The bold and unprecedented move of the overnight demonetisation of Rs 500 and Rs 1000 currency notes has had some rather extreme consequences. Virtually every Indian citizen has been impacted by it. While there have been positive impacts such as an instant stop on terror funding via fake currency, punishing those who hoarded cash illegally and curbing certain types of criminal activities, the real costs and other positive impacts apart from the inconveniences are only now becoming known to us:
The logistics of supplying newly printed currency to various areas of the country is probably a logistical nightmare right now. In a bid to ensure speedier delivery of cash to a cash starved citizenry, the help of the IAF has been enlisted to physically carry notes to various bank branches.
According to government sources, now cash will be made available to people via about 2.5 lakh delivery points, mostly in rural areas. Helicopters have already been pressed into service for these cash deliveries.
While some traders are able to open up lines of credit for trusted buyers, many others simply don’t have access to goods and services because of over 80% of the total amount of currency in the country’s cash system have been rendered useless.
Those who were chary of using their credit cards or reluctant to adopt cashless transactions are embracing digital transactins. Some have been forced to learn how to use their computers, phones, pieces of plastic and net-banking to make purchases and find that they quite like it now.
Currency can be demonetised; gold cannot. More people are now taking a leaf from those black market hoarders who stashed their booty in gold and not in cash. One of the negative fallouts of the government's move was a sudden spike in gold buying and a skyrocketing of gold prices the day after. Gold reached Rs 60,000 per 10 grams (almost double the current price), backdated entries were created and about 25 tonnes of gold was bought in the 4 days following the demonetisation announcement.
It is possible to survive on very little, many are discovering while entering some sort of sanyaas mode. There is much that we want; little that we need. Postponing all but essential buying may be good for our own pockets and also makes us feel that wee big virtuous about ourselves; the collateral damage being the bania-dukaan's brisk trade which appears to have dried up for the time-being.
Even as the old and infirm stand in line to convert their meager savings into useable currency, talking cynically about how the real black money hoarders are not really going to be impacted or inconvenienced, they keep up their spirit, lend a helping hand and make the best of the situation.
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