Necessary preparation before demonetization?

The whole country is standing at an inflection point of development. One path leads to the corruption free promising India while other may trigger a nightmarish experience of national collapse. A glimpse of the initial chaos can be seen outside banks and ATMs but the real pinch will be felt when the demonetization will lead to job loss and a decline in industrial production. Many expert analysts have predicted short-term threats to our social economic and political life. But very few people have commented on the timeliness of the decision. Was this the best time for this move in terms of preparedness? Could we have made some arrangements? Is secrecy not given a paramount importance which has led to this situation? Was this jerking off of whole nation from the black money hangover the only way to execute this plan? Is this the economics which drove the politics of the move or vice-versa?

In my opinion, following ten things could have been done before taking this initiative.
1. Hire at least 10000 IRS officer on contract basis to conduct the tax collection drive in the entire country. There are lakhs of UPSC aspirants who are qualified enough but falls on the other side of luck. The government could have absorbed them through the existing scheme of the examination on a 10-year contractual period.
2. Land records digitization should have been expedited and connected with the Adhar accounts. The technological prowess of overlaying techniques should have been used.
3. The mobile van model of ATM should have been tried and tested and popularized in the whole country.
4. The government could have waited few more years. The GST bill was on the anvil. This is expected to bring down taxation rates. This would have increased the taxation compliance for the large segment of population by itself.
5. The RBI should have increased the prevalence of lower denomination currency. At least the figure of 86% prevalence of rs. 500/1000 could have been brought down to 65% without getting attention in the public in a gradual manner over one to two years.
6. The report of Ratan P Watal commission on the spread of card payment was pending. The government could have waited and implemented its implementation first before shaking the whole nation.
7. The original scheme of Jan Dhan account should have been fully implemented. By this the country would have been prepared to switch to banking system. Today those accounts are conveniently used by rich people for conversion of black money to white money.
8. At least all the government offices, services and amenities should have started accepting the card payment and online payments. This would have reduced the corruption to large extent.
9. Jewellers, real estate people, mining barons and politicians account could have been scrutinized and audited by the additional force of 10000 in a detailed manner.
10. Political parties funding, NGO funding and religious organizations funding could have been brought under RTI rule.

Overall, I feel the step was premature. It was taken in haste, without proper political and economic accounting. Modi is a seasoned player of politics so it is hard to believe that how could he make such mistake or take such a polarizing and risky decision. Black money is substituted by the dark thoughts about the future of the country.

I invite you all to comment, suggest and share the views on the above-mentioned thoughts. more  

View all 88 comments Below 88 comments
The demonetization move is good. But instead of printing the notes of Rs. 2000/ , there should be sufficient Rs.100 and 50 rupee notes. Any purchase of Gold, silver, property , flat, cars there should be PAN No. Swiss Bank transactions must be stopped! more  
There might have been discomfort and inconvenience to many, but I think the people by and large with some % exceptions have appreciated demonetisation. Demonetisation necessarily has to be sudden and cannot be announced publicly with advance notice to all. Post demonetisation, implementation could have been certainly better but let us appreciate this Government who has the guts and courage to take this such a call. more  
All these suggestions could be still implemented more  
There was enough time given, and the Govt was repeatedly requesting citizens to open bank accounts by depositing just one rupee. It also kept stressing on linking the aadhar card with the accounts. Any further preparations would have leaked out the Govt's plan and the whole exercise of demonetization could have flopped. What Modi did is right and rightly timed. We should openly support him. more  
Complete secrecy and suddenness are important for the success of such schemes. There was enough preparedness like opening of bank accounts for common people (like street vendors, petty shop keepers etc.), constant pushing for Kisan Credit Cards, training on use of bank debit cards, voluntary income disclosure scheme, digital money transfer under Digital India, and making PAN must for buying gold and jewelries to name a few. In a country, where corruption is deep-rooted and spread like gangrene in all institutions like judiciary, bureaucracy, police, media (both TV and print), academics, etc. it is but natural that powerful people will voice their opposition. The benefited section is voiceless commoners. I believe, the scheme would achieve partial but well deserved success. Only regret is that BJP-organization could not mobilize masses in the manner JP and Anna Hazare movements did. Had BJP taken initiative, people would have come on streets spontaneously. more  
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