A year on, NRIs debate effects of note ban
Perhaps the Modi-Jaitley combine has another card up its sleeve
This day a year ago India's financial base was hit by a tsunami as the Rs 500 and Rs1000 currency notes went into oblivion. The next three months were devastatingly difficult and the unilateral decision divided the country into for and against like no other issue ever had.
A year down the road the divide still exists and on the first anniversary both the supporters and those cynically hostile to the Narendra Modi initiative are far more vocal about their stances. NRIs who often feel they got the short end of the stick and were among the last to be given attention also vary in their opinions.
Revealing figures earlier this year indicated that of Rs15.44 trillion circulating in the country in those banished denominations as high as 99 per cent had been rounded up by the Reserve Bank of India. The logical corollary to this is that those who were hoarding black money were largely able to get rid of their ill-gotten wealth through conduits that had been overlooked in the hasty implementation and duck the taxman's net, thereby making the exercise onerous and pointless in achieving its aim of bringing the corrupt to book.
As media gears in India to take sides on Wednesday and social platforms sizzle with vitriol and shrill support non-resident Indians (NRIs) also staked a claim on both sides of the fence because what happens back home does directly concern them. Surender Singh, Chairman of Al Dobowi Tyres was unequivocal in his defence of the move. "It is the best thing that happened to India in fiscal terms. It made us truly appreciate the value of government and our responsibility as citizens. We all have a debt to society and we have to pay it and the only ones who are protesting or mocking the move are the ones who were reneging on their civic duty."
Herman Lewis who runs the popular Radio Spice FM station feels that there are both negative and positive elements in the action. He believes the process is still not complete and while corruption has been contained the arts and the creative process has been badly hurt, people are confused, there is a cash crunch still but the voices from the creative arts fail to echo in the corridors of power.
Rajesh Pareek, Grup CEO at Musafir.com would not render an inch to the doubters. "It is the greatest fiscal move ever as far as India is concerned. It has worked and it has had a direct and forceful impact on the corrupt practices. I feel things are much cleaner now."
Dr Atul Kumar, a longtime medical practitioner in Dubai echoes the sentiment. "Of course, it has worked,' he says vehemently, "Only the unscrupulous are unhappy, the salaried folks are all delighted with the process and you have to break eggs to make an omelette. This was a bold move and a necessary one. Tax evasion has reduced dramatically."
A colleague, Dr Vijay George, is less generous in his assessment. "It is probably well meant," he says, "But it is causing a fair amount of hassles like I cannot sell my property, the hassle factor has increased, even when you are being honest, there is impediment."
Well known business leader Ram Buxani has a markedly unique take. He says the intentions might have been upfront and good but it hasn't panned out the way it should have and had the desired effect becoming more of an inconvenience. In a direct revelation he said that money exchange houses keep a great deal of cash in Indian denominations. A year later it has still not been collected. According to Buxani, Indian currency abroad in exchange houses would run into billions and for no fault of anyone is lost to the legitimate possessors and the exchequer. The fact is that petitions to New Delhi have been ignored and there is no response from there."
Buxani says his company probably has a sizeable sum they want to return because you cannot carry the money to India or send it with an emissary since it would be illegal to cross Rs25,000 and here we are talking hundreds of thousands.
Across the world this would be a huge sum and it seems odd the government is not concerned about collecting it.
Backing for the move comes fulsomely from highly respected businessman Khushi Khatwani who firmly believes it has streamlined the economy and is one of the few positives of the past three years. "We needed this surgery," he says, "It has been worthwhile."
Health and beauty consultant Rima Soni agrees and adds that it is never too late to be corrected and we needed this correction." She says the cynics can enjoy revelling in their negativity, the fact is India is a better place for it.
Novelist Asha Bhatia is openly in favour of the efforts made by the Modi government. "At least we don't have to pay under the table and deal with corrupt officials demanding money to do their jobs.' She was recently a recipient of a certificate of merit from the government for being a regular tax payer.
While NRIs largely feel that the bribe factor has reduced back home the RBI disclosures have caused embarrassment to the administration because if all the notes are accounted for then the black economy got away and only the common man suffered and what was the point of the exercise. The man in the street was delighted that the affluent were getting their comeuppance and this assurance mitigated the inconvenience and the harassment because finally the rich were a target. However, now the reality that rich got away unscathed sinks in and the price line rises exponentially, the fallout from the demonetization effort is turning into sweet grist for the Opposition mills.
Sandil Kumar Muthu, a delivery van driver at a hotel in Dubai puts it bluntly: "Only the poor suffered," he says, "The rich were unaffected. In my village in Tamil Nadu more people than ever before are paying interest on loans they took and these will never finish, we are stuck."
Perhaps the Modi-Jaitley combine has another card up its sleeve. After all 148,000 accounts have deposits that are not in line with the tax profile and go up to $500,000 and that could mean another bout of accountability in the near future.
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