Let’s Support the Government
This is regarding the ban of Rs.500 and Rs.1000 notes by the Central Government.
I had a chat with a person on Facebook where the person was saying that people are suffering because of this decision. I was taking the side that these issues are temporary and we ought to support the government.
I told that we ought to educate the people (Particularly the people from the lower strata of the society about financial inclusion and importance of getting into the banking system).
The other person shot back saying that the government is not caring about farmer suicides and it is the governments responsibility to educate the poor on banking. In a way I felt that the comments meant that the government was abdicating the responsibility. One of the comments that the person said was that people tend to be more patriotic when they are not directly affected directly. In a fit of rage I wrote the following stuff in the comments section.
I am not saying that there are no troubles. There is trouble everywhere around us.
People are feeling pain, my position here is that this pain is temporary and we will come out of it.
In a way, some of the people comment that people tend to be more patriotic when they are not affected. I have serious reservations on this point. I know a lot of people who take the pain for the common good. While I might not be at their level, I too am doing my littleto help my countrymen.
The Poor and the Banking System
Coming to the point on educating the poor and getting them in to the banking system. The government did not abdicate its responsibilities.
Look at this , we have Jandhan Accounts opened two years ago. The government instructed the banks to open accounts with Zero balance for the poor and the needy.
The country saw close to 30 Crore people getting to banking system using Jandhan.
Then the government asked the people to add their Aaadhar and Mobile Numbers to this. This was done and called the famous JAM initiative of the government. Then they gave RUPAY cards to all of them.
Then they started paying MNREGA money to the poor (These are daily wages paid to the laborers in rural areas) using these accounts. While each person might not be using these, there are a substantial amount of people who used these cards.
So the government has been making it simple and asking people to use the banking system.
The women self-help groups like DWCRA etc now deal totally with banks and their transactions. The government has been trying its best for financial inclusion and inclusion into banking systems at all levels.
When the government needed more penetration and banks were finding tough to open more and more branches, the government transformed post offices into banks. Today, even post offices are operating like banks and offering finance services.
Yes, in spite of all these people wanted to deal in cash and they are dealing in cash because it is easy for them. Now, this move is another push that should motivate them to get into the banking system.
In my last comment when I said that we ought to educate the people around us, I meant to say that we should do our bit to aid the government in its initiative.
Farmers and the Governments.
You made another remark regarding the deaths of farmers and no one caring about it. Again I have my reservations here.
The governments of Andhra Pradesh and Telangana have come to power promising the crop loan waiver. These governments are actually implementing that and are bearing close to 60,000 Crore rupees from their exchequer.
Sorry for digressing and bringing in State government, but when you look at it even the center is hell bent changing the lives of the farmers and the people In rural areas.
In fact, the last budget was called a rural and Agriculture pro budget by most of the finance experts in the country.
1. Allocation for Agriculture and Farmers’ welfare is ` 35,984 crore
2. To reduce the burden of loan repayment on farmers, a provision of ` 15,000 crores has been made in the BE 2016-17 towards interest subvention
3. Pradhan Mantri Krishi Sinchai Yojana’ to be implemented in mission mode. 28.5 lakh hectares will be brought under irrigation.
4. Implementation of 89 irrigation projects under AIBP, which are languishing for a long time, will be fast-tracked
5. A dedicated Long Term Irrigation Fund will be created in NABARD with an initial corpus of about ` 20,000 crore
6. Programme for sustainable management of ground water resources with an estimated cost of ` 6,000 crore will be implemented through multilateral funding
7. 5 lakh farm ponds and dug wells in rain fed areas and 10 lakh compost pits for production of organic manure will be taken up under MGNREGA
8. Soil Health Card scheme will cover all 14 crore farm holdings by March
9. Unified Agricultural Marketing ePlatform to provide a common e- market platform for wholesale markets.
10. ` 2.87 lakh crore will be given as Grant in Aid to Gram Panchayats and Municipalities as per the recommendations of the 14th Finance Commission
You can get more details on these sectors from http://indiabudget.nic.in/ub2016-17/bh/bh1.pdf
These are the points on which I want to refute the claim that governments are anti-poor.
Friends, the change is happening, the trouble, some people want the poor and the needy to be kept out of this. They have their own vested interests to be taken care of, hence they would encourage the cash economy which is detrimental to the common man.
Troubles due to Demonetization.
Having said that, I completely understand the side of the argument that people are having trouble. I only want to say that this could not have been averted. We want to abolish the notes that are bringing in black money, some people are having hoards of cash stacked in their houses.
If I want to tackle them legally, we have great lawyers who get them out (Case in Point : Ram Jethmalani defended Y.S. Jaganmohan Reddy in the court)
Today even with a sudden shock, people are able to find ways to save their black money . (Case in Point : People are giving 2.5 lakh rupees to the poor and are asking them to convert and pay them back 2 lakhs in white.)
Just imagine as to what would have happened if they knew about this a week or month before. So it had to happen that way.
Let us see the way the government is handling this.
1. The old notes can be used in petrol bunks, to pay taxes, repay loans and to buy bus and train tickets until 18th November 2016. I think you can use them until 24th November in some places.
2. They have removed the toll so that people don’t run into cash problems there.
3. They increased the withdrawal limit from 10K to 24K per week now.
4. In case there is a marriage one can file an affidavit to get 5 Lakh rupees for the expenses.
5. They have introduced mobile ATMs to go to the people and serve. (These indeed are limited in number)
6. Today, they have announced that traders can show their trade license and withdraw up to Rs. 50,000/-
7. They are allowing women (household woman ) to open their own accounts to put savings up to 2.5 Lakhs, again no questions asked and no proofs needed.
8. They made the banks work full time even on the weekends to get the exchange done.
What should the Government Do ?
However, this does not mean that the government has got nothing to do.
1. They must actually step up the use of mobile and micro ATMs to get the cash to the hands of people.
2. They must have counters for exchange of notes and counters with card machines in Rythu bazaars and ration shops so that the common man gets his rations without much of trouble.
3. The dairies must ensure that they would provide milk even with the older notes. Milk is an essential commodity that must reach the kids.
4. Then the recalibration of the ATMs must be done in the next two weeks. Else, people will still be after banks to get their money exchanged.
5. Encourage all merchants including small merchants to get into the online business. Cut down the taxes on the transactions that are done in plastic money.
These are few things that came to my mind. Let’s come up with more suggestions and do our bit in fighting this out. Well, we can always criticize but then giving better ideas would of more help.