Prime Minister, Narendra Modi’s demonetization of high value currency notes has exposed the rather large and bloated underbelly of our society. The shenanigans of this section of Indians in the background of the demonetization put us to shame in front of the world which has been watching the developments in the country with interest. Every country, as indeed every Indian, is aware of how our economy has had to contend with a parallel economy of formidable proportions. But its ramifications as they unfolded made most of us wonder whether most of us were crooks and had no patriotic feelings.
As Modi’s surprise announcement about demonetisation was made late in the evening around 8.30 PM on the 9th November last one thought people would take it easy and look for ways out to get most of their unaccounted cash, if any, disposed of some way or the other next day but mostly in a regular manner. One thought the demonetization would not yield much as an opportunity had already been given to all the cash hoarders to declare their holdings on payment of minimal tax, penalty and surcharge amounting to a total of 45% under the Income Disclosure Scheme 2016 (IDS) that was run for as many as three months from 1st June to 30th September 2016. The Scheme yielded more than Rs. 65000 crore (Rs. 650 billion, around $95 billon), by itself an astronomical sum. But for the size of the unaccounted wealth estimated to be a mindboggling sum of around 9 lakh crore (Rs. 90000 billion, approximately $1500 billion) this was considered chicken feed. And as the prime minister had warned earlier that further action would follow if the outcome of the IDS was not satisfactory action to further squeeze out unaccounted cash was expected.
As the high value currency notes of Rs. 500/- and Rs. 1000/- were to cease to be legal tender by the midnight of 8th November the hoarders tried most of the tricks that they could possibly use. They made a beeline that very night for the jewellers and unloaded the cash there and were prepared to get in return whatever was offered. The shopping hours, at least for jewellers, got extended and the business during those hours was reported to be of Rs. 100 crores in Bhopal alone. Many of the jewellers are going to have to answer for their indiscretions in course of time. Apart from buying jewellery the hoarders tried to buy railway tickets to be cancelled later. Enormous number of railways tickets for all air-conditioned classes were bought with the intention of cancelling them eventually. The government had to block that route of changing the colour of the ill-gotten money. That Indian attribute of “jugaad” was in full play.
From the 9th November onwards the black money barons put all their human resources for exchanging their black cash at the bank counters. That the exchanged amount would only be of a paltry Rs. 4000/- (later raised to 4500/- and eventually reduced to Rs. 2000/-) did not really matter. Initially only the same representative was asked to join the queue in a bank over and over again with different IDs. When the authorities intervened to check this ploy multiple representatives were mobilized to exchange the cash at different locations. For all their labours the representatives got a petty commission but they were clogging the banks to the detriment of genuine exchangers whose wait at the banks was avoidably lengthened.
The authorities were apparently watching the proceedings with a keen eye. When it was realized that the same set of men were exchanging cash at different times in the same bank or at different banks they introduced the marking of the fingers of the representatives with indelible ink that is generally used during elections. As even then some misuse of the facility was noticed the authorities reduced the amount dispensed for exchange to only Rs. 2000/-. Ingenious as all crooks are, even this they tried to circumvent. Then the practice of exchanging only in the branch where the depositor had his account was introduced to further bar the hoarders from attempts to launder their money.
It has been a very difficult and strenuous time for people all over the country. As somebody remarked, the entire country was seemingly waiting in long, serpentine queues to exchange their defunct cash in order to run their households, businesses or whatever. Here too the hoarders who are nothing but anti-socials increased the pain of the general public by sending their hired hands. Some deaths occurred of people while waiting in queues.
Likewise, it has been a tough time for the bankers. A few deaths took place in banks too due to over-strain. Nonetheless, they did a tremendous job. Not only did they have to contend with long line of money exchangers, they had to deal with enormous amounts of cash which in many cases were mixed with fake Indian currency. The fake ones, especially those printed in Pakistan, are difficult to detect. Pakistan had made special efforts to set up a press that was capable of introducing almost the same security features as are used in this country. The Bank staff had, therefore, to be careful, keeping a sharp eye while receiving cash that was tendered over the counter. It was kind of a game of matching of wits virtually at every step and checkmating the fraudsters and frustrating their pernicious efforts to cheat the government.
Not only did they try to recover whatever was possible from their piles of cash that had become trash, they even tried to save themselves from the arms of the law. They not only burned them, they also dumped in rivers and drains huge numbers of currency notes of high denominations that they were left holding in their offices, business sites or residences. A whole truck-load of currency was reported to have been set fire to. The rot has seeped in so deep that a large number of seizures were made in small towns from Gujarat to Bihar and from Punjab to Tamil Nadu. Many seizures were effected while the cash was being transported by these crooks to places that they thought were convenient for their illicit purposes. On the plus side, the local bodies and the utilities have had a windfall. All outstanding payments have been paid off, including some in advance, to fatten their always-starving finances. Likewise temples too have had so much cash showered on them that some of them have had to hire extra hands to count the piles of cash.
No reports of our “netas” (political leaders), the repositories of substantial amounts of black money, have, however, surfaced so far except one from Bhopal where it was reported that they were browbeating cooperative banks to provide them with back-dated FDRs. Cooperative banks still operate manually and the records can be easily fudged
But the unscrupulous man in business or industry is, kind of, never-say-die person. He would never give up and come clean and surrender. Hence, only a small proportion of dirty cash is likely to be exposed and brought overground. A lot will remain underground as liquid cash. A far greater proportion has been invested in fixed assets like land, real estate, etc. But Prime Minister Modi is not going to relent; he is going for broke after the cheats and the unscrupulous. Already, raids have been conducted on jewellers – their shops and residences – and he has announced a drive against “benami” property, i.e. property held against the name of a fictitious person where most of the black money has been invested.
If not anything else, the proceedings in this regard show how rich the country is, only the riches have been cornered by a few crooks. It has always been rich but ordinary people could never enjoy its wealth. The Mughal raiders, the Europeans, the British and now the crooked politician, bureaucrats and businessmen have looted it. It is only Modi who has taken this step knowing full-well it might electorally backfire on him.