[Op Ed] India’s New Money Policy Hurts Poor the Most
By Rev. Dr. Joseph D’souza for Christian Post
On the day the U.S. elected Donald Trump as president, Prime Minister Modi of India announced a sudden midnight decision to demonetize 86 percent of India’s cash economy. His intention was to attack India’s “black” economy — fueled by unaccounted for cash or “black money” — by forcing those who participate in illegal activities like tax evasion to disclose their finances.
While most Indians, including myself, support this idea, the experience of the last two weeks is proving the adage that the way to hell — or in our case, an economic hell — is paved with good intentions.
With the surprise banning of the 500 and 1,000 rupees notes, Indians were forced to scramble to banks and ATMs to exchange their bills for new currency, but the Reserve Bank, in an attempt to prevent tipping off possible culprits, did not print enough of the new notes for the market.
People would end up waiting for hours in long queues only to make it to the front of the line to find out the bank or the ATM had already run out of notes. Although there are an estimated 200,000 ATMs in India, the vast majority are yet to be calibrated to the new notes. One man even visited 23 ATMs in his quest to find money.
Adding to the ridiculousness of the situation is the government’s indecisiveness. At first, Indians were only allowed to exchange old notes up to Rs. 4,000, then this changed to 4,500 and then to 2,000.
All of these combined factors have thrown the country into a spin: small businesses and the rural economy are collapsing; the transportation industry is at a standstill as most payments are made by check; and people are not able to access health care as very few want to go to the inefficient government hospitals or are unable to get the sick admitted into corporate hospitals who do not accept the old cash.
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