Monetizing Morality, De-monetizing Value !!

Author: Ajay Chhikara (Author is working in Indian Revenue Service, 2010 Batch)

Notwithstanding the diverse and even outrageously stupid reactions to the Demonetization exercise unleashed by NaMo (it clearly has HIS stamp, not necessarily the GoI’s !), as well as the conspiracy theories galore, one thing is certain- the COST of KEEPING ILLEGAL CASH HAS DEFINITELY GONE UP MANIFOLD, which is bound to ruffle pachydermatous feathers, masquerading surreptitiously as insufferable anxiety caused to the lay public.

Now, there’s no denying the fact that the public is indeed facing the music, and for probably no fault of theirs. But as has been clarified by the Government, this was a logical corollary to the absolute secrecy which had to be maintained necessarily to make the exercise fruitful. On the flip side, the Government could’ve done its homework and got its act together by printing enough cash to tide over this liquidity crunch, apparently manufactured by not so sound execution of a perfectly well intentioned and sound policy decision. We perhaps could’ve done well by emulating the Japanese, who spend a great deal of energy, capital, time and other resources in the Planning stage itself, before actually carrying out the full throttle implementation of any major project.

Unarguably, a decision of such humongous proportions ought to have been a better planned and worked-out one, so as not to put the patience of the Aam Aadmi to test. To prevent chaos from reigning on the streets, sufficient Rs 100 denomination notes, or the new Rs 500 denomination notes could’ve been printed beforehand so as to dispense them immediately after the announcement; the >2 lakh ATMs could’ve been programmed and re-calibrated earlier, so as to enable them to recognize the new Rs 2000 denomination notes, (which incidentally are pretty much as useless today as the Old High Denomination notes are).

The Untiring Bankers, and the risk of Financial Exclusion

But amid the pandemonium, nobody is talking about the Bankers (apart from thanking them as a matter of routine). Few bother to know that they have been returning home at 3-4 a.m. in the early morning, (only to report again at 10.00 a.m. the same morning), with absolutely no security in these testing times. Other important work, though not so crucial, is being neglected in the melee. Nobody is talking about the numerous Jan Dhan Yojana accounts in the name of fake IDs, or, many such accounts belonging to the same person (who are now not traceable). That was one massive exercise, again carried out by bankers, but not without its own share of pitfalls, and for which the banking professionals are scarcely to blame. Apparently, many of these Jan Dhan accounts are also not KYC compliant.

There are many other loopholes which need to be plugged here, but if the nation wants quick-fix solutions, it better be prepared for an avalanche of searing and scathing issues. Good things take time. The next 50 days promise to unleash such scenarios reminiscent of a mayhem in the ring, though it is likely to abate as a decent amount of cash in terms of the newly acceptable notes is being made available to the public.

Though no one can be sure of the exact number of fake Jan Dhan accounts at present, it is likely to be substantial, which (like Fake Indian Currency Notes) would be found out eventually, and the anomaly exposed. This would mean, the deprived and the marginalized sections existing on the edge of existence, and apparently included by the Jan Dhan accounts in the formal economy recently, would be in the era of demonetization, effectively excluded from it (as whatever little they had accumulated over a lifetime of savings would count for nothing now, and the formal channel is any way shut). Had there been proper planning, this duplication/ insufficient & unreliable data generation could’ve been avoided and the bankers properly equipped to effectively deal with this game changing move. But old habits die hard, though they do die, if pushed towards it. And this is as big and brutal a push as one can ever imagine. We all are fortunate to have been equipped with at least one big story to tell our grand-children 40 years hence. For that at least, we must thank NaMo.

Behaviour of Money and the Nature of Consumer Behavior

But this momentous event has also made us realize a thing or two about both the Behaviour of Money and the Nature of consumer behaviour. About Money and its movement, the celebrated Israeli scholar, Yuval Noah Harari says it is an inter-subjective reality which exists only in people’s imagination. Money is not coins and banknotes. It is not an objective reality, but exists only in the subjective consciousness of an entire humanity. Whether it is used to exchange goods and services, or to convert health into justice, or sex into salvation, it remains just that– a subjective entity, capable of evaporating at the drop of a hat. A few years ago, Zimbabwe had witnessed hyper-inflation galloping to the extent of a million percent, which effectively meant their currency was losing (in fact, “leaking”) Value at a mind-boggling rate, so much so  that a cup of tea would cost a million in that country. And why was that ? Simply because the trust in their financial system had been eroded (due to several reasons). So it all boils down to trust or faith in our system. And Money, though not a material reality, is, to quote Harari again, the most efficient system of mutual trust ever devised in human history ; and therefore counterfeiting has been considered a much more serious crime than many others, as “it is not just cheating, but in fact a breach of sovereignity.”

Now nothing could’ve taught us this truth about money better than the current demonetization. I believe we have emerged richer from this intellectual shock !


It has also forced people, at least in small townships and those on the outskirts of a large city like Delhi, to shift to a somewhat rudimentary form of the earliest system of exchange- the Barter system, whereby one can exchange vegetables for other items (local FMCGs if you may call them !) from the local vendor, and getting a small chit as a Bill of Exchange in return (with the details of who owes what to whom), all in the name of necessity AND Trust. An even simpler form of conducting business as usual is on the basis of Credit, where one does not exchange one item for another, although it can only be practiced in small and closely-knit communities. Isn’t it amazing that these ancient ways of commerce work perfectly well even today ?

