Dec 24 2016
We live in an era of limited attention span, super short news cycles and the upcoming President of the US who uses Twitter and it’s 140 characters to talk. When PM Modi announced on November 8th that all Rs. 500 and Rs. 1000 notes would stop being legal tender as of midnight that day, it was like an earthquake and here we are almost 46 days later still talking about it.
The demonetization topic has come up at almost every party or business meeting I have attended and it’s been great to hear the pros and cons of PM Modi’s actions. First, I think we Indians can adapt to any damn thing and this exercise clearly shows that. People that had stacks and stacks of black money figured out ways to deposit their money into the banks. It remains to be seen if they will be able to get their money back or how much of a penalty they will have to pay. On the other hand, the middle class waited patiently to deposit their money and waited even more patiently to get the new currency notes.
The poor ended up being pawns in a political game where the opposition party said the poor were suffering the most. Actually, the poor have been suffering long before demonetization. The per capita income in India is about $1,500…not per week or month that’s per year. The Chief Minister (think Governor of a US State) of West Bengal, Mamta Banerjee, was one of the harshest critics of the policy and was on TV almost every night to highlight how much the poor are suffering. Because of the lines that people had to stand in line to get cash their own cash. Uhhh, we Indians are used to lines. Go to VT or Churchgate train station at 6:30pm and tell me what you see. Come to Nariman Point at 6pm to catch a bus and tell me what you see. I’ve seen these lines in Nariman Point for the past 10 years and that hasn’t changed.
The opposition party even played some of their classic hits like ex-PM Manmohan Singh. Manmohan Singh is like a one-hit wonder, he might have been the chief architect of India’s entry into the global economy in 1991 but he also was the PM during one of the most corrupt periods in recent times and was absolutely silent about it. (The joke is when he visited the dentist, the dentist said “at least open your mouth in my office”.)
I hope Modi doubles down on his drive to make the country a digital currency nation. When people say, how can you expect a poor man to buy a smart phone to take part in this new digital economy I just lose it. Have the politicians scammed this country for so many years that they have not been able to lift people out of poverty? That’s the real tragedy, not demonetization.