Apropos of the report “Centre demonetises R500, R1,000 notes” (FE, November 9), the fact that the prime minister himself took the trouble to announce the demonetisation of the currency notes of R500 and R1,000 denomination from the mid-night of November 8 shows his government’s seriousness in dealing with the menace of corruption, rampant generation of black money apart from dealing with the counterfeit Indian currency that is being pushed into the country from across the border to destabilise the economy. While this surgical strike on the black money must be lauded for its intent and purposes, there are several areas of concern, too. For instance, the PM’s claim that “you will have 50 days to deposit your notes and there is no need for panic” rings hollow. What he does not talk about is the ‘intervening’ holidays on account of the second and fourth Saturdays (for banks alone) and Sundays for both the banks and post offices apart from other scheduled holidays, thereby significantly curtailing the operational window for availing the exchange facilities. No wonder then that people are getting restless and worried. Further, are banks and post offices administratively prepared and capable of efficiently handling the huge rush of the panic-stricken people across the country? Media reports also show that the people are struggling hard to settle their payment transactions (in old high-denomination currency) at various ticket-booking counters of the Indian Railways and also at petrol pumps in the absence of the availability of various small denomination notes. Moreover, the vending staff at some of the petrol pumps are asking for the ID proof. One wishes that all such practical aspects of such a well-meaning scheme should have also been taken care of before getting it on to launch-pad. Why is the common man being made to face the brunt of the government’s ill-preparedness?
Kumar Gupt, Panchkula (Haryana)
Apropos of the report “Centre demonetises R500, R1,000 notes” (FE, November 9), prime minister Narendra Modi’s sudden surgical strike the 500 and 1,000 rupee notes is aimed at weeding out corruption and black money. India is a country with 1.3 billion people—hardly 10% of the population, including bureaucrats, businessmen and politicians, will have black money, not the entire population. With this bolt out of the blue, all people suffer. The 1.3 billion are not all part of the digitised formal finance ecosystem—today, a small fraction of the people use paper-based cashless systems while an even smaller fraction uses mobile wallets, online transaction? What about the rest? A huge chunk of the population are farmers; what becomes of them? What will happen to the road-side vegetable-sellers, fruits-vendors, etc? They definitely are not familiar with mobile wallets like Paytm, PayU Money, etc, neither do they swiping machines. Even though the Modi government launched the Jan Dhan Scheme, many people still don’t have bank accounts. What will happen to them? Where will they exchange their money? Those who have bank accounts, they can exchange their money or deposit in their accounts and will use cashless payments through card, swiping machines. What about those who don’t have bank accounts and don’t use any mobile wallets? This decision will impact the overall Indian economy. Modi’s decision was to curb black money, but he should have realised it can’t be done in overnight. To be honest, it will only increase in future. All mobile wallet companies stand to benefit the most, for at least the next one week. At petrol pumps, users are asked to fill petrol for either R500 or R1,000; no change shall be given. While the impact of this will especially be felt by the real estate industry, where prices could crash heavily, this will also affect banks as many real estate companies are heavily leveraged. ATMs and banks remaining closed is also a hassle; if one throws in all the second and fourth Saturdays and Sundays and scheduled holidays, getting notes exchanged at banks will be a pain.
Vasanth Kumar J. Shivajinagar