Viswanathan K's Thoughts

When the RBI announced that pretty much all the money (98.86%) returned to the system, it led to the inevitable question as to whether demonetization achieved anything useful at all in the fight against black money. It’s a valid question. So what just happened? -          The top guys had probably converted most of the black money into assets like forex, gold and real estate long back anyway. -          But that just means the black money got transferred to someone else’s hands. Did the last person(s) in such a chain of transference bring it all back into the system? -          And so that last person in the chain can (theoretically) be questioned by the IT department: where did he get so much cash? Why doesn’t that tally with his declared income and tax paid over the years? Let’s next consider the political impact of all this. Chidambaram has gone to town with his criticism. Given how articulate Chidambaram is, it’s better to have him criticize than dumb-while-I-was-PM Man

A few weeks back, I wrote about the parameters based on which I felt that we, the middle class, should evaluate demonetization . As the self-imposed 50 day deadline approaches, it’s clear that the daily limits on currency withdrawal aren’t going away in that timeframe. Nor are the smaller denominations of currency going to be available easily. So where is the outrage? Why aren’t there protests yet? Why isn’t the opposition able to capitalize on this so far? I can think of a couple of reasons: -          The majority still feel this is a necessary move to tackle black money. After 60 years of complaining about the evil, most people feel that the pain caused by demonetization can be tolerated for some more time if the ultimate goal is achieved. That hope still remains in many people. -          Shadenfreude: meaning “to take spiteful, malicious delight in the misfortune of others”. Many derive pleasure from the losses to the corrupt. That feeling of justice is still a strong dr

I have held myself back from writing a blog on demonetization all this while feeling stating the short term problems it created was, well, just stating the obvious. On the other hand, the question of whether the move would yield long term benefits, well, couldn’t be evaluated until much later anyway. But the slew of left leaning/ what-has-it-done-to-the-poor articles forces me to write… I am not the least bit sympathetic with the middle class (or rich) folks who criticize demonetization by pointing out the problems it has created for the poor. It’s time we, the middle class, got selfish, and said that we’re going to evaluate demonetization and what it does for (to?) us: -          Does it create nightmarishly long waits to get small amounts of money? Obviously. -          Do people like us have alternate ways of paying for almost everything other than our maids, the newspaper guy and their likes? Absolutely. -          Does it hit many of the hoarders of black money? Yes. W