Saturday 11 November 2017

Demonetisation: When Rumours Gained Wide Currency

It is often described as India’s 9/11 (our date writing convention is different from Americans). On November 8, 2016 night the Indian public was subjected to the now momentous ‘Mere Pyare Deshvasiyon …’ speech. Unfortunately I was deprived the privilege of hearing that historic address as I had just stepped out of my office hall to attend a phone call. During my telephonic conversation I could overhear loud shrieks from the hall.

After I returned I came to know about the momentous decision by the Union government to make high value currency notes of Rs 1,000 and Rs 500 denominations illegal tender from the following day.

The next day during my morning errands I came across queues in front of all banks with the public sector ones being thronged by much larger number of people. So when I decided to deposit the illegal tender under my possession, I chose to deposit in my Yes Bank account, as it was a low key bank, when compared with public sector banks and its more popular private sector peers such as HDFC or ICICI banks.

However, even there I was greeted by an unprecedented crowd, though not as intimidating as in other banks. Fortunately Yes Bank had provided separate queues for deposits (for account holders) and exchange (open to general public), a luxury not offered by many banks.

Hence the lives of account holders were made less miserable as they could opt for the less torturous deposit queue. But each transaction was taking longer time. And I got stuck behind one fat cat couple.

They had come with a backpack full of demonetized currency notes. It still beats me under what provision they were able to deposit that much amount, easily running to around Rs 15 lakh, without inviting scrutiny of taxmen.

While the cashier was busy putting bundle after bundle into the currency counting machine, the couple got into a small talk with the relationship manager, a twenty-something woman and probably a freshly minted MBA, who was standing nearby.

The couple started off by asking her how she and the staff were coping with the work overload. The woman readily conceded about the work load and then prattled on to a morality trip, betraying her upper class entitlement and admiration for demonetisation.

She sounded very gung-ho. “It is very good for the country,” and then marveled at how the prime minister was able to keep everything under wraps and took all ‘dishonest’ people by surprise. Those with unaccounted wealth would have no option but to destroy them, she asserted.

With a patronizing giggle she continued, “Oh god, what all tactics people are using to turn their black money to white.” Some are depositing money in their second wife’s name. Some of ‘these people’ (no points for guessing which community) have so many wives, she guffawed and the couple too giggled in agreement.

Then she trained her guns on the opposition. She accused them of ‘playing politics’ and how they were putting so much ‘pressure’ on the prime minister who was trying to ‘do something’ for the county. That was a day after he made his lachrymose ‘Meri jaan khatre mein hai’ speech, which would make yesteryear tragedy queen Meena Kumari proud.

Thankfully by that time the bundles got counted and my turn came. The relationship manager retreated to her cubicle.

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Those were the early days of demonetisation and even hardened pessimists thought all this chaos due to cash shortage would subside within a week. Almost everyone had underestimated the government's lack of homework to carry out the exercise, especially with regard to arranging for new currency notes and re-calibrating ATMs to accommodate the new notes, as they had a different dimension.

It was also an open season for myths and bluster with wide circulation of 'forwarded as received' messages in the social media, especially WhatsApp. The government's much vaunted premise of panic stricken black money hoarders flowing their unaccounted stash in the Ganges or setting them on fire enjoyed wide currency. A few who decided to stick their necks out were trolled into silence.

While standing in serpentine queues in front of banks and ATMs (which became a national duty) many self-righteously speculated about how much of the Rs 16 lakh crore demonetized currency will not return. And a widely held guesstimate was that between Rs 3-4 lakh crore would stay away from banks. Even sceptics thought close to Rs 1 lakh crore may not come back to the banks.

Another popular myth that died an early death was that of nano-GPS chips embedded in the new Rs 2,000 notes. Some TV channel anchors waxed eloquent about its magical powers claiming that they can provide precise location of the currency and every note can be tracked. 

They bragged that the chips are so powerful that even if they are buried 120 metres below the ground they can send signals to satellites! Once those pink Rs 2,000 notes arrived, the myth was given a quiet burial.  

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A strong sense of Schadenfreude pervaded through all sections of the society. The poor who were the worst hit took cold comfort from the fact that their 'maaliks' too were struggling. They were amused to see them spend sleepless nights over getting their cash stash in old currency exchanged and even approaching them to deposit in banks for a commission. 

The TDS weary salaried class was happy that businessmen, whom they perceived as congenital tax evaders, were being made to come clean on taxes and wet dreamed of lower income-tax in the next Union Budget. Some fake news sites also floated the yarn that income-tax may be even abolished, which further warmed the cockles of their hearts.

For the rich it was a feeling of relief as they did not have to stand in queues. No famous personality was ever seen standing in queues, but all obviously got their money exchanged - courtesy jugaad.

Those with money parked in tax havens abroad were patting themselves on their backs for their foresight and tweeting in favour of demonetisation with missionary zeal.

For a long time Reserve Bank of India played coy saying it is not yet done with counting the amount of banned currency notes deposited in banks. When it became very jarring like a battered kettle tied to a dog's tail (my apology to W.B. Yeats) they came out with the 'projected' numbers which was nearly 99% of the demonetized currency, not considering the banned currency lying in Nepal and Bhutan vaults, which is yet to come. 

No wonder they were so secretive. Nobody got browbeaten enough to torch their currency stash, and thankfully the already polluted Ganges was spared of further influx of toxins in the form of printers ink!

Also Read: Bangalore Beat

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