Kudos to Prime Minister Narendra Modi for demonetisation and promoting cheque payments and cashless payments to stamp out black money
3/2/2017 3:32:56 PM
|written By : Ashali Varma|
We came back after a 20-year stint abroad to India and the first thing one heard was how much by cheque and how much in cash. ‘What does that mean?’ we asked. Selling a property meant getting some cash and the rest by cheque. We demanded and got everything in white by our builder and that meant a cheque.
After buying and selling properties in America, the very notion that one would have to get or pay cash was unnerving and really disturbing. Where do you keep cash and why? Would you not prefer it to be in banks to collect interest or even in the market? But then we did not know the India we had come back to. I had worked for the United Nations in New York and heard economists speak about how bad the informal sector was because it kept the poor really poor. They would not have access to banking, or licences to start a business. They would pay and keep paying to various authorities like the local police or politician just to keep their businesses going. They would get no pension, no health coverage, nothing to show for their years of striving. Then I saw in all my travels abroad that in most developing countries the informal sector was bigger than the formal educated sector. This kept the people in Africa and South Asia, South America and the Middle East forever reliant on handouts when they were old and poor.
In 70 years our informal sector in India had only grown. It was not only debilitating for our poor but was making a few landed farmers very rich. A whole lot of upwardly mobile citizens, who made several lakhs a month, falsely declared their income was below Rs 2 lakh a year. Thus the rich got richer and the poor kept striving till PM Narasimha Rao opened up India’s economy. This helped create jobs in the formal sector but we still had businessmen who had learnt to beat the system and the black economy in India literally went wild. Even tony retailers in Khan Market refused to give me a bill for what I bought and said they would only sell for cash. We would have to go to an ATM and get cash to give to them. I felt cheated and harassed and wrote about how they were evading taxes. But then I learnt that they were wary of paying taxes as they got no benefits. They would still have to bribe everyone everywhere to get anything done.