Demonetisation fiasco continues to hurt India

Jyoti Prasad Rajkhowa

Even three weeks after the demonetisation of 1000 and 500 rupee notes was announced by Prime Minister rendra Modi and the tall claims made by those responsible for the ‘demonetisation’ and its magical strike on ‘black money’, corruption and cross-border terrorism, the common man, petty traders, farmers, vegetable vendors, rural cottage industries, agri- based business activities, and micro and small enterprises, continue to suffer due to shortage of cash, as mostly, in the states of the North-east, cash of denomitions lower than Rs 2000/- is mostly not available till date (Dec.3, 2016). I myself visited one ATM, in front of Gitagar Police Station, on Dec. 2, 2016, just to draw cash of Rs. 1,500/- Unfortutely, the machine failed to give me that much cash, with a note on the monitor that it was uble to dispense with cash of denomitions of 100 and 500 rupee notes. One day before, I sent a person to the nearest Gitagar branch of the SBI, to get me change of one 2000 rupee note, which, the bank said, it didn’t have. He then tried in two three other banks in the Zoo Road area, but couldn’t get the change. Some days back I sent one cheque of Rs 24,000/- for encashing at SBI, Dispur branch — just opposite the State capital. Although, I wanted change in mixed denomitions of 500, 100, 50 and 20, the bank could give ten Rs 2000 notes and two hundred number of Rs 20 notes. Mind it, if this could happen to a former Governor and a retired Chief Secretary, also a senior citizen, what would be the fate of the ‘aam admi’?

All small retailers, vegetable dealers, fish and meat sellers, grocery shop owners, daily wage earners, milkmen, road side ‘chaiwalla’s across the country do not accept Rs 2000 notes, as they are uble to give change. Labourers, masons, carpenters, plumbers, electricians and others across the country refuse to accept Rs 2000 notes, and so their income is very much down now, living below subsistence level. Can we call this kind of demonetisation people-friendly? If the fincial wizards and the Central Bank of the country, with a huge bank of fincial and monetary experts and the powerful Central government headed by rendra Modi, who talks of SMART governce, failed to mage the limited demonetisation, what would you call them? In which country, such type of incompetence has subjected the common man, the two-thirds majority of the population to continued deprivation and hardships, for more than three weeks at a time and also resulted in more than 80 deaths, including bank officials? The initial days saw serpentine queues across the country at bank ATMs as well as bank entry doors, as a consequence of which several persons lost their lives due to strain for hours of waiting. Many marriages also broke down, affecting mainly the poor and the middle class, who had no cash to pay to small-time vendors catering to marriage receptions.

It also remains a great riddle, why in order to curb the mece of black money, corruption etc., higher denomition note of Rs 2000 was introduced, not thousand rupee note replacing the banned thousand rupee note. Has it not encouraged immediate corruption, leading to stashing of crores of rupees of new Rs 2000 notes, detected in several parts of our country during last few days? In my previous write- ups, in this Daily, I had expressed my apprehension, on that count. Surprisingly, most of the experts participating in the talk shows held by the television channels, nor the print media have questioned rendra Modi or Arun Jaitley or for that matter, the RBI Governor, on the great ‘ratiole’ behind not introducing new thousand rupee and lower denomition notes.

From the much hyped decision of turning India into a ‘Cashless Economy’ like advanced countries, as claimed by PM Modi, the latest buzz has been for a ‘Less Cash Economy’. Perhaps, after realizing the impracticality under Indian conditions, of converting India into a fully monetized economy, due to idequacy of the banking system in the rural India and interior areas of the Northeast, as also unfamiliarity of most Indians with the use of ‘plastic money’, Modi has come down to the realities to a certain extent. But, even for a ‘less cash’ economy, digitalised payment modes have to be simplified and payment through credit cards have to be made attractive, by 100 % waiver of ‘processing fees/ service tax’, reduction of interest rates that presently vary from 24 % upwards. Similarly, in order to universalize the use of credit and debit cum ATM cards, the amount charged as ‘joining fee’ and ‘annual fee’ have to be fully waived; otherwise, the ‘aam admi’ woud be hard-hit by so-called ‘digitalization’. Apart from these, the risks of hacking of bank accounts and likely loss of depositors’ money thereby have to be duly covered through subsidizing ‘risk insurance schemes’. Though Fince minister Arun Jaitley recently announced that, some waiver of ‘bank charges’ would be made available to credit card users, nothing in substance has been declared as yet.

The PM, Fince Minister Jaitley, RBI Governor and heads of all banks operating in India would do well to streamline and make less complex the procedure laid down for online or electronic money transfer within the country, for both intra-bank as well as inter-bank transfers, if they are keen to see India as a ‘less cash’ if not a ‘cash less’ economy. Again, from my own experience, I would show how cumbersome and time consuming the procedure is. Since yesterday, I have been trying, without success, to create a money transfer account in the me of a person, having savings account number at SBI, Jorhat. This will be an intra-bank transfer from my SBI account at Dispur. I set a limit of maximum transfer in one day, as required and filled up all other required details as per the online format of SBI. While doing that, I mis-spelt the middle me by putting a wrong alphabet. After the transferee’s me was approved, I detected the mistake and tried to correct it for several hours, but without success, as there was no provision in the ‘format’ for correcting any mistake. Filly, I sent a mail to SBI Customer Care explaining my problem and asking for a solution. Reply came to my e-mail address, giving me a registered ticket number, but without any solution. So, one evening was lost on that. Today, I made efforts to open a new ‘transfer account’ from the site- www.onlnesbi.com in the me of the same person, inserting the correct ‘middle’ me. Filly, when, I thought that, I could open the ‘transfer account’ to my horror, I found a rider on the screen that, on one day, more than one transfer account is not allowed in the same me. The Bank’s online system failed to detect that, I had given a separate middle me, not the same one as done the previous day. So, after wasting valuable time today also, for the same transaction, I would have to wait till tomorrow and try again for the ‘failed intra-bank transaction’. Well, if that could happen to an educated person like me, one may easily wonder, what an average Indian bank customer would be doing for ‘digital transfer of fund’ within the country. At the level of the Prime Minister or his deputy, the FM, many things are said easily than done across the board.

Again the success of a digitalized economy would largely depend on the availability of 60x24x7 hundred percent reliable mobile and internet connectivity. In the eight North-eastern states, interior and border areas in particular, such connectivity is either not available or where available, is absolutely poor. Recently, I had been to Digboi in upper Assam, known to be housing the first oil refinery in Asia, a booming town otherwise. I could not find 3G mobile connectivity from either BSNL or any private service provider, e.g., Vodafone or Airtel. So, I would ask the PM and FM Arun Jaitley to advise how could one go for mobile wallet or money transfer, in such situation. It is observed that, in most of the advanced economies, monetary transactions are still done in cash, to the extent of about 40% and no country has gone for 100% cashless economy, for obvious reasons. In a developing country like India, with more than 50% people not having bank accounts and not yet ATM literate, one wonders how even a ‘less cash’ economy can be created, just as one cannot make a ba ripe by single blow, as the Assamese adage goes — bhukute kalpakaba nowari. It would also be relevant to know from the Government of India about the impact of the ‘demonetization’ on corruption, black money and terrorist fincing, in concrete terms, including the total amounts seized and confiscated through various raids. FM Jaitley would also do well to highlight the short term and long term benefits to the tion through his ‘demonetisation exercise’.

[The writer is a former Governor of Aruchal Pradesh and former Chief Secretary, Assam.]