Demonetisation Googlies

Muthiah Murlidharan bowled only a DOOSRA, Mr Modi went one ahead, spun a TEESRA. Demonetisation is his third assault on black money. How many demons, if any, will it slay, the jury is still out on that. But the measure is reinforcing what every chronicler of ‘money’ has chorused. ‘A constant in the history of money is that every remedy is reliably a source of new abuse.’ Man’s cupidity is unbounded. This measure to ambush ‘black’ cash too is ending up creating more of it. So, the ‘imandari ka parv’, as Mr Modi describes demonetisation, has so far struck many different strokes.

(i)               Many a hapless traveller stranded with only the trashed notes and staring at starvation was tipped to go to the note-changers for succour who deigned to offer- Rs 400/700 for each proffered Rs 500/1000 note. Good Samaritans too risk-reward their munificence. Doubt if that extra rupee will be reported to the taxman.

(ii)              Petty bank account holders were pleasantly surprised to find their unfancied accounts could earn ‘rent' in addition to interest. They merrily ‘rented’ their accounts for depositing others’ banned notes, the rent rising as high as 25% of the amount routed. Mr Modi’s instrument for financial inclusion, the Jan Dhan accounts are said to have been particularly seduced.

(iii)            The grey market in bullion, for a while, did brisk business, exchanging gold for cancelled notes at premiums ranging from Rs 10000 to 20000 per 10 gms over the official gold rate. One report speaks of 25 tons of gold sold in the first four days of the ban order. Most busy was the grey market in the PM’s own state, Gujarat.

(iv)            Even Gods are making hay; donation boxes in temples overflow with cancelled notes. Defunct notes worth Rs 4.4 million made its way into the temple hundi at Sri Jalakanteswarar temple in Vellore. Ironically, the worthless, untaxed hoard in the donor’s hand now becomes legit tax free. In the God’s earthly realm even impure notes get laundered white. Ganga Maiya too found herself awash with banned notes near Mirzapur.

(v)             But the parsimonious housewife will be unforgiving of Mr Modi. Her instinct for thrift has been sadly abused. She had painstakingly cut corners to squeeze some savings out of the house keep money and stashed it away from the prying eyes of her husband for a rainy day or more likely, a visit to the jeweller. All of it for ease of concealment had lain hoarded in Rs 500/1000 notes. Alas! just when the family needed it most, she found her savings stripped of immediate purchasing power. Not only did she lose control over her savings, she also lost face, and had some explaining to do as to its source. Anyway, the husband had the last laugh.

(vi)            Mr Modi enthused congressmen when he mocked them "those involved in big scams, like 2G and coal scam, now have to stand in queues to exchange Rs. 4,000". Congressmen didn’t know they were so many across the country, the only prominently identifiable congressman standing in a queue was Rahul Gandhi.

(vii)          A day later ,a 96-year-old lady escorted by relatives exchanged annulled notes at Oriental Bank, Ahmedabad under the full glare of camera lenses and TV crews. She was PM, Mr Modi’s mother. 

(viii)         Media was agog with wild rumours. One fancied a Rs 2000 note embedded with NANO GPS chip that terrestrial satellites could locate even deep down to 120 mt. below earth’s surface. At that depth why bury notes when one can extract coal instead at some places.

(ix)            counterThe ‘sanskritization’ of economic footprints begun with the new symbol for the rupee was carried a step forward. The 2000 note for the first time carried numerals in Devanagari script.

(x)             The famed Indian art of jugaad too was brought into play to ease somewhat the leg-aches of those standing in long queues for hours to reclaim their savings. A website ‘book my chotu’ offered to hire out a stand-in for queueing up before bank counters or ATMs . Not many of the proxies ,though, were kids, that is, chotus, but fully able-bodied men out of work.

(xi)            An example of a jugaad that was simplicity personified surfaced in a PSB. An innovative cashier started entering Rs 100 note deposits by people as deposits in Rs 500/1000 note tenders, then made ‘out of court’ swaps with Rs 500/1000 note holders at a discount of 20%. As simple and fool proof a jugaad as can be.

The demonetisation measure is hailed as bold and innovative. But are these any less so? Time is not up, as we go along I am sure more creative strokes will be struck against Modi’s TEESRA.