Reported by: banking|Updated: November 25, 2016
When I first heard the news about currency demonetization, my first reaction was that the government is on a roll, taking big steps.
There have been lots of expectations of big and bold steps from Narendra Modi since he became PM. Numerous critics argued that he was too slow and was not taking any bold steps that he had promised. Modi has now changed his stance and is taking up the bold steps that he had promised. Apparently, the past 2 years were spent in preparing for these bold steps.
Modi has now delivered 2 surgical strikes back-to-back – one against the terrorist groups and one against their financial system. The former was expected from him and hence was not very surprising. It is the latter step that has taken everyone by surprise. Modi and his planners have struck a big blow to the anti-Indian forces. This should enhance our security and stability for some time.
In the process, lots of honest and low income citizens have been hurt. I did a rough calculation that about 25 crore people would queue for an average of 2 hours at bank counters to exchange currency and thus about 50 crore man hours would be lost. But the good news for the common man is that the government will gain huge amounts of illicit wealth hiding in private hands of the not-so-honest people. This wealth would ultimately get distributed among the common man and they would get a much bigger bonanza than what they have lost in queues and other inconveniences. I am 100% sure that their reward will be much bigger than the pain. Another expected benefit is reduction in inflation and interest rates.
There is a well known saying: No gain without pain. This is a very apt saying and this is exactly what is happening. People have become used to reduction in pain as time goes by as a result of improvements in techology, infrastructure, policy, etc. But such improvements are slow. For rapid gains, some pain is required. The perfect example is that of a catepillar becoming a cocoon (pain) before becoming a butterfly (gain).
I confess that it took me only 20 minutes to exchange my currency, without getting any special treatment. However, I am prepared to endure pain if it results in greater benefits in the future. I appreciate all the pain that bankers are going through in this phase, but they too will see the benefits as more and more customers start using banking products and channels.
I look forward to more bold steps from our leaders to transform India into a modern and prosperous nation.