I am a big fan of ‘Big bold reforms’. Systemic and/or deep rooted social issues cannot be fixed without big bold reforms. However, is India's demonetisation a big bold reform? Will it clean out black money; or is black money sitting in other assets such as property, jewellery, etc?
Or is it political fluf like our ever so clean Swaach Bharat, creating hope, promising change, but lacking in execution? I am not sure. Only time and data will tell.
Estimates indicate that 47 percent of our country's population do not have bank accounts; but more strikingly, around 90 percent of the population does not file taxes. So yes, there will be people inconvenienced by this demonetisation; and these are not just those with hoards of black money, but also unbanked farmers, unbanked taxi drivers, unbanked vegetable vendors, unbanked domestic help – you get the drift? However, I can only talk from my own experience and I am fortunately, not yet inconvenienced.
What I have seen in the past few days has been 5 interesting trends – barter, credit, tolerance, community and fear – all hinting towards an unexpected outcome of demonetisation – plain vanilla camaraderie.
Barter: People like me are going back to the old ways of trade; getting to know my neighbours by exchanging surplus groceries for groceries that I need.
Credit: Our daily-wage-earning-driver postponed his salary collection, until I have cash in my hands. This morning he asked me how to use his net banking account and I am certain, he will subsequently move to salary in e-payments.
Tolerance: People are patiently standing in long queues at banks and ATMs and I haven't seen a single person crib or fight. Instead you see them helping the illiterate fill forms; or excitedly discussing demonetisation; or as at any other time of the day, spending time on their phones.
Community: Our bread supplier collects daily payment from all his clients, in denominations less than Rs 100. He offered this low-denomination-liquid-money to many of us, in exchange for Rs 500 and Rs 1,000 notes, thus burdening himself, with the mundane task of standing in long bank queues to exchange these. He didn't ask for anything in return and while one might think of this as building customer loyalty, I think he is merely being a good human and helping others.
Fear: Unbanked small business owners are not just worried about their current losses but also future risks, with their continued cash-led operations. My local meat and vegetable vendor came for his Sunday money collection with a credit card machine that he had for years, but never really used it. These people believe that this government isn't going to stop here and that they will soon need to start declaring their income.
As in all such situations, there are definite instances of humour (not meant to hurt anyone's sentiments). A newly married friend found her relatives and friends offloading their Rs 500 and Rs 1,000 bills on them, in the long-living Indian money-giftin- tradition. May be, gift registry start-ups might start to see some "money" this wedding season.
Finally, lacking humour, but still rather interestingly, our country's business-ness is taking innovative forms; and corruption is possibly on a short vacation. I have received calls from brokers offering to "take care of my cash problems" at the rate of Rs 200 for every Rs 1,000; calls from unknown named jewellers and property brokers offering to "park my surplus cash" in other safer assets – if only I had hoards of surplus cash hidden in mattresses. Traffic police isn't stopping to fine you for taking a wrong turn or jumping a red light – they know they can't get big money for their pockets.
(The author is Project Leader - Social Impact and Public Sector Practice, at Boston Consulting Group)