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A forceful and positive thrust
You can't have the cake and eat it too. Similarly, absolutely adequate planning and demonetisation can't go simultaneously. In other words, recalibration of ATMs from before and other measures suggested by left liberal economists for exorcising the demon in demonetisation was not possible.
The fact that 60% of the high denominations notes did not come back to RBI via the banking system by 18 Nov, shows that demonetisation has jammed the owners of black wealth in the form o f 500/1000 cash and that it is hurting them.

SBI estimated on 2nd December 2016 that total money coming into the system in the form of high denomination will be around Rs 13 lakh crore (as against Rs 15.44 lakh crore high value notes as on 9 November), and around Rs 2.5 lakh crore, on a conservative basis, may not come back into the banking system post demonetization. That means at least 16% of black money will become useless. Further, all high value deposits in the banking system will be scrutinised by Income Tax department for unearthing further black money.

Yes, the cash withdrawal limits are hurting many honest households, farmers and small businessmen. But our suffering for 50 days, will help the black currency asset owners lose considerable value of their cash. Therefore, the collective conscience of the nation is for demonetisation.

Actually, Modi is on to a long-term experiment in India. He and the government aim to re-engineer human souls and minds as much as socio-economic realities. The most significant change India needs is a transformation to honest and virtuous society. Success and failure in this grand effort cannot be measured through the conventional terms of technocrats.

Moreover, the government has not taken here an isolated step. It has in the last two years taken several measures against black money held abroad. Some disclosures by Swiss and other nation banks/authorities can be reasonably expected in near terms. Earlier this year, it offered a tax amnesty and imposed a punitive tax of 45%. Now, demonetisation is being followed by measures against Benami property. 

Nandan Nilekani, creator of Aadhaar has opined that the systemic shock of demonetisation will accelerate the digitisation of the financial transactions. A few examples bear out his assessment.

In Kolkata, 'College Street books hub takes e-way out of no cash blues,' 'Plastic money boost for handicraft sales,' .'In Assam's tea gardens, e-pay is new custom.' These are news headlines in Times of India dated 28/11/2016. This shows people are happy to change with time and necessity.

In my article 'Black Money in India and its Current Status' published in South Asia Monitor on 19/10/2016, I had stated 'Therefore the government must address the following major sources of black money: 1) Large cash transactions 2) Non-transparent electoral funding process and 3) Misuse of tax-free income of farmers.' Item 1 has been addressed by demonetisation. The 2nd and the 3rd remains to be attacked.

(The author is a commentator on contemporary issues)

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of merinews.com. In case you have a opposing view, please click here to share the same in the comments section.
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