This element of Trust and the utter uselessness of crass consumerist culture of cities is further amplified and exemplified, as one moves towards the village economy in the countryside. You’ll realize the folks there are not much bothered about the cessation of legal tender status of any note, for they hardly depend on too many transactions involving such currency. Oblivious to the hurly-burly of us city-breds, life goes on at an idyllic pace in the countryside, perceived as too slow by the city dwellers. One can easily re-discover amid lush greenery all around that not much is needed for a decent, meaningful and joyful life. Its a much better life among the greens, than among the greenback (or our humble Rupee). Even in cities people must’ve realized this, that they can easily survive on less, and its not that painful as earlier imagined. And therefore, by extension, this demonetization drive has in fact, removed the enticing facade around the ugly face of consumerism, which has been thrust upon us gullible public, making us believe in and demanding goods and services, for needs which we don’t feel and certainly don’t have.

                    On the other hand, the ingenuity/ resourcefulness (or Jugaadfulness rather) of the Aam Aadmi is also being tested to the hilt. From train tickets to recharges of metro card in lakhs, from diversion of fuel to exchange of old high denomination notes at 20-30 % margins, you name it, and the Aam Aadmi has found a way out to circumvent the rules. Having undermined the initiative no doubt, it remains to be seen whether he actually trumps this one significantly or not. Meanwhile, NaMo has managed to get princely sum of lakhs deposited in the Jan Dhan accounts of daily wagers, and others living on the margins of society. If that is not a masterstroke, I fear we don’t have a word which adequately captures the impact and the potential of the move to inculcate in our citizens a morally correct way of transacting and doing business.

For the first time ever, honesty has felt a sense of vindication for its way of life. It has had enough. No more shameless and vulgar display of filthy wealth amid pathetic hunger and squalor all around. No more loitering around in fancy Pajeros and Audis with falsely inflated egos. No more rattling off the list of influential people you apparently know in the government who’ll get it done for you.

On the cusp of history, and mythology !

These are momentous times in the history of our “once great” nation, and as we embark on a new defining phase, we must resolutely stand behind our Captain, who at least on a scale of sheer guts, has hit the bull’s eye this time. This is the time we can take steps to make our nation Great again. Even the stone-pelting in the Kashmir valley has stopped completely, confirming what was already known before, that such people are paid mercenaries, having nothing whatsoever to do with the so called “cause”. And its all a matter of attitude, how one interacts at the points of transaction, however small that may be. Legend has it that after the Great War of Mahabharata, KingParikshit happened to encounter an extremely ugly, disagreeable and spiteful being on one of his ways through the forest. Upon being asked to reveal his identity, he replied that “he was Kaal; if  Truthfulness and Righteousness reigns, he was Satyug ; if only Yagya remains, he was Tretayug ; if only Daan (Donation) remains, he was Dwaparyug ; and if all of these virtues are lost, I’am Kaliyug.”Aghast at the dastardly appearance and prophetic overtones of the demon-like creature, the noble King decided to not allow him any right or place to dwell on his watch. Kaliyug pleaded that his existence may be severely demarcated and curtailed, but he be allowed to exist, under the watchful eyes of the noble king, to which the merciful king inadvertently granted him 5 places where he could stay- Dyutam (Gambling/deceit etc) , Vysanam Paanam (Liquor/Tobacco etc) , Vice , Violence and illegally acquired Gold. To the believers, it wouldn’t be difficult to deduce that demonetization has stuck at the very core of at least 3 of these 5 places where the proverbial Kaliyug can stay, thereby effectively rendering such activities much costlier to indulge in. Even modern economic principles would attest that, for the non-believers.

A giant leap forward, but miles to go    

For now, the Common Man stays Common, even though the privileged ones have to contend, ruefully, with their curtailed privileges. So, to that extent it wouldn’t be off the mark to assume that these few days are when we have truly come tantalisingly close to achieving economic justice as envisaged in the Preamble, as far as having “Legal” cash is concerned, for almost ALL people encompassing the whole spectrum of economic well-being would be having roughly the same amount of Legal cash in hand  (not taking into account the bludgeoning Bank accounts of some, who obviously are in a minuscule minority). Even if hiring of the hoi polloi by the haves, to queue up at bank doorsteps to exchange their black for white for a consideration, is taken into account, the serpentine nature of such queues and the exchange limit per soul puts a cap on the amount of ill-gotten wealth which can be converted into legit currency. It also puts a small share of that in the hands of the hungry multitudes too.

The timid fight against corruption appears to have become a pointed struggle now, and looks set to take a serious, purposeful course in mission mode. The logical next NaMo stamp should apparently be linking of ALL bank accounts pertaining to an individual with a single Aadhar for him/her, and thereafter the inquiries into transactions involving Benami properties. Along with a host of other economic/political measures which should be undertaken concomitantly to get rid of the gnawing jaws of corruption and to build a true meritocracy, Demonetization seems to be echoing the loud-mouthed jaunts of the Greatest of them all :

                       It  will float like a butterfly,  and sting like a bee,

                      & would surely embarrass the likes of Muhammad Ali.

And yes, there is no GPS enabled chip in the Rs 2000 note, simply because there cannot be. For now at least.

जय हिन्द

(This is not intended to be a mouthpiece of the BJP, and the technical matter may vary to the extent of being incompatible with my limited understanding of such macro-economic interventional phenomenon as the now unfolding Demonetization Drive.)

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