Demonetisation Modi Style
Prime Minister Narendra Modi has added another feather to his cap by delivering a severe jolt to black money hoarders, which is a welcome move. This is a very bold initiative in announcing the withdrawal of Rs.500 and Rs.1000 currency notes from circulation. Hoarders of black money will feel the pinch as their wealth dwindles overnight–the huge bundles of higher denomination notes in their possession become worthless papers. It is worthwhile mentioning here that those who availed of the VDS scheme can consider themselves lucky as they could salvage a part of their ill-gotten earnings by coughing up 30 per cent tax. However, there are issues at execution level in the beginning, which is bound to be there but evaporate after some time. To tame the scourge of black money of such a huge dimension, such drastic steps are required, resulting in some inconvenience to general public but it is justified. Electioneering by the political parties will suffer, so it is good for the society, as party candidates will have to spend less, which will be beneficial in the long term. Role of money bags and criminals will be eliminated. Elections will become law compliant and transparent. Good candidates will be encouraged to come forward and fight elections. It cannot be gainsaid that this system forces everyone to access to the banking system in getting replacement of old currency notes on hand. No doubt, there will be an initial hiccup in coping with the situation, but it will be for the betterment of everyone in the future. The proposed release of new currency notes having high security features would definitely protect the currency system of the country. The next move of the Centre and RBI must be to pressurise all merchant establishments to conduct transactions through POS, debit card, credit card and e-wallets, ultimately to bring the last transactions into the banking system. However, some analysts of secular brigade are opposing this decision, but they must understand that if you need a drastic change in the system, you definitely need some steps like this. No one, not even Modi has said that this step will solve the problem of black money and it is quite obvious as well that we cannot solve a hundred-year-old problem by an overnight decision.
But this decision will surely improve and inject black money into the system. Here comes the second part and that is generation of black money. Reasons have to be identified and plugged in the toughest possible manner.
The powerful man of the world is on the floor now to play his cards. Donald Trump is now the official 45th President of USA. All will have a sharp observation on him to see the changes and how he will see different worlds differently He might be wrong in choosing his words during some election rallies, but he talked of issues which all Americans wanted to hear. Also, he called Pakistan`s bluff with regard to their supposed fight against terrorism. He will be a game changer in politics and foreign policy. India will gain from this with the exception of some jobs and outsourcing business. As President, he could well disrupt the balance of power in Asia, shifting it in favour of India, which will be a serious jolt to China. It is noteworthy that both China and Pakistan have been milking the US as a cash cow for decades: China by running a huge trade surplus ($366 billion in 2015); Pakistan by playing a double game, soaking up US aid (more than $30 billion since 2002), while pretending to fight radical Islam. But Trump in the saddle, he would cut down on the flow of cash to both countries. Having said this, I would like to mention that a section of the biased media of the US and also elsewhere who backed Hillary Clinton, who projected baseless surveys based on a miniscule sample space and tried to pull wool over the people’s eyes, has also been exposed. But remember, there is this silent majority–the majority who watch and then when they respond, it is decisive and surgical.