Why Fight a Losing Battle?

Image Source: Jigyasa IAS

We seem to be fighting a losing battle against black money. There is note bandi on the common men. The bold and the powerful among us do not seem to be affected by the cash scarcity. We can see how huge quantities of cash, all in the new denomination find its way in the hands of a few elite while we have to queue up to lay our hands on the official rationing of our own money. The IT raids are only pointing out that the ‘pink’ has now become the new black.Goa is no exception to this new unearthing of black in the form of new pink currency. Does this mean that the much hyped demonetisation policy has pushed our society into a new mode of corruption? Does this mean that some of us have come to enjoy our new slide into moral darkness? This means are we slipping into an ordinary attachment to this new forbidden fruit in our society?

The prohibition of the notes of higher denomination by our Government might have triggered a strong desire to enjoy the forbidden fruit. It might be akin to the enjoyment that one gets by doing that which is tabooed in our society. Maybe it is plain and simple.We do not have the moral acumen to live by high moral ideals that the Government is forcing on us. The Government seems to have already sensed that it is losing its most prized battle and has already shifted the goal post and moved the narrative of surgical strike on black money towards the discourse on cashless economy. The triumphant trumpeting of the war on black money has shut down and now we can trace a repositioning of the very basis of demonetisation policy. But the harm is already done.

From the very beginning, demonetisation was no solution to the black economy. It could only temporarily stop some dubious transactions but could never plug the source of black money. Now that ‘pink’ is emerging as the new black all around the country, it suggests that a so -called war on black money missed its mark from the very onset. What it has truly become is a war on cash. The withdrawal of 86% of our cash has lent a telling blow on the cash dependent rural economy. The poor among us are the worst hit. Ironically the war on black money is quickly becoming a war on the poor. While the bold and the powerful are finding new ways of accumulating new black in the form of ‘pink’, it is the poor who are struggling with the economics of their daily life.

Image Source: IndiaTV News

We have already shifted from commodity money (Coins) to representative money (paper currency and gold in the RBI).With time, we moved further away from the representative money to fiat money (promissory note of the Government). Hence, it is opined that going cashless is the next smart thing. But the reigning digital divide and lack of infrastructure all across the country makes this proposal appear highly impractical and would push our economy further down the slippery slope of economic slowdown. We also saw a careless attempt to push Goa into a cashless state. What would happen to the tourism industry in such a scenario? Why burn coal on our head?

It seems that the Government has put an egg on its face. Cash economy has its benefits and vulnerabilities. So the digital economy has its strengths and weaknesses. Direct cash transactions come free. We do not have to pay service charges for our cash transactions. Digital economy does not come free. We will have to pay service charges and net surcharges and a few more tariffs. Besides, there are security problems and discomforts of digital infrastructure inherent to the digital economy. Why pay when we can use cash for free? It is only idiots who do not know who stands to benefit from the smart cash economy.

The smart economy is made for the idiot in us. Someone has circulated a simple calculation in social media. It invites us to do a thought experiment.Rs 100 notes when circulated in cash 100,000 times will have the same value. But when the same happens in a digital environment things change. The service providers charge their fees. If the digital service providers collect 2.5% as commission, the digital circulation of Rs 100 over 100,000 will produce Rs two lakhs, fifty thousand as service tariff.This calculation is enough to manifest who stands to gain from this push to a cashless economy.It seems to be a huge deception on us. It might be smart to refuse to migrate into the e-wallet at least for now.

The demonetisation has put us into a less cash condition. Afflicted by it, we might turn to the e-economy. The cashless economy is a war on all middleman services and structures. It will eliminate all flesh and blood middle men. All mediatory services will migrate online and will produce what we have come to call jobless growth. Once again it becomes a blow to human institutions of mediation and relationship that have been nurtured by our people for centuries. E-economy will move money safely to their prescribed destinations. Both the Government and the service providers will get their share of tax and tariff. But we remain still vulnerable to deception and theft. E-security as well as network services are still important issues. Migration into a cashless economy cannot fully insulate us from e-security issues and we will have to pay to enjoy it. That is, even with all its benefits we still are vulnerable.

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GREETINGS

Hypocrisy is the tribute that vice pays to virtue.

- Fr Victor Ferrao