Demonetization Demon

I hate to write this, as I was an ardent follower of Modi. But, I think I should write what I observe, understand and foresee. Apart from ruining the rural economy, Modinomics has hit the state revenues very hard. All states have recorded a significant fall in revenue in the month  of November. December is showing worse signs, and this trend will continue, at least, for the rest of the financial year.

People in rural India are in distress. Forget about digital transaction, a significant portion of the rural populace do not know how to read digits. Total number of mobile phone uses might have increased, but the majority of people only know how to receive and how to call, and believe me, nothing else. You must be delusional to expect these guys to transact digitally. A majority of the rural populace do not use check books, not only because many of them are illiterate, but also in fear of fraud. There had been innumerable examples of overwriting a check amount in order to deceive.

Bank penetration in rural India is still not satisfactory. Still today, a huge number of people don't have any bank account, despite all the brouhaha about JAN DHAN Account. According to World Bank data, the number of bank branches per 100,000 adults in India was 9 and 13 in 2004 and 2014, respectively.

Modinomics has sucked out 86% of the currency notes in order to wipe out estimated 5% of the black money. As blood is vital for a living body, currency is vital for the health of the economy of a developing country like India. Now when you take out 86% of blood, surely the person dies. Similarly, when you take out 86% of the currency without any preparation, you kill the economy.

There was no hurry for Modi to take this drastic measure. He could have initiated the measures he is doing now as a prior to this step. For example, he should have ensured at least 90% coverage of bank accounts. He should have started paying salary of all employees of all organisations in their bank accounts earlier. He should have educated and accustomed the rural populace about  digital economy. But, without doing any homework, he unleashed the demonetization monster. No wonder it has swallowed the rural economy. Even people like Yaswant of CVoter, who is known to be a lackey of Modi, is singing a different tune now. Read his article in Firstpost.

In the comment sections of newspapers or magazines, we see a bevy of paid workers of the IT cell of the BJP, inundating it with meaningless self-congratulatory comments. This a cheap ploy of the BJP to befool people. Up to some extent, they can get success, but can they fool all the people all the time?  

It's a God-gifted opportunity to the Congress for a revival and emergence of  Rahul as the credible national leader. In the UP elections, if Congress allies with the BSP, the alliance can sweep the poll.

Picture taken from net