A needle in a haystack : A Fable
As a student in a school I read an interesting story where a farmer lost his needle which he wanted very badly. He came across a wonderful idea to find the needle – he decided to burn the hay stack where his needle was lost!! He waited for the hay stack to burn; he was happy because the fire provided him the warmth to protect him from the cold night. In theory the idea was very good but the execution left a lot to be desired.
One year hence the ghost of demonetization still haunts us and many questions remain to be answered. I am not sure whether it is too early to analyze the repercussions of this step. Change always creates discomfort but unfortunately the economy is still showing no signs of revival.
Good intentions pursued with good rationale make for good public policy, something this government hasn’t figured out as said by Mr. Ashok Desai who is a former chief economic advisor to the government of India. Every person knows that black money is a bane for the economy but the current steps taken for PURIFICATION will be painful.
Demonetization has been earlier tried by Russia in 1991, Myanmar, Zaire and North Korea in 2010 where it failed miserably. Interestingly Myanmar is headed by a military Junta, North Korea by an insane autocrat and Zaire has a politically unstable regime!!
But in a democracy like India there is a huge digital divide and only 20% of people have access to plastic money and 80% of the transactions are cash based. Such a step to remove Rs 1000 and Rs 500 notes is utter foolishness and defies basic common sense. These high denomination notes constitute 84% of our country’s currency circulation. The new currency is not of good quality and gradually we are in the process of decommissioning Rs 2000 notes! The cost of printing new currency notes has virtually exceeded even the most extravagant estimates. If the government was serious it should have done meticulous planning of keeping enough notes of smaller denomination as the objective was to bring out the black money which like a needle will continue to hurt and elude us. Though availability of cash has stabilized, the woes of common man continue like a never ending melancholic saga. Despite a bumper crop the prices of the essential food items refuse to come down and the poor farmer is unable to drop the prefix from FARMER!!
Einstein once said ‘Two things in the world are infinite – the universe and STUPIDITY’. Interestingly stupid people do not get affected but people around them always feel the PAIN of their deeds.
Interestingly major black money is generated through online transactions in the form of FDI and NPA by banks!! Certain countries like USA in the name of outsourcing, run profitable business in India by paying only nominal tax which is disproportionate to the profits they make, and most of the money is directed to tax havens like Switzerland… this money needs to be unearthed not 6% black money which is generated in our cash based economy!
My suggestion would be tax reforms have to be done in such a manner that more people pay tax. (Presently only about 2-5% tax payers like us are HONEST because tax is deducted at source!!!)
Is somebody listening!! Let’s wait for the next budget and I hope our problems are communicated to the government.
I quote, ‘The biggest communication problem is we do not listen to understand. We listen to reply.’ I unquote.
Kamlesh Singh is on the Faculty in Psychology, House Master and Career Counselor in The Scindia School, Gwalior (M.P) since 2007. He has also worked as Guest Lecturer in Jiwaji University (Gwalior) in MBA (HRD). He has an M A degree in Psychology and has specialized in Industrial Psychology and Organisational Behaviour & Counselling. He has attended several seminars and workshops across India and also overseas. Self-motivated and disciplined, he wants to strive to excel and make a mark in the academic world through continuous learning, hard work and persistence.