How to bring in economic reforms in a politicized economy.

Many of us became economists after the #demonetization move and thought of trying to put up my economic thoughts to the ones, who, for sheer personal or business interest, have been negating the long term impact of such a game changing move, which has economic reform at the root. Which to me, would be a killing career move for a political leader like Modi; that too at a time when the economy was growing;  and had a potential risk of stalling a running vehicle called India. At a time when political and economic stakes are high, even a naive mind like me would not even think about that, leave apart taking that decision to implement.

35 days impact on Indian economy:

• RBI says about 4.6 lakh rupees worth of new currency notes issued so far.
• Over 12 lakh rupees worth of old currency notes deposited to various banks
• Inflation has gone to the lowest level i.e.  3.6% in November 2016 

Inflation CPI, 2016 data

• There is a lot of air around real estate, services sectors and signs of massive economic slow down- over 70% businesses have reported that the demand has fallen by 50% or more in their respective businesses.
• Finance Minister says tax collection can provoke lower tax, loan and other collateral  restructuring in the event of higher income through the tax amount collected- would change the economic landscape of poor India. 
• Above 300 crores worth of unaccounted currency seized so far and credit of that goes to ACB, IB and other agencies who are active. 
• Also, all major money exchanges when the general public is failing to withdraw even 10,000 from their account; was possible with the help of bank officers, mediators and businessmen or politicians who were holding this black money.
• Govt is taking a strict action. A senior  RBI member was caught for his involvement in money exchanging of old currency in Bengaluru.
• All political parties crying foul as this was done just ahead of UP poll
• Mamta, SP, BSP, Congress, AAP seems to be the worst hit, though BJP people are being caught and highlighted.

Do you think, if this would have been implemented well- through an advance notification, the implementation would have been much smoother. I dont think so. Every person who had black money could have had picked a vehicle to convert the same immediately, meaning the money collected becomes 'black' again. 

Situation currently:

• India has a parallel economy, some estimates this to be to the tune of  70%- meaning that this economy is not paying taxes, not depositing the money into the banks and then running hawala, money laundering, fake investments and other form of illegal investments, which at large offers a threat to the nations' economy.
• This, also means that 70% of the people employed with the parallel economy will have to witness a hard time in days to come.
• I could not visit a bank, even once to withdraw the money, have used ATMs in the first few weeks and could not withdraw money, all while sitting in the capital of the country.
• Various sectors, including construction, Mobile, Services, consumer goods have started reducing their manpower costs by laying of workers, to the tune of 40% of their total staff. 
• Digital and payment companies have gained though as there was a lot of infrastrcture requirement and gaps in terms of deploying payment instruments, POS and other devices
• Even after all of this, every stakeholder from opposition parties, few bank staff, ATM management operators, mediators, whosoever could help convert the old currency with the new currency against a commission- has contributed for making this a big failure.
• Many of the citizens  died at banks/ATMs because of the anger or situational pressures like not being able to get money for the marriages or other important occasions planned/ or unplanned.

Long term impact:

In no way, I am advocating BJP agenda or am connected to any political party. The only connection I hold with BJP is, for fundamental citizen values, or value principals approving equality. I don't see this scheme as a failure even when I could not withdraw money or had to cut my expenses. In no situation; I would oppose this initiative as an Indian because this movement, will bring in 'the change'. The change in the way people generate income, pay taxes, contribute towards society and  equality, distribution and national assets availability to each citizen. 

We are talking about over 37% people who miss their one time meal  each day or over 67% of the population who don't have access to basic human facilities like clean water, toilets, nutritional food, house, education, healthcare or the ones who do not have any source of employment.

We are talking about a government who operates the machinery, not on commission and then parks that commission money to a Swiss bank account or other tax heavens;  but works in favor of people, governs through people and with people's contribution into the nation's economy. The current cash based economy and governance has  flaws and #corruption is a by-product. Look at that while you deal with any government agency today. 

Modi should be able to address to these issues at large as the PM of India and prove people wrong who are quoting this exercise as a 'blunder' or political 'cover-up' . #demonetization is also #economicreform #digitalpayment #newagebanking #MyGovIndia