Thursday, November 17, 2016

Jottings : slice of life - 60 ( Transformation of Paper money in India - Bold stroke by a Bold man)

Jottings : slice of life - 60 ( Transformation of Paper money in India - Bold stroke by a Bold man)
A system can be only as good as its practitioners want it to be. This is the fundamental truth to be understood in a democracy. First thing immigrants learn when they land in a Western country is the implicit respect for basic rules and processes they find there. It cuts across all sections of society. Also, what they are normally surprised to find is that people dont grumble , fret or fume about such rules. They follow it joyfully, effortlessly with conscientious participation. Now, We are not talking obtuse, debatable laws of equality, rights and liberalism - over which there will always be contending sides. What are we talking about is simple rules of living in the midst of other people, and making democracy function effectively on a day to day basis. It is often funny to observe when an Indian goes to India on vacation , after say three or four years of stay in the US, he or she will subtly, without any conscious effort or pretense start standing patiently in a queue, be more polite to strangers, open doors for others, treat people little bit more equally regardless of caste or profession, follow road rules more carefully etc. Things they would have disregarded with disdain earlier would have now become a part of their psyche. What happened to them in those three, four years. Nothing drastic. Nobody held a gun point to their head to force such changes. It happened because of the very nature of the orderly environment they lived in for few years. And once such an exquisite taste for basic order is acquired and relished, like wine, it cannot be given up that easily.
It is impossible for any democratic government to enact any changes, good or bad, if its educated citizens find ways and means of circumventing processes without an iota of guilt, sympathy or sense of wrong doing. Of course, when such changes are blatantly injurious to the body politic, then we must act. But otherwise, once all of us agree there is a dangerous malady affecting the health of a country, any change which aims to cure that ill should be welcome without exception. Especially so, in countries where democracy mostly exists on paper, and inequality is rampant in everything else.
When the Government of India announced the withdrawal and replacement of certain denominations of currency bills to ferret out unaccounted/illegal hard cash in the economy, it was only an election promise met by governing political party. Lets not forget, they were elected on such promises. And when steps are unfolded to transform that promise into action, it needs our fullest co-operation to make it happen. What Modi has attempted without warning or signs, will go down as one of the most audacious moves ever in Indian Financial history. To withdraw and then inject cash into a billion strong country over a period of just one month, for majority of whom cash is the only way of doing transactions is something that will make the best of leaders squirm in their seats. And to able to do it successfully ( we are hoping for success) without hurting daily livelihood of millions - which if backfires could cost Modi his next election and the credibility of this current tenure is a staggering act of statesmanship for a man who has to prove himself again in couple of years in an other election campaign. But nevertheless, he went ahead and did it , in the hope that something good will eventually come out of it. It is like giving birth. Without that excruciating pain for brief while, nothing new can be born, unless we decide to cheat the body and bring out the child. In which case, we are weakening the system in the long run. For an action of this magnitude to succeed, it should have the fullest cooperation of its citizenry. The question is : do we have that kind of co-operation. Already, sections of population who have connections with Banks and its employees have surreptitiously started exchanging denominations they want to possess. They are not doing anything “illegal”, but as I said earlier, they are only disregarding simple rules set for smooth transition. In mature economies this kind of currency replacements happen all the time to prevent counterfeit and black money. US does it once every five years. The process is well ironed out, and we dont hear about it in national news. But in India, this is a bold step taken by a bold Prime minister. Rumors are a-spread that there were ulterior motives to sanction this change at this time, and certain large business houses are pushing this agenda. May be true. Maybe not!!. The fact remains, somebody needed to shake the economy from its soporific financial stupor with regards to unaccounted money. If there is one single disease which can ruin any well made economic plans, it is hard cash stacked away under pillows and mattresses. Like luring rats out of dark holes, it needs ingenuity, perspicacity and courage to bring it out without fear of its repercussions. It will be messy for a while, but afterwards, the playing field will be cleaner and more seasoned for better plans and measures. That is the hope.
I am not a great admirer of JFK as a President, but his fourteen minute inaugural speech in 1961, contained some brilliant insights into strengthening of democracy including “ ask what you can do for your country…”, which is universally known and admired.. But personally, I like
“If a free society cannot help the many who are poor, it cannot save the few who are rich”
True democracy can only come into form when there is certain level of financial stability for all. It can never be equal. There will be always be financial inequalities, based on talent, education and jobs. But by regulating money flow, ensuring that there aren't too many leaking holes, Government can bring about a modicum of rationality into its financial process. In a predominantly cash based economy like India, the first thing that needs regulation is cash. Mr Modi’s move is not taking away anything from anybody, but merely replacing it with something that may help make sense. It may not be full proof. No law or legislation is or can ever be.
We should give it a chance..
God bless…
Yours in mortality,
Bala

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