RESTRUCTURING INDIAN CURRENCY - MODI JI, THE MASS HERO

RESTRUCTURING INDIAN CURRENCY - MODI JI, THE MASS HERO

Scraping of Rs. 500 & 1000 notes from midnight of 10.09.2016, is a historic & very bold move taken in the national interest by our Prime minister Sri. Narendra Modi. Like one shot two birds, it will curb corruption, inflation and at the same throw external challenges. In fact it is real surgical strike on parallel economy and roots of terrorism, both killer diseases.

The first historic decision to scrap higher denomination currency took by Late Morarji Desai in 1978 (scrapping 10000, 5000 & 1000 notes) to curb corruption. But the present decision is more challenging and will have real impact on entire nation, as the Rs.500 note is the currency ruling the roost at present.  In 1978 hardly any common man new about the higher denomination notes in circulation.

I am sure it’s first impact will be on soaring property prices in urban India. As our country has limited land with second largest population, naturally the pressure on land will be very high. It is a fact that we can produce anything but not land, hence land remains as commodity in demand always. Despite land reforms, urban land ceiling act etc, the influential individuals, and corporate entities took control on land using the unaccounted money power coupled with loosely structured laws in vogue. The present situation in our country is that even Governments are finding it difficult to implement housing for poor due to its depleted land banks in favor of its unethically favored son in laws and sons.  The present step of control on currency followed by bringing in comprehensive national land policy will certainly make the housing affordable in our nation. At present it is a real shame on our part to say that even for middle class owning a house is a dream.

In fact in case of common man, the cash transactions are not black or unaccounted money. The trade and business entities in an urge to grab notes are encouraging bill less or cash transactions with full cooperation from the law implementing authorities. Public are falling for this biscuits, as buying in cash is perceived to be cheaper due to evasion of VAT. In this process the real beneficiary is the trader who is accumulating black money at the cost of national wealth. The present move coupled with quick and strict implementation of GST with single point taxation (at source) will certainly control this evil to large extent.

The other major benefits to nation includes less influencing on voting, reduced expenditure on luxuries, improved realistic liquidity, efficient currency management, improved banking systems etc leading to strong nation. It is very important at this juncture to use this as an opportunity and come with sound strategies secured and covered with constitutional protected acts.  The things like new currency with tracking system, limited availability of higher denomination notes, limited withdrawals from banks etc has to be implemented with iron hand to ensure effectiveness of this step taken by our leader Na Mo.  

There are already concerns expressed about the role of proposed Rs.2000 notes in economy and doubts are being expressed about their movement into bigwig coppers. The effective currency tracking, limited edition availability and leaving no opportunity for another currency withdrawal scheme even in long run is real acid test for our PM and let all of us strengthen his vision and make the perceived mission impossible as mission possible.  

B  Guruva Reddy

grbonthu@gmail.com, 9866889246