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The war against cash in India seems to be just like most government policy directions - total fiasco.
India is wiping out the labor and capital (wealth) of millions of its citizens with its misguided policy implementation.
Evidently, the middle and lower class citizens are those bearing the brunt of Modi's wishful thinking decree. There are always means for the wealthy to scale the hurdle in instances like this.
By the stroke of a pen, politicians can ruin the life of hard-working people who don’t even know anything about their government. Possibly, there are more than the eye can see.
Shanu Athiparambath is a New Delhi-based political and economics analyst. Shanu paints a picture of the situation from the angle of a middle class Indian.
Cointelegraph: As a middle class Indian, what impact has the demonetization had on you so far?
Shanu Athiparambath: It has been a month since high denomination currency notes were demonetized. I haven’t used currency notes for a month. I use my debit card or mobile wallet to make payments. I order my food online, travel in Uber cabs and buy pretty much everything from the supermarket. I can afford it, but most Indians can’t. This eats into my time because not everybody accepts e-payments and these devices do not always work. If I am going somewhere nearby and do not have the time to book an Uber cab, I run. I haven’t withdrawn money from an ATM for a month because there is always a long queue. Sometimes, entire days are spent negotiating contracts with people.
CT: Would you say there is a broad-based public support for scrapping 86 percent of the money in the system?
SA: I think most Indians support demonetization in principle, though they think this could have been implemented better. They suspect the rich have so much cash stashed under their mattresses. So, they tell themselves that they are happy to suffer if the rich suffers too. But life is very difficult for everybody, and they are quite open about it. A lot of the opposition comes from left-liberals but that is because they hate the right-wing Prime Minister. It is not a principled disagreement. Economists tend to be against this but the economists who are part of the establishment have been very dishonest about it. This is very strange because some of them are otherwise fairly sensible.
CT: Can India become cashless?
SA: Yes. Of course, it is possible. But we can’t get there overnight. Close to three-fourths of the people do not use the Internet, even occasionally. About one-fourth of the people are illiterate. High-speed Internet connections are not the norm, even in large cities. So cashless transactions are not always convenient, even when you have debit cards and mobile wallets. We have a long way to go.
CT: Have you heard about Bitcoin, and do you think it's the remedy for your current situation?
SA: Obviously. I’m a libertarian and have heard about Bitcoin.
The Indian central bank doesn’t try to regulate Bitcoin because they don’t understand it.
But when Bitcoin becomes commonly used, I am sure that the government will step in. When they feel that they’ve understood it, they are going to regulate it. There will be a shortage of currency notes for many months, and I am sure that more and more people will take to Bitcoin.
CT: How does the situation make you feel about the government and rulers?
SA: It is unfair to prevent people from accessing their own money. Money is a medium of transaction. If you can’t use your own money to engage in transactions, it is almost like being robbed. This is not a well-thought out decision. It is very clear that the government doesn’t understand how the economy works. Many small firms will soon go out of business. The government has destroyed trade just to punish a few people whom the government sees as criminals. Much of the Indian economy is informal because complying with rules doesn’t usually make sense. So, most of the unaccounted money is not in the hands of criminals, but in the hands of decent fellows. I never had any trust in the government, but now I am even more suspicious.
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