The country has just been served ‘kadak chai’ with a dollop of NaMonomics, by the chaimaster par excellence, ! This is a chai with a punch.. it has been able to knock-out terrorist and stone throwing activity overnight. At the same time, the ordinary citizen is high with the taste waiting for the benefits of a well brewed kadak chai, but the politicians and anti-establishment folks have not been able to understand the taste because they are used to ‘readymade chai’ which is a weak brew.
When lions roar, they bite too.
There was bound to be chaos becasue the announcement did not give anyone any time to be prepared but this is temporary. This much needed national de-toxification that was announced in the evening on 8th November by the Prime Minister with the demonetization of Rs 500 and Rs 1000 banknotes. Since then, there are thousands of memes floating virally around the internet. The demonetization has resulted in chaos across the country as people rush to banks to deposit their money, obtain Rs 100 notes for expenses and generally try to save their funds.
This is a welcome move and is already showing results… in less than a week! However, there are voices against the move, by opposition parties, but that’s another story.
I am summarizing my observations…
Reaping the Fruits of Kadak Chai
- Terror funding dries up and activity seems to be at standstill
- No takers for stones in Kashmir (a big help for J&K Police)
- Pakistan currency printing press counting losses due to unusable printed Indian banknotes
- No one is complaining or bad- mouthing the government (it’s only the opposition) … all say this is a good move and for the benefit of the country so it’s cool
Damage Control
- People exchanging banknotes will get the finger inked with indelible ink (like in elections) so people do not come multiple times and first timers can be serviced
- Temples have been asked to deposit their collections in banks asap to help bring small denomination notes back into circulation
- Acceptance of old notes extended to Nov 24
- (14 Nov) PM appeals for time till 31 Dec
- Airport Parking is free
- Private hospitals and chemists allowed to accept old banknotes but they are confused
- FinMin etc say RBI has enough cash
- No toll being charged on roads and highways
- Air force planes can be used to transport cash
- 2 lakh Micro ATM (handhelds) to be deployed in rural areas and limit of the correspondent to be increased to 50k
- Mobile vans to offer banking services
- SBI chairperson says Rs 20 notes will soon be dispensed thru ATM
- Some malls have stopped charging for parking
- Transaction fees on debit card withdrawals reversed
- NPCI waives 90 paisa RuPay transaction fees
- Insurance companies seek higher premium on cash movement in view of high volumes
- RBI forms task force to speed up and oversee recalibration of ATMs
Fallout of the national detox
- Bank defaulters paying up
- Child dies when hospital does not accept old banknotes
- Stone pelters in Kashmir have vanished along with the 500 rupee notes proving that the Kashmir unrest is not about “kashmiriyat” but about money (update 16 Nov 2016: Input from my friend Vaibhav – the J&K Police had already reported a fall in the stone pelting incidents so this demonetization may not be the “only” reason. The shortage of 500 rupee notes may have catalyzed the stoppage. Thanks Vaibhav!)
- No beggars on Mumbai streets
- Opposition parties yet to decode the 8/11 action whether it is good or bad for the country…. without negative reactions from public they seem clueless
- Aamir Khan came out in support of the demonetization which was a surprise because no one heard him open up during the Pakistani artist jhamela
- Train and air tickets, gold sales hit the roof on 8/11 night
- Train and air tickets were games for converting old banknotes for a day and then stopped as the sellers got wise to the scheme (buy a ticket and then cancel for refund)
- Illegal booze sales suffer in prohibition states
- Capitation fees will be a problem when college and school admissions start… by then the system may have been gamed
- Barter transactions being reported in rural areas in the absence of cash
- Retail business is down, auto and taxi is also down
- Real estate deals hit as sellers desperately trying to reverse deals. New sales seem to be at standstill as no one has enough black money to consummate a deal
- Some unknown “rich” people have thrown their cash riches out of the window, burned it, given it away to unknown people in panic and others are using money mules to convert their money
- Lakhs of JDY accounts have become active and hold 49k or more deposited since 8/11 … Govt says they will keep an eye open to check money laundering (I doubt the capability …and this sounds like another page from the NGC book of rumors)
- Photocopy shop near my daughter’s college accepts 500 rupee notes @ 450 for any purchase (I expect the premium to go up to 50% as the 31/12 date nears)
- Betting industry got hit bad … on 8/11 illegal bets on the US elections got screwed to the tune of about 1000 cr.
Problems
- ATMs have to be recalibrated for new 500 and 2000 rupee notes as well as 20 rupee notes
- Regular banking business suffers as all staff have to help in cash transactions
- New notes have no extra security features
- Govt announced that it would levy 200% penalty on black money declaration after the currency swap but Income Tax law does not have provision for this
Rumors
- The mother-of-all rumours was that the new banknotes have a nano GPS chip with superpowers. This had frozen the blood of many black money holders and earners
- The 2k note bleeds which is not true
OMG
- NIA/Indian Statistical Institute report says Rs 400 cr fake notes were in circulation
- High profile diamond guy who gives crores as Diwali bonuses declared 6k crore black money….now seeks redemption
- Digital wallet operators offering quick setup and bank offering free POS to get businesses on board for cashless business (will they be able to handle the load once this chaos is controlled)
- PM gets emotional in his speech
- UP Chief Minister says black money is good for the economy
- Shiv Sena signed a memorandum supporting the Government but is talking anti government the next day
- China has come out in support of the demonetization and suggests that India take a look at the Chinese experience
- Australia is being advised to follow suit
A lot continues to happen and you may please add to the list.
