Union finance minister Arun Jaitley has chosen to see the brighter side of demonetisation because his government’s treasury has benefited with the increase in direct and indirect tax collection. For the common people and specially for the economically weaker sections like daily workers and sectors that depend on cash transactions, the situation has been painful and it continues to be so as the 50-days that Prime Minister Narendra Modi has asked for to bring the situation to normal, expires today. Labourers in textile hubs like Tiruppur have lost their jobs and returned to their villages as the owners don’t have the cash to pay them. This is the same story in agriculture where farmers have seen the price of their produce drop as traders don’t have the cash to pay them. GDP growth is expected to see a dip of nearly two per cent. The IIP for November was down. Mr Jaitley seems a little removed from the ground reality. The situation may not be as distressful as it was soon after November 8 but the fact that cash is still not available as it was pre-November 8 is a reality. The RBI is expected to meet the shortfall in currency only in a few months even as the workers at its printing presses have refused to work in three shifts, according to reports.
It is difficult to fathom what Mr Jaitley means when he says that RBI has plenty of cash so there should be no shortage. It is one thing for the finance minister to say that this short-term pain is for long-term gains. But behind this “pain” are human beings who are going through rough times, being unable to get hold of their own hard earned money. No one doubts the good that will come and has already come for the government at least, from demonetisation. It is supposed to have given a boost to the digital revolution and hit at holders of unaccounted money, thereby curbing corruption. This is doubtful as bribe takers are demanding bribes in diamond and gold.
