Shades of money: Good, bad and ugly
Since demonetization, with no money in banks, ATMs and in pockets, we are realizing the value of money, particularly small denominations. When high value currency notes of Rs 500 and Rs 1000 notes were floating around, literally, people used to carry them in shopping bags and if they couldn’t, they stuffed the currency notes into gunny sacks with their mouths stitched and stored them in some secret room.
I am not exaggerating. My brother who was principal of a residential school in a small town had once told me that’s how chains of private corporate schools, colleges and medical and engineering institutions had collected cash from parents of students who aspired to become engineers and doctors or dreamt of becoming dollar babus in America. That was nothing more than buying, not learning, education. Needless to say, a lot of this cash was unaccounted for since it was hardly shown as income in official books. If that was the case with chains of educational institutions thriving in the two Telugu states and other parts of the country, what about private corporate hospitals, real estate, the fast moving consumer goods (FMCG) market, upscale fine-dining restaurants where a bottle of imported Scotch or wine would cost more than that of an average monthly earning of a poor man?
If we start delving a bit deeply into spending habits of fat cats and money bags, it’s appalling. As recently as last month, Bellary mining baron Gali Janardhan Reddy was reported to have spent Rs 550 crores on his daughter’s wedding in Bangalore by recreating the grandeur and opulence of Vijaynagar Empire. In other words, illegally acquired wealth, call by any name, is manifest in every walk of life. It’s omnipresent and omnipotent. If it is not, many would not have been sitting in positions of political power, living in palatial buildings, driving swanky cars, patronizing the best bars and eateries and holidaying abroad with families and even friends. Was it not a sign of too much money in the country, that too in a few hands?
Every political leader talks of the ever widening rich-poor gap. In fact, it’s a fashion to blame the party in power for exacerbating it. But, in reality, no government at the Centre or in states has done anything to narrow down the gap. When the government has failed in its ‘equitable monetary justice’ attempts, people themselves have resorted to making that ‘extra buck’ to elevate their living standards. Thus parting with a little cash for quick, prompt and efficient service has become a norm and part of life. If tip is normal in hotels and restaurants, ‘greasing’ the palms of staff from an assistant to a top official in government offices, is
sure way getting personal work done. It’s a win-win situation for both sides. If you ‘pay’ you can leave with a smile; if you don’t, you have to wait until some mercy is shown to you by a kind soul.
This mutually beneficial arrangement has been perfected so much that doing something for a consideration is no longer seen as an illegal or unethical practice. In such a situation, Prime Minister Narendra Modi’s war on corruption using demonetization as a potent weapon scorches only the surface; it can’t root out the scourge. Even limiting the money supply in the market and vacuuming lakhs of crores from money hoarders won’t guarantee an end to generation of unaccounted money. In fact, it has already started.
The Prime Minister and his team of officials who had planned the demonetization strategy seem to have underestimated their compatriots’ ingenuity to beat regulations and laws. Sooner than expected, street smarts have started beating the official machinery in its own game, forcing the Central government and the Reserve Bank of India to keep changing their stipulations for swapping old notes for new, deadline for accepting banned currency, etc.
Now, it’s common knowledge that lots of people with black money deposited as much legally permissible cash as possible in the accounts of their friends, relatives and even servants on the condition that they would return the money after deducting a certain percentage of commission (20 to 25 per cent or more). Some wise guys have collected post-dated cheques from the ‘beneficiaries’ while some others started exchange businesses in connivance with bank staff.
It is also widely acknowledged that large-scale hoarding of small denominations has caused acute scarcity, forcing those in need of change to buy 10, 50 and 100 rupee notes from money agents paying a hefty commission. A more wily way of milking people of their hard-earned money when they go to government offices is collecting promissory notes that they would pay the agreed amount in new notes for the work done now. In some instances, ‘service fee’ had been demanded in new currency notes. Since only Rs 2000 notes are available in the market, the recipient stands benefited more!
The bitter truth, whether we like it or not, is as long as there are people who believe that they can beat the system with money by hook or by crook and as long as there are people who happily accept and do anything and everything for a consideration, the virus of black money continues to proliferate. Its staple feed is greed and there is no dearth of it in the country.
Nevertheless, the demonetization antidote Modi administered on November 8 would help flush out a major portion of hoarded money (black or white is difficult to say) and neutralize fake currency, at least for the time being. The side effects are well known and everyone from beggar on the street to a white-collared executive is getting a firsthand experience of how to lead a life with limited cash in the valet and realizing the value of money.