It is true that the demonetisation of ₹500 and ₹1,000 created hardship for people across the country for a variety of reasons. However, by citing these hardships, an attempt has been made in various quarters to project this move as anti-people. There are at least four broad arguments made in this regard, which can be disputed.

Banking as a habit

The first point made by those who cite the hardship argument to discredit the demonetisation exercise altogether is that most of our population does not have bank accounts or ATM cards.

However, for exchanging old notes for new currencies for immediate use, a bank account is not required. An amount of ₹4,000 can be withdrawn by any individual even without a bank account, by exchanging the sum for old currency. If there are three adults in a family, they can together withdraw up to ₹12,000 without a bank account.

However, to convert additional invalid notes, one needs to have a bank account to deposit the old currency and then withdraw as stipulated by the government.

Under the Jan Dhan Yojana introduced in 2014, 25.45 crore accounts have been opened with bank deposits of ₹45302 crore between 2014 and 2016, averaging about ₹1780 in each account. It is true that about 30 per cent of the accounts have zero balance.

That does not mean people cannot operate the account. To avoid accounts moving towards inactive mode, bank employees themselves had put ₹1/- in most such inactive accounts.

All the Jan Dhan Yojaan account holders were given RuPay debit card to withdraw money from ATMs and to pay through debit cards in stores which accept debit cards for payment in India at a minimal processing fee compared to regular debit cards. India has about 66.1 crore debit cards out of which 25.45 crore cards are RuPay cards.

The distribution of debit cards is not lopsided towards upper, middle and lower middle class, thanks to Jan Dhan Yojana.

The actual usage of Jan Dhan Yojana accounts and RuPay debit cards would have never been as much as regular debit cards. Once the government provides the infrastructure, it becomes the responsibility of the people to adopt the new facility and use it effectively. The demonetisation move would force people to consider using their Jan Dhan Yojana accounts and RuPay debit cards more actively.

Rampant tax evasion

The second point cited by the hardship camp is people being stranded without cash for a day or two. Since a large part of the day-to-day business is often conducted in cash across crores of mom-and-pop stores and trading shops, activity here came to a standstill.

But given the element of surprise so necessary for demonetisation, this sort of hardship for a week or fortnight could not have been completely avoided.

The third point being raised is whether it is a sin to earn and spend in cash rather than go for cashless transactions. Certainly not.As long as people pay tax on their income, there is no need to panic. Invariably, transactions are made in cash to avoid the the radar of tax department.

In 1960s and 1970s, the income tax rate for the higher slab was as high as 95 per cent and thereafter reduced to 30 per cent in 1997. After 1997, there cannot be any justification for hiding income and evading tax.

The fourth objection is subjecting the entire population to this dose of heavy ‘chemotherapy’. Believing that only few rich people hoard all the black money is easy for the others to claim that they are holier than thou. Not just the rich, but also the upper middle class and even middle class evade tax wherever there is scope to do so.

The news reports clearly suggest that the black money is not confined to either few tens or even few thousands of people. To take a few examples 2,000 1AC rail tickets are sold every day, but after demonetisation, the ticket sales increased to 27,000, many of them paid for by invalid currency notes.

It is well known that those who travel by 1AC are elite and book their tickets online. Why this sudden surge for booking tickets in cash? There are many instances of people who sold their property in the last six months and got portion of the price in cash, and are now at a loss over how to handle the sudden demonetisation.

All these clearly indicates that the cancerous cells are not just confined to one organ or small part of the body.

Another criticism is that the common man waiting in queue to convert his hard earned money even as those who have unaccounted money don’t turn up. People who have unaccounted money are devastated now and working overtime to convert their unaccounted money, which includes some staunch supporters of Prime Minister Narendra Modi.

The sudden unpopularity of Narendra Modi on Twitter immediately after he announced the demonetisation plan is testimony to this.

The message of the Prime Minister to the people of India is clear: When you expect an honest government with no corruption and malpractices, you also have to be honest. Honesty is not a one way road.

The writer teaches at TAPMI Manipal. The views are personal

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