By Ashok Kumar
The unplanned and unthoughtful step of taking Rs. 500 and Rs. 1,000 currency notes out of circulation was bound to have some side-effects as this was advertised to curb the ‘black money.’ There is, however, no data available on how much black money or unaccounted money was collected by the Government. But, there was disruption in liquidity situation resulting in the hardship experienced on note exchange by the people.
The Reserve Bank of India (RBI) had been assigned to disburse the new notes after the expiry of the stipulated time for notes exchange. But the RBI has, so far, failed to disburse notes even after five months of the expiry date. Those who deposited old notes are still waiting for their money.
Cash market transactions were likely to bear the brunt.
The cash is 6% only of the black wealth while a large amount is in offshore accounts or invested in real estate or Gold. It is seen that 86% of monetary value of currency was demonetised. It may be noted that 80% of the transactions in India are based on Cash on Delivery (CoD) model.
The worst hit are the people in the rural areas as debit cards, credit cards, net banking or online transactions are popular in Urban India but literally non-existent in rural parts. In spite of good rainfall, the farmers are forced to sell their produce at a lower than the market price not even recovering their cost of producing their crop.
Moving towards the cash-less economy is a move designed to benefit the rich and mighty like the Ambanis, Adanis, Paytm and other banks or providers. It’s reported that each cash-less transaction will attract 2.5 per cent charge per hundred rupees. Multiply 100 by say 100 people, the provider gets or earns 10,000 rupees. Clearly, the common man will not benefit from this move. Secondly, the daily wagers who do not have a bank account leave alone a credit card would be happy to get cash payment. Cash economy would be a better option for the common man or a daily wage earner.