A similar though less dramatic effort in 1978, now in hindsight, raises doubts along the following lines:
- Did it really curb corruption in any meaningful way?
- Did it increase our country’s tax compliance?
- Did it minimise, let alone eliminate, the disease of black money?
The overwhelming answer to these is a loud ‘No’. Of course, if it was indeed a ‘Yes’, we did not need these measures in 2016. The short-term suffering is huge and has been so often quoted everywhere – TV shows, print media locally and abroad and social media. GDP is most likely to suffer, there is genuine fear about inflation, millions of MSMEs are badly hurt on cash flows, cash cycles have been vacuumed out, retail sales are down 25 pc and, in a lighter vein, our views on ‘ATMa’ has been overturned with current obsession on ATMs.
All agree that this whole exercise has been ill-planned, ill-prepared and ill-programmed. The tactical rules are changing everyday and bank staff are under huge stress keeping pace. One branch I visited last week had on its notice boards multiple ‘Circulars’ – some contradicting earlier ones. There is a huge clamour for roll back, the parliament has stopped functioning and cities and towns paralysed with protests and bandhs. So, all in all, is this a forgettable period in our history? No. It is perhaps one of the most profound impactful periods in our country’s progress.
Three perspectives stand out:
1: Decision-making: It has often been quoted that India’s biggest ills emanate from the top of the house which suffers from a basic disability and unwillingness to take tough decisions. Democracy is normally the cause we are told. What we have in our PM is someone who demolishes that thought. He is bold, can take dramatic audacious decisions, take accountability and stand for it in a national TV explaining his mind. There is no kicking the can down the road, there are no excuses, no hesitation – just fronting up what the government believes in. This move is as much a political signal as an economic one.
2: Confidentiality: It is almost impossible to keep confidentiality within a small corporate entity, let alone a massive complex geography of a billion people. This government has for the first time in history proven its ability to do just that. Why is this important? It gives huge confidence to the millions. Many in the government have put the country ahead of themselves and deserve so much credit.
3: Mindset: Above all, the most sustainable impact is the enormous shift to the digital age and of raising digital awareness among some 1 billion people in just a matter of a few weeks. No amount of training, education or nudging could have done to the adoption of digital tools as much as this one. The normal cycle is awareness, interest and then adoption. Here it has been direct adoption in one stroke. Overall, this has been a great move and hats off to our PM and his team.
The writer is COO, ANZ Bank, Institutional Business for 20 countries. The views expressed are personal opinion.