Travails of a cashless economy

Newspaper reports say that banks in almost all the metropolitan cities and State capitals are running short of cash in their ATMs, from Mumbai to Kohima in distant Nagaland. Reports also say that bank branch managers are saying that they are forced to dispense limited amounts of cash to individual customers because of erratic supply of cash by the RBI. Formally and officially, the RBI has withdrawn limits on withdrawals. But in actual practice, many banks even in Mumbai are allowing withdrawal of only Rs. 1000 per customer while a few others have set the limit at Rs. 2500. A leading newspaper has reported that ATMS near important places like hospitals and railway stations around Mumbai frequently become non-functional for days at a stretch. International banking circles suspect that the continuing cash shortage in India could be part of a deliberate government strategy. The Financial Times of London quotes an analyst of Credit Suisse as saying: “It is obvious that the Modi Government wants to slow down the cash money in the economy.
So it is because of a deliberate Government policy that i) most ATMs have no cash most of the time; and ii) that though the RBI has formally ended withdrawal limits for customers, banks are being forced to set a limit on withdrawals. Then, those who deposit or withdraw cash from banks beyond a certain number of times a month have to pay heavy penalties. This is one of the coercive methods of the Union Government to discourage cash transactions, regardless of the untold suffering this policy is causing to the common man. That the ruling party is scoring one electoral victory after another does not make these hard facts to be fantasies. Also, if the NDA Government continues to pursue this policy ignoring public suffering, it cannot avoid the consequences of this policy on the national economy in the long run. It would be interesting to watch whom Arun Jaitley blames then for the economic anarchy this policy has led the country into.
But that is yet to come. For the present, people across this vast country, from the coast of the Arabian Sea to the hills of Nagaland and beyond, are being put to great difficulties for no fault of theirs. None of the avowed objectives of demonetization, namely, curbing Naxalite and Islamic terrorist violence and stopping circulation of forged notes being smuggled across the borders by Pakistan has been achieved. The Naxalites are killing security force personnel in encounters, Islamic terrorists are killing Army men in Kashmir and forged notes are flowing in unabated.

Tuesday, 2 May, 2017