The demonetisation has caused more than the expected quantum of misery to a large section of the Indian population. From the so-called senior citizens to the youths, nobody has been spared from the tortuous experience of using or not being able to use one’s hard-earned money. Deaths have taken place in the queues and the number was at seventy on Sunday. Food has become a problem on account of the non-availability of permissible currency. The dhabawalla, the pan shopwalla and the kirana shopkeeper, etc., are not expected to accept plastic money. Wages in a large sector are disbursed in cash and any other form is impracticable and inconvenient. The small vendor and even small shopkeepers have a drastic fall in business on account of a forced austerity.
By an executive fiat, notes of the denominations of Rs 1000 and Rs 500 were declared illegal tenders whereas they had inscribed on them a solemn promise of the Governor of the Reserve Bank to pay the requisite amount as a matter of trust. Whether the executive fiat could have been used in the manner in which it has been, even in exercise of any subordinate delegation, is a separate legal issue to be independently examined. But given the unhindered roughshod implementation, a more intrusive study of the unusual feature of about 86.4 per cent of the currency in circulation (being of the denominations of rupees 1000 and 500) being rendered illegal tender is unavoidable. Inflation can provide a marginal cushion. But beyond that, it requires an investigative study as to how this large quantum of currency of high denominations came to be printed and pumped into circulation by the Reserve Bank / Government of India. See the box
This table would indicate that during 2014 to 2016, there is a quantum jump in the printing and pumping in of Rs 500 notes into the system. The percentage of increase is from March 2014/March 2015 (14.7 per cent to 15.7 per cent in quantity terms in the range of 44.4 per cent in value terms. The situation in the case of notes of the denomination of Rs 1000 reveals interesting features. The quantum jump from 6 per cent to 7 per cent in quantity terms in 2014-16 to a galloping figure of about 39.6 per cent in value terms. If one compares this picture with the printing and pumping in of notes of the denomination of Rs 100, more than interesting features would be manifesting themselves. During 2014 to 2016, the notes of denomination of Rs 100 did not increase like those of denominations of Rs 500 and Rs 1000. This percentage increase is substantially below the high percentage increase of notes of denominations of Rs 500 and Rs 1000. The volume in crores of pieces of Rs 500 notes put into circulation increased from 1,141 crore pieces in March 2014 to 1,571 crore pieces in March 2016. This pushed up the percentage of such notes from 14.7 to 17.4. In the case of Rs 1000 notes, the volume in crore pieces was 508 in March 2014 and increased to 633 in March 2016. In value terms of rupees lakh crore, accordingly indicated an upward increase, pushing a total to a figure of Rs 500 notes from 17.4 in March 2014 to 47.8 in March 2016. In the case of Rs 1000 notes, in terms of percentage share, the number of crores of pieces increased from 6.6 per cent in March 2014 to 7 per cent in March 2016. In value terms of lakh crores, the percentage of Rs 1000 notes stood at 38.5 per cent in March 2016. The total number of share of such currencies of Rs 500 and Rs 1000 stood at 86.4 per cent in value of lakh crore in March 2016 whereas it was 24.4 per cent in March 2016 in volume terms of crore pieces.
Obviously, as a matter of policy, it was decided by the Reserve Bank to print the high denominations and more or less freeze the situation regarding denominations of Rs 100 and below. This is a baffling feature that as a measure of policy, high-denomination notes are printed and put into circulation and the cause thereof would reveal many untold stories. There is a hidden cause providing incentive to making notes of higher denominations more easily available to the general public. Both in the case of notes of the denomination of Rs 500 and Rs 1000, the increase is unusual in terms of day-to-day requirements. In the case of notes of denomination of Rs 500 and Rs 1000, the supply has been aggressive and stimulating to such a demand in almost in a mechanical manner does not indicate adequate precautionary study and the causative analysis of the reasons behind such a demand-supply situation. It almost looks as though a facilitator is now finding fault with what it facilitated and fed to grow without demur. If one tries to analyse any dominant reason for a policy oriented towards increasing the availability of highest-value notes, one cannot justify the action by any easy means.
The unplanned measure having been implemented, its adverse impact on the economy in general and the individual or groups of individuals in particular has been very harassing, depriving and demeaning. A huge operation was to take in terms of transactions and cash economy being a substantial section for economic activity, the theoretically-designed measures and facilities were irksome, inadequate and choking. The conditions of senior citizens were pitiable. Pensioners had to undergo avoidable torture in having access to the bare existence. Many had to forgo meals, and nutritional level definitely had an adverse trend during the last 12 days or so.
All this was avoidable if reasonable flexibility was provided through adequate preparatory measures. The agro and cooperative sectors were totally ignored and made inoperative leading States like Odisha complaining of the cash crunch in a vast chunk of the economy. Currency has not reached post offices, banks or ATMs. This is not a situation of financial emergency. By an executive fiat, the Constitutional right to property and livelihood cannot be trampled over in this manner by the so-called “surgical strikes” and illegal intrusion into the right to property making persons literally beg for their bare existence. The emergency situation largely remained uncared for. Trade, transport and other cash-based activities have suffered a great deal. It is time the Government provided more free play at the joints so that normalcy is restored and the torture is not perpetrated.
In this hour of man-made crisis, the youths have to learn their own lesson. Their small savings and their wages turned into scrap of paper by the stroke of a pen. There is no legislation holding the field, but the change, however, has been permitted in an unthinking, unsystematic, insensitive and uneconomic manner. It is for the youths to formulate their opinion about the lack of rural credit facility for weeks together during a crucial agricultural operational season.
The upper middleclass downwards, up to the poor, all have been maulled by the illegal brutality. The “rich” will have no less problems because they have the resources to command their experts to manage their affairs. They do not need Rs 2,000 and Rs 4,000 for survival for a day and, that too, in cash. There is an infrastructure looking after them. let the vast majority, who are bonafide and honest, not be the victims due to the professed “surgical strikes” allegedly aimed at the over-opulent. But this storm should wake up all of us and involve us in a movement to bring economic sanity with adequate protection to individual dignity, an inviolable right. And, surely this concerns us all!
(The writer, a Senior Advocate, is a former All India Service officer, a former diplomat, a former editor, a former President of Orissa High Court Bar Association and a former Advocate General of Odisha. jayantdas@hotmail.com)