Cash Crunch

Travel across the country, the people at large is in one or the other queue. Go to any bank of your choice any branch or ATM you will notice a serpentine queue due to acute shortage of cash.  There are two schools of thoughts, to support or to protest the government decision.  Those who have exasperation against money hoarders and black marketers exhibiting approbation for the policy, notwithstanding the difficulties the incumbent is facing.  Others are evoking sharp and extreme reaction at every street and corner.  The division was noticed equally in city and rural areas.  It is postulated that the demonetization of high currency note will have hugely adverse impact over ensuing election results.  Opposition parties are adding fuel from the day one, even though not a single politician – barring Rahul Gandhi – was noticed in a long and unending queue.  Media and ruling alliance criticized Rahul baba’s dastardly act as vote bank politics.  BJP victory in local body polls after cash crunch move of November 8 should not be considered as mandate.  The election in five states is scheduled in the first quarter of the next year will be the litmus test.  Modi’s ambitious step that has astonished the nation will have positive ictus on result or not, needs to be ascertained.  In the present context one can state that the calculations gone wrong somewhere culminated to haywire and hardship at every step.

                  

High power committee was constituted to look after all aspects of digitalization and to suggest ways and means to reduce dependency on currency.  Think about the poor, illiterate, honest rural masses that have not seen the face of bank till date due to fear and pavor.  How digitalization will reach to the farmer’s door is the biggest question.  First and foremost step in this direction is to literate them of complete digitalization process.  It will be time consuming activity.  Rural mass is the main junk of electorate who has exhibited their power – many a time - to topple towering and gigantic personalities from the arena of politics.  Reserve bank has restricted the withdrawal from KYC Jan-Dhan account to Rs 10,000 per month and Rs 5,000 from non-KYC account.  Precautionary measures have taken by RBI to hamper misuse of Jan-Dhan account by money launders and others.  Specialist stated that as fertilizer consumption has reduced during rabi season, cash crunch has negative impact on sowing, difficulties in e-payments and co-operative banks routine activities; will certainly hamper production cycle.  Anarchy at rural level culminates in to lower production, price rise and inflation.  Introduction of custom-made point of service machine at rural level will be the only answer to the present man made crises.

   

Banks are directed to circulate old and defaced notes of lower denominations.  PSU and private Banks are conceding less than 50 per cent of currency quota from Reserve bank.    Looking at heavy rush, bank union has strongly condemned the move and asked management to give police protection to their employees.  Banks are finding it difficult to face the wrath, rage and resentment of the valued customers.   The salaried and pensioner class will swarm near banks and ATM for next 10 days.  Police force shall have to maintain law and order situation.  Customers are reluctant to accept high value currency of Rs 2,000.  Several instructions from higher authority have created confusion among the masses.  So, cash crunch will be the biggest problem.