In an auto-wallah’s words, “Sir, I know the money would be hard to come by for a month or so, but I believe stopping to do my work would be worse. I will keep my head down and keep driving my Auto. (PM) Modi will do what he has to. He seems non-corrupt, and I will take his word for it when he says things will be better in the future.”
Is it the enigma of a no-nonsense Prime Minister promising his people that attacking corruption at its root cause would bring fruits in the future, or is it the result of blind following he has had since being announced as the Prime Ministerial candidate back in September 2013?
Narendra Modi is a polarising personality. He has had his share of negative publicity, influenced by external forces and forces within our democracy, like Aam Aadmi Party’s Arvind Kejriwal or the absolutely-in-tatters Indian National Congress.
You may like him or loathe him, but one thing is sure – he has propelled India’s GDP to a more-than-respectable 7.5% from the depressing growth days of 4.7% under the Congress rule. He has put India right on the world map through superlative diplomacy, gaining important traction by highlighting internationally relevant issues such as terrorism and global warming. India is one of the few nations which are really hurt by terrorism on a daily basis, so India has to push the agenda of forming a global anti-terror alliance so that the demon can be effectively crushed.
Coming back to the topic of demonetisation, one of the main reasons was indeed to nip the terrorists’ capability to print fake notes across the border. Yes, security is such a serious issue that a drastic step such as this had to be taken so that the 400-odd crore rupees of fake currency that the ISI pumps in the Indian market each year deems invalid.
Other obvious reasons being bringing the unused money back in the system, which were woefully useless lying in someone’s house or office safe. That money could then be used to flush the banks with funds so that eventually the loan rates can come down by some good margin, helping people consume more – thereby kickstarting the economy and keeping the throttle open for touching a 10% GDP growth rate in the near future, and then maintaining its momentum.
The currency hoarders, obviously, had a huge headache at their hands. Unaccounted money, or BLACK MONEY, as we like to call it in India, is a HUGE issue in our nation. According to a recent news report, just 1% of the Indian population pays its taxes. Is it not an astonishing figure in itself?
Anyways, there is no denying that people have faced/are facing a lot of issues in withdrawing their own money from banks as well as ATMs. Yes, the execution could certainly have been better, but there was a lot of urgency involved in such a move. There was a lot of pressure on the extremely few people who knew about the shock move, and there was a real risk of the information leaking out. Had that happened, the whole shock and surprise factor would have been rendered toothless and the cash hoarders would have easily put their money in immovable assets or high value investments such as gold, etc.
The public mood is understandably a bit sombre and muted, having spent 40+ days in a tough less-cash environment. But would it not be worth it if a home loan rate comes down by .5%? How would people react to their resultant saving of, say, 5000 rupees EACH MONTH! Over a period of 10 years? Now that’s handsome.
What I am trying to say is that in the medium-term (2-4 years) the results of this massive exercise would start to show in regular people’s bank balances! Through hitting the hoarders and tax-avoiders, the government stands to gain handsomely. Flush with funds, the government would be able to execute stalled infrastructure projects, award important defence contracts, pump some money into the sagging healthcare and education departments, etc.
The recovered money would be such a big enabler.
Agreed, there is a hell load of money stashed abroad, but starting the cleaning from one’s own home is paramount. And if there is one leader who has the guts and gumption to bring that money back to India, it is Narendra Modi.
Remember, he actually bet his popularity on this inconceivable mega-move called Demonetisation. Such is the nature of his landmark roll of the dice that this could directly impact his chances of him getting reelected in the 2019 General Elections!
I think it was worth a shot, Mr Modi. I believe you are incorruptible. Therefore, I stand by you.
Peace, progress and prosperity to all.
Update: As of 1st January, 2017, the State Bank of India cut the lending rate by not 0.5%, but 0.9%!
State Bank of India Cuts Lending Rate by 0.9 per cent – http://www.news18.com/news/business/flush-with-deposits-state-bank-of-india-cuts-lending-rate-by-0-9-per-cent-1330027.html