The menace of black money has loomed large over the Indian economy, becoming almost an accepted social more. The disease has become so endemic that black money has become an accepted player in the economy. The proof of the pudding is in the eating! Why should our bourses crash when any move against black money is made, rather than rise in the joy of a cleaner economy?
The fight of the government against black money is indeed laudable. The overall public policy commends it. ‘Right Thinking’ members of society applaud it. Legal proceedings will no doubt be instituted, challenging the move as being hurriedly implemented, depriving citizens time to prepare and a lack of notice to make alternate financial arrangements. But is that not an anomaly, since the very objective is to disable the black money hoarder from preparing himself and making alternative arrangements?
This policy will no doubt be viewed differently by varied sections of society. To the wealthy but honest tax payer, it causes no concern, but rather glee that other wealthy persons who have not shouldered their share of the tax burden are now ‘fixed’. To the middle-income salaried employee, whose tax is pre-ascertained and substantially deducted at source, the move causes no worry. To the poor who eke out an existence with minimal disposable income, the move against the wealthy (who in his eyes live off the fat of the land) is well deserved, and in his innocent optimism, he believes that the deprivation of their ill-gotten wealth will trickle down to him.
In contrast, those who will now spend sleepless nights are the self-employed tax evaders, corrupt bureaucrats, politicians, judicial officers, police and those in the private sector, who have got used to kickbacks. Apart from their own ilk, it is doubtful they will find sympathy anywhere; certainly not from the courts. After all, currency notes make for soft mattresses but also restless sleep.
Unfortunately, a scheme to root out a cancer in society with all promise of success is criticised even by those who would otherwise commend it. For the devil is in the detail. My staff, whose marriage was to take place days after the announcement, did not have the cash required to pay the caterer, vegetable vendor, flower seller, tent man or even the priest to officiate. Not to mention the hundreds of other things that a marriage entails. The money he had arranged to pay for all this was useless, and all he could exchange was `4,000. Petrol pumps declined to return change as it was unavailable.
Those fabled angels of mercy, the hospitals that are now devils of collection, refused to admit patients in the absence of cash deposits and refused to accept demonetised notes. At the end of a long queue, the bank informed no new currency notes were available.
The fault lies in inadequate planning and inefficiency in implementation. Doesn’t the RBI Act mandate that a reasonable time be given to people to make alternate financial arrangements to avoid large-scale mayhem and chaos?
The answer given is that for the larger good, some collateral damage must be suffered. Perhaps the desire for secrecy left the government wholly unprepared to deal with the aftermath of the declaration with insufficient currency notes to meet the needs of honest citizens. A legal question arises as to whether the bank as the trustee of one’s monies can limit their access to it. The woeful lack of effective implementation raises the questions, leading to speculation over the government’s motive. Was it to freeze the Opposition in elections in critical states?
That the government’s action has crippled all political parties in the ensuing elections is obvious. Does that then illegitimise the government’s move? There is a principle in Corporate Law that if an action is intended for the welfare of the company but indirectly benefits some directors, it cannot be faulted. So in this case, if the action is intended for the benefit of the public but incidentally benefits the government, it cannot be faulted. But if it was the other way around, it raises many questions. Unfortunately, the hurried action of the government, ill-prepared for dealing with the consequences, leaves one wondering! But then, if the final outcome is huge amounts of black money being ferretted out (and evaders being brought to book), one may well say that the end justifies the means. That, only time will tell.
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