Demons Laughing In The Face Of Demonetisation  

Mahesh Vijapurkar

Demonetisation of Rs500 and Rs1000 notes is supposed to impact black money, remove counterfeits from circulation which would also curb terrorists' dependence on it. All lofty, indeed, going by these government claims, but the shoddy manner in which it is being implemented is making a mockery of it all.

Economists are peeling the layers off the onion and each day, new explanations of its consequences are emerging fast and furious in a measure that leaves no room for any Narendra Modi's hubris. Of course, he would certainly partly meet the objectives, but demonetisation has to be only a part measure of the several steps needed to be taken to cleanse the system.

Electoral reforms to eliminate a massive flow of funds by candidates is one thing, but that would not be possible by merely state-funding. It would call for a restoration of a moral rubric to politics. What prevents amassing illegally secured tax-evaded wealth by those in the power matrix? The bureaucrats, from policy making levels to the delivery end are also part of this.

A lot of the 86 percent of currency in circulation would decidedly become trash, though we have not heard of any legendary money bag dying of a heart attack yet at their grievous losses. Their worry perhaps now would be the black wealth than the black money – they are different, because the former nests in benami properties – the black money lost being only a small proportion of the total wealth.

My maternal grandmother would explain this by employing a simple analogy. A thief who has entered your home when all are asleep cannot scream when stung by a scorpion. He would only have to quietly leave to find an antidote for the venom than be bothered about stamping out the creature. That is the householder’s business.

There already is a confidence that the lost can be restored soon enough while the lament is that it could have otherwise been, if there had been no demonetisation, an addition. Avarice for the illegal is by now a normal cultural part of our lives, cutting corners to render a favour for profit is a standard feature of public life. Private corporates are no exceptions because they too fuel corruption.

The owners of the misbegotten wealth are typified by an official in Maharashtra who was caught red-handed by the ACB during a transaction involving a Rs 50 lakh bribe in the trashed bank notes. This is something he would have to process into white by end-December and obviously, they are dependent on channels already furiously working towards that end. The lynchpin to this is a corrupt official.

It could have been a strategy to maximise the gains because a bribe-giver who is desperate would to get rid of his old banknotes that needed to be hidden from the taxmen. That, plus the anxiety to get the work done, was perhaps the reason behind the strategy but in that particular case, the man went to the ACB and laid a trap. Apparently, he was honest or didn’t have the old banknotes ready. But officials of that genre would be in demand now.

It has been explained to me that their hope rests on a system where accounts can be fixed, and thus lower penalties levied, and as already has been seen, the Jan Dhan bank accounts have become a conduit to the money laundries. It would help raise a fresh lot of black money for the greedy inspectors of books, in a new cycle, all in new currency with opportunities to invest in realty where prices could drop.

Though demonetisation has been a setback to the black economy, it is not going to end the malaise of corruption for greed of the human being who has discretionary power, a willingness to exploit it to fiddle with the system for personal gain, and if needed, share it with those who would wink at it, is so widespread and deep-rooted that the demon is not to be easily vanquished. It is, simply put, a Sisyphean task.