Rajahmundry, Nov 23: Leader of Opposition in Andhra Pradesh Assembly YS Jagan Mohan Reddy has said the good intentions of demonetisation has backfired due to lack of preparedness and faulty implementation mechanism and demanded that decision should be postponed till corrective measures are taken as the people are facing severe hardship in wake of the pull-out of higher denomination notes in our characteristic cash economy.
‘Though the intentions of the Centre are genuine in nature a major decision of this magnitude should have been taken after giving a serious thought of the pros and cons instead of focusing on the element of surprise or blitzkrieg which is very badly affecting the people and their livelihood,’ he told reporters here on Wednesday.
Chandrababu Naidu, who claimed that it was he who had advised the Prime Minister Narender Modi on the drastic move by writing a letter in early October itself has now changed tune and has been speaking of restlessness though, it was very evident that he had prior knowledge of the move and had dusted thing clear in his house besides selling away the shares of his family-owned Heritage Foods in bulk, days before the announcement of demonetisation.
We are all in support of the decision to weed out unaccounted money but as there has been bungling and lack of preparedness in the implementation part, we demand that the decision be put off by some more days until everything falls in place and the government can brace up to the situation as our country is basically a cash economy where 90 % of transactions take place in cash. Rural areas are not equipped with banks and the people there are not well versed with the banking operations.
Even if all the Government printing press and mints work in full steam, it takes nearly three months to replace the existing higher denomination notes as 86 % of the transactions are carried out by these notes. In the earlier bout of demonetisation in 1970s, the higher denomination notes comprised just 0.6 % of the money in circulation. The veiled threat that all money deposited above Rs 2.5 lakh will come under IT radar too is sending wrong signals as the very nature of our economy is cash based. Many rural areas lack banking facilities and people are not well versed with the banking system. There are just 50, 421 banks in rural areas and 92% of villages do not have banks.
When such a mammoth exercise is taken up, the Government should have done enough homework and worked out the implementation methodology. The present crisis shows that the Government was found wanting on this count. To undo the damage, the Government should postpone the decision till such a date until corrective measures fall in place, he said.
The best laid plans and best practices backfire when the implementation is not done properly and this phenomenon was proved in the erstwhile USSR with Mikhail Gorbachev trying to bring in economic and political reforms through perestroika and glasnost and Soviet Union had disintegrated when it failed in preparedness, he said.
Prime Minister’s statement that the move was aimed at curbing unaccounted money coming through drug trafficking, terrorist activity and money laundering is welcome, but the plans went awry as it was not implemented properly, he said.
The Jan Dhan Yojana scheme too has only bank accounts and when it comes to credit cards only 50 lakh people hold the 2 crore credit cards each having multiple cards. Push cart vendors, fish markets and other such small and petty traders cannot be having the swiping machines and it takes time to prepare the country for converting it from the cash economy to a cashless one, he said.
Small and marginal farmers besides tenant farmers and a cross section of people are undergoing severe hardships and the Centre should postpone the decision as no proper measures were taken to handle the situation. As the money would be in the system itself, it can be pulled out conveniently after due replacement falls in place, he said.
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