50 days of demonetisation: Clearly nothing is normal as yet

Posted By:
Subscribe to Oneindia News

New Delhi, Dec 29: When you wake up on Friday, 51 days since the announcement on demonetisation was made, and expect all will be normal. Banks have still been reporting a cash crunch especially where the Rs 500 and Rs 100 notes are concerned.

[Also Read: Flashback 2016: Year of exits at RBI: First Rajan, then old notes!]

The banks have, in fact, written to the Finance Ministry not to ease the curbs on withdrawals after December 29, the day the 50 day deadline set by Prime Minister Narendra Modi ends.

Currency

Modi had told the nation, "Help me for 50 days and I will give you the India you have desired." The 50-day deadline ended on Wednesday night. The queues at the banks and ATMs may have gotten thinner, but the cash crunch will continue for some more time as reported by the banks.

Fifty days have gone, but banks say that the curbs on withdrawals must continue for some more months at least. Unless more notes come into the banks, normalcy will not be restored completely, banks have also said.

Reality check:
Fifty days have gone and people still are talking about demonetisation. This is a clear indicator that things are not entirely normal as yet. The ATMs continue to be the worry still. Only 60 per cent of the 200,000 ATMs are functional. There is a huge demand supply mismatch and this continues to be a major worry.

Rs 15 lakh crore has been taken out of the system post demonetisation and only Rs 6.5 lakh crore has come in the form of new currency. The demand-supply mismatch is huge.

While the government has been making a push for digital transactions, the move has clearly not succeeded in the rural areas. The situation is quite miserable in the rural sector. The salaries are a major problem. Out of the 560 million people working in factories, only ten per cent is in the organised sector.

This means only 10 per cent of these people are getting salaries transferred electronically into their bank accounts.

Adding to the confusion is the frequent change in rules. In 50 days, rules have changed at least 62 times. There were in fact jokes on the RBI which was referred to Reverse Bank of India.

Experts, however, point out that the situation is likely to normalise by the end of January. However, for that to happen the demand supply mismatch needs to be bridged and more currency has to come into the banks.

OneIndia News

Please Wait while comments are loading...