50 days of demonetisation: A reality check
New Delhi, Dec 29: It has been 50 days since the decision on demonetisation was made. On November 8, Prime Minister Narendra Modi told the nation that the Rs 500 and 1,000 notes will no longer be legal tender.
There have been several developments that have taken place since the decision was made. Let us take a reality check on what has changed since the decision was made.
Fake currency market wiped out: This is probably one of the biggest achievements since the decision was made. The fake currency market was flooded with only Rs 500 and 1,000 notes. With these denominations being declared not legal tender, all the notes in the fake currency market have been wiped out.
However, officials say that demonetisation will not end the problem entirely. Pakistan would or may be already printing the new fake currency.
Terror, drug industry takes a beating: There was a brief lull in the terror industry post demonetisation. However, a serious analysis would show that home grown jihad has taken a bigger beating when compared to those operating in Pakistan.
Terrorists from Pakistan have not been affected entirely since their dependence on the Indian currency is very less. The drug mafia is, however, hit badly and officials say that transactions are down due to want of new currency.
Effect on black money: There have been several arguments over the impact that demonetisation has had on black money. The smaller holders have come under the web, but the problem is with those holding large sums.
The larger holders do not keep their money in India, but park it offshores. There has been a zero impact on the large holders.
Abhiroop Sarkar, a professor at the Indian Statistical Institute, had recently told IANS that if you want to trap the big black money holders then you need to look at sums of Rs 100 crore.
Economy has been left hobbling: The demonetised Rs 500 and 1,000 notes constituted 86 per cent of the currency in the market. The new currency has very slowly come into the market.
Banks are still reporting cash crunch and have pleaded with the government not to ease the withdrawal curbs. 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.
ATMs still shut: The ATMs continue to be a major worry. Out of 200,000 ATMs in the country only 60 per cent are functional. Some are either not calibrated to dispense the new notes, in others there is no cash. Experts say that it would take at least another month or two before normalcy at the ATMs are restored.
Rural India still grappling with problems: The digital push may have impressed many in the cities. However, in rural India the problem is immense. There is a good section which does not even have a mobile phone, leave alone a smart phone to transact digitally.
Not many also have bank accounts and they rely heavily on cash payments. Those paying wages are still scrambling for change in the absence of notes in the lower denomination.
Salaries still a worry: The salaries are a major problem. Out of the 560 million people working in factories, only 10 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.