," he said.

Ø  "India has still a long way to go with more than 85 per cent payment transactions in the country still taking place in cash.

Ø  Making large cash-based transactions costlier and subject to some tax/charge, making digital modes of payments conveniently available at all times and stopping cash handling in the government completely, will help transition our country to less cash and to no cash economy, he said.

"China has done it. More than 87 per cent transactions now take place in the non-cash mode as compared to 12 per cent in India," he added

Households were rebuilding cash stash even a year after demonetisation 

 

Extract :

 

Ø  Demonetisation, announced almost three years ago, on November 8, 2016, was primarily meant to purge unaccounted wealth in cash, but more than 99% of demonetised currency came back into the financial system

 

Ø  A comparison of household savings in cash with total value of bank notes in circulation, which is a stock variable measured at the end of the financial year, makes this clear.

Ø  Between 2011-12 and 2015-16, the year before demonetisation, value of household savings in cash used to be between 9% and 12% of the total value of bank notes in circulation.

     This number was 26% in 2017-18.

 

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Here is what I emailed to the Cabinet Ministers , a few weeks after De-Mnetization announcement on 08 Nov 2016 :

[  For Want of a Nail  /  05 Dec 2016  ]

“ Surprisingly , in all of these sufferings , only a few people are saying :

" Earlier , it was difficult to carry Rs 10 lakh in your shirt pocket because it took 1,000 notes ( of Rs 1000 each ) , weighing a total of 1000 grams ( 1 kg )

Now you need to carry only 500 grams ( of Rs 2,000 notes ) !

In less than a year , Tax Evaders will start " Corrupting " the economy with Rs 2000 notes and we will be back to square one of a new parallel economy - credit cards / debit cards / mobile wallets / PoS - Card Readers , notwithstanding ! "

EVEN AT THIS STAGE , CAN ANYTHING BE DONE TO WIN THE BATTLE  ?

Most certainly !  By putting the NAIL in the HORSE SHOE !

By   " Embracing The Inevitable "

{  http://myblogepage.blogspot.in/2016/11/embrace-inevitable.html  }

Dear Shri Narendrabhai :

It is NOT too late !

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With Ram Mandir / Ayodhya disputed land matter settled by Supreme Court yesterday, let this be your NEXT bold – and honest – decision

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10  Nov  2019

hcp@RecruitGuru.com