<b>Fifth Columnist :</b> Note-ban riddle
The political discourse has shifted from unearthing black money to digital payment mode
Of all the subjects that have touched human lives in this country in the last few decades, nothing remains quite as all encompassing in its impact as demonetisation.
More than two months after it was proclaimed by a prime minister who surprised, indeed stumped a nation, by banning high denomination notes, no one can quite say for sure the direction that the whole note-ban exercise is likely to take.
In true Narendra Modi style, the country appears split between its pros and cons. Some western observers have already written the epitaph of the Indian economy, saying it is inexplicable why a country, whose economy was running in fine fettle, regarded as one of the bright sparks in an otherwise dismal world of emerging economies, should decide to pull the plug on a system by delivering a body blow to its legal tender.
There is little doubt that the economic slowdown has begun; people are losing jobs and hiring in any, if not all sectors has already become a thing of the past. The GDP is showing signs of going into decline and the general business sentiment is on the slide. In addition, there is the looming fear that India has been set back by a couple of decades, in that the bad old days of long queues, scarcity and rationing are back. In other words, a full blown financial emergency (instead of political emergency) has been foisted upon the country, without so much as an announcement, much less a hint.
Visions of an economic Armageddon? Well, it depends upon how you see it even though one thing is clear. There is no cogent explanation as to the road map ahead and how an exercise of this magnitude is likely to help the country, the economy and most importantly, its common people, who are currently jostling in queues for money, which rightfully belongs to them. Not much different, from let’s say, North Korea, at the moment, except that there are going to be crucial assembly elections in a few weeks time, which could be interpreted as a possible referendum on Modi’s demonetisation.
Consider this. Of the roughly Rs 15.6 lakh crore that was floating around as of November 8, over Rs 14 lakh crore (roughly 90 per cent or more) has been turned in. In other words, what we are looking at is roughly Rs 1.6 lakh crore not coming back or disappearing. So, where pray, is the much-vaunted black money? Little surprise then that of late the political discourse has shifted from unearthing black money to putting India in the digital mode of cashless payments. Theoretically at least, if highly advanced western democracies dare not profess to go cashless, how does India, over a 90 per cent cash economy do so? It is a question that has not provided any easy answers thus far.
Now look at the flip side. Flights are going full, hotels are packed, markets are laden with goodies and as the last week’s New Year celebrations demonstrated, life continues to be a breeze for many. You could perhaps put it down to those who have plastic money and those who do not. Sooner, rather than later, we shall know.

The absence of any clear cut explanation for hoisting demonetisation on an unsuspecting country, has led to theories, which are pretty wide ranging; from traditional BJP baiters, who see the unseen force of Hindu majoritarianism to those centrists who appear as baffled as any to the real motive of banning more than 86 per cent of the country’s currency in one startling go.
That has naturally led to various other theories, but the one doing the rounds comes from a certain Norman Haring, who is convinced that the decision of the Indian government was prompted by the United States.
In a detailed article, `A well-kept open secret: Washington is behind India’s brutal experiment of abolishing most cash’, Haring wrote: “US President Barack Obama has declared the strategic partnership with India a priority of his foreign policy. China needs to be reined in. In the context of this partnership, the US government’s development agency USAID has negotiated cooperation agreements with the Indian ministry of finance. One of these is the declared goal to push back the use of cash in favour of digital payments in India and globally.”
He continues: “Not even four weeks before this assault on Indians, USAID had announced the establishment of “Catalyst: Inclusive Cashless Payment Partnership” with the goal of affecting a quantum leap in cashless payment in India. Its press statement on October 14 says that Catalyst marks the next phase of partnership between USAID and ministry of finance to facilitate universal financial inclusion.” This statement, says Haring, which in the normal course would hardly have attracted any attention, is now unavailable on the USAID website anymore!
In the write up, Haring goes on to quote Badal Malik, CEO of Catalyst: “Catalyst’s mission is to solve multiple coordination problems that have blocked the penetration of digital payments among merchants and low-income consumers. We look forward to creating a sustainable and replicable model…while there has been a concerted push for digital payments by the government there is still a last mile gap when it comes to merchant acceptance and coordination issues. We want to bring in a holistic ecosystem approach to these problems.”
In an open season for conspiracy theories, this is as good as it gets.
Ranjit Bhushan