It has been more than 3 months since PM Modi had announced the implementation of the note ban, and from economists and industrialists to the poor common man, the is still a divided opinion on note ban.
Bajaj Auto Managing Director Rajiv Bajaj recently took potshots at PM Narendra Modi-led government’s move to demonetise high-value currency in the country. Bajaj also criticised the government’s Make in India scheme, alleging that regulatory agencies and government approvals would turn it into Mad in India. Meanwhile, only a day later, industrialist Anand Mahindra and banker Aditya Puri claimed that there an unnecessary demonetisation of the note ban move, and they have taken their stance for the government.
It has been more than 3 months since PM Modi had announced the implementation of the note ban, and from economists and industrialists to the poor common man, the is still a divided opinion on whether the ‘bold and ‘radical’ move by the Central government was a well-thought, judicious and well-implemented step, and whether it would actually eliminate all the existing black money – a narrative which is settled at the core of the move.
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Bajaj, at the annual Nasscom Leadership Forum, had said that the whole ‘idea’ of demonetisation was ‘wrong’ and it is not fair that only the execution has been blamed. At the event, he said, “If the solution or the idea is right, it will go like a hot knife through butter. If the idea is not working, for example, demonetisation, don’t blame execution. I think your idea itself is wrong.” On the Make in India initiative by the central government, Bajaj added, “If your innovation in the country depends on government approval or judicial process, it will not be a case of ‘Made in India’, but ‘Mad in India’. He gave examples of other countries and said that “While the quadricycle is being sold across countries in Europe, Asia and Latin America, Bajaj wondered why a vehicle which is cleaner, fuel-efficient, safer and whose benefits are as ‘obvious as daylight’, is facing problems in India.”
While Bajaj, along with many other industrialists are miffed with the government policies, businessmen and bankers like Mahindra and Puri have openly supported them. Puri, MD of HDFC Bank recently said the demonetisation move is positive in the long-run and the country will continue to remain a bright spot. “Demonetisation is good. I am extremely positive about its outcome. The worst is behind us and the elephant has gone, the tail is left, and, hopefully, it will go away as well, by the middle of the next month,” he said. He also added, “Demonetisation is being demonised for nothing. A Larger base of people has started paying income tax post demonetisation.”
At the NILF event, Mahindra had said that PM Modi has created transparency and traceability which has change the mindset of the people so that they do not go back to their old ways. He also added that the conversion to digital has been much faster because of the move. The positives of demonetisation drive listed out by Puri included more money in the system, a wider tax base, lower interest rates with a possibility of going down further, greater transparency and cost reductions in the system.
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Notably, industrial activity and consumption in India have been deeply affected due to the announcement of the Prime Minister in November last year, to ban Rs 500 and Rs 1,000 currency notes, which accounted for 86 percent of the outstanding currency in the system in a cash-dependent economy like India. The Society of Indian Automobile Manufacturers (SIAM) recently said its impact can still be felt in the two-wheeler segment. The rural markets have been said to be highly impacted by the note ban and will take more time to recover. While the rest of the country, including industrialists, of course, stands divided in its opinion on whether the drastic measure taken by the government – which has plummeted India (temporarily, the government argues) into a financial paralysis – was an informed step.