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Showing posts from November, 2016

'When people are suffering, how can you call it a good cause?' -- C H Venkatachalam, GS, AIBEA

An interesting interview with CH Venkatachalam, General Secretary of All India Bank Employee Association (AIBEA) on the issue of Demonetisation. Though a couple of days old, this could not have been missed. He says in a response to a question:

What do you think is the rationale behind bringing in a denomination higher than Rs 1,000?

It is illogical. Removing Rs 500 and Rs 1,000 notes and bringing in Rs 2,000 notes does not make sense at all. It is easier to hoard again.

Black money transactions are always done in higher denomination. Now, people will accumulate the Rs 2,000 notes.

Why do you have to come out with a Rs 2,000 note when you are demonetising higher currencies?....

What is really the interesting pat here is the absence of mentioning purchasing power of the Rupee if higher denominations were junked. It should be noted that the purchasing power of the rupee had gone down considerably since 1978, when high value notes were junked. The value of Rs 1,000 in 1998, compared to the …

Demonetising and Cashless Economy: a difficult alliance rooted in compromise

This is a brief intervention on the aspect of Demonetisation and India likely to go a cashless economy. Though, a lot of oral debates and narratives are being featured around the topic, what saddens is the fact that cashless economy is hardly understood and then used as a tool to pare this whole exercise. The disclaimer from me is to be once again stamped: Demonetisation undertaken is a huge implementation failure, whereas the mechanism itself has pros weighed in favour. Anyways, the pros have been discussed elsewhere and in plenty and thus I feel no need to get to it at the moment, while a post on it could be in the making in the near future. On to cashless economising then....

The thing with cashless economy is it is rarely understood in its complexity. And what really goes missing from discursive narratives about it are what governments do about the loss of seigniorage: the profit the government makes from making money. To a large extent it is thought through as letting gone of, …

Public Meeting Does Demonetization Tackle Black Money?

Public Meeting Does Demonetization Tackle Black Money?
November 18, 4-7pm
Constitution Club (Speaker Hall), New Delhi

At the stroke of midnight on November 8, 86% of the value of Indian currency which was in circulation in the country ceased to be legal tender.  Many different adjectives are used to qualify that action – surgical strike, master stroke, third freedom (after freedom from British and license raj), 'Massive swachh abhiyan' and so on. 

Though the government and even the RBI vehemently defend demonetization, the implementation is continuously taking a toll on the common masses and citizens who are put into extreme hardships. The past few days are witnessing a total lack of preparedness by banks and post offices that lack institutional capacity to deal with such a huge magnitude of workload.  Hoards of people began to throng banks and ATMs which is leading to chaos and aggression.  People are starting to break open shops for food as cash is not available to buy essenti…