It is the one month anniversary of demonetisation and after bearing 30 days of long queues and cash crunch, the country still awaits better days. Prime Minister Narendra Modi’s 50-day timeline is yet to see out its course. But the situation has not improved much on the ground. Demonetisation has elicited contrasting opinions among the people. By and large everyone has acknowledged that people are facing serious inconvenience on a daily basis and the scheme could’ve been implemented in a more effective manner.
It is also unfair to say that the government’s decision to tackle black money by demonetisation was pulled out of a hat a few months ago. In the course of events that took place after the BJP government came to power, this move actually fits. The government first announced plans to open Jan Dhan bank accounts for everyone in the country and gave ample amount of time. Then the government gave two separate windows to people to declare black money stashed abroad and black money and undisclosed assets in the country with tax amnesty or fines.
WATCH VIDEO | One Month Of Demonetisation: Where Do Things Stand
The government could’ve considered adopting some simple ways to ease the troubles of people after demonetisation.
Increasing the number of mobile, micro ATMs, especially in rural area
Unlike cities, where ATMs are usually found within a couple of kms in any direction, rural population has to travel long distances to reach ATMs. In some places several villages have access to a lone bank and if they are lucky, a working ATM as well as mobile and internet penetration is also not sufficient to support ATM installations across all rural, hilly and other hard-to-reach areas. These areas are the worst struck. The government should keep it as a top priority since these areas don’t have many options of digital payments for daily spendings.
Demonetising old currency after releasing new currency
The demonetisation move could’ve been better implemented given the fact India is a cash driven economy. Demonetising currency within hours of its announcements left the whole country in a financial shock.The government could’ve kept the tenders legal till the deadline for depositing old currency in banks. As they are still being accepted for deposits in bank accounts, they could’ve been used for spending as well. It would’ve given a buffer period to start releasing new currency before invalidating the old currency. During which time the banks would’ve been able to recalibrate the ATMs without running out of cash.
Making the new notes the same size as the older notes
If you’re going to demonetise ₹ 1,000 notes, you may as well release the new ₹ 2,000 notes of the same size and not smaller than even the current Rs 100 notes. The recalibration process would’ve been much easier. The notes would’ve found their way into the ATMs much faster and people would’ve faced much less problems.
Giving incentives to people to redeposit excess currency of the new notes
A major drawback seen in the implementation is that people are only withdrawing cash from ATMs and banks and shopkeepers and businesses who are getting ample amount of cash in legal currency are not redepositing it in the bank. If the government announces some incentive for those people and gets the money bank into the banking system then banks will be stocked with larger amounts of new currency notes to dispense to people in need.
Making POS terminals mandatory for shops, improving payment handling capacity
Since the government had the whole process to attack black money in mind for couple of years, they could’ve pushed a mandatory requirement for all shops to keep point of sale terminals. After demonetisation was announced, even the shopkeepers who want to adopt the POS process are unable to do so, since there is shortage of supply of such machines. Also, servers of payment gateways are not decked up enough to handle the increased traffic and many machines remain out of order with retailers. Several transactions via mobile wallets also fail due to server issues. The exemption could’ve been kept for small retailers like vegetable sellers, fruit sellers, roadside panwala etc. where short change would’ve done.
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