By FINANCIAL CORRESPONDENT

THE expectation that things will get better and that the ordinary citizens would find it easier to change or access his own hard earned money has been belied. On the contrary the causal labour and the maid servant and the driver and the CCP garbage collector will face even more problems. This is consequent on the fact that the limit for exchange of old useless Rs 1000 and Rs 500 notes has been reduced from Rs 4500 to Rs 2000 effective 18th November 2016.

Worse all the little people who want to exchange their small saving of Rs 1000 and Rs 500 note will have to subject themselves to the humiliation of having a black mark put on the finger of their right hand. Which means that they can exchange up to Rs 2000 of the new fading Rs 2000 notes or if they are lucky Rs 100 notes only once. The poor are paying the price for the suspicion that the rich and the crooked are using their drivers and their maids and their employees to convert black money into white.

To address the complaints of brides and grooms and their anxious parent about the shortage of cash for celebrating weddings, Narendra Modi has been generous enough to permit brides and grooms to withdraw Rs 2.5 lakhs for meeting the marriage expenses. It is not known whether they will be able to get the money in Rs 100 notes. The flower vendor will not accept a cheque. He or she may not have change for Rs 2000. The man who rents the horse for the groom will insists on cash payment. The band will also ask for cash. So will the poojari who celebrates the wedding. Then there is question of shagun which is always paid in cash.

If the bride’s family has not bought the gold demanded by the grooms family they may have to use part of the Rs 2.5 lakhs or the entire amount for buying jewellery. The limit for the Aam Adami or the common man for getting married is Rs 2-5 lakhs. But of course if you are close to the BJP, particularly to the External Affairs Minister Sushma Swaraj, you can spend as much as Rs 500 Crores on your daughter’s wedding. Given the ceiling of Rs 24,000 per week on withdrawals even from your own savings account, how did the notorious Reddy brothers of Bellary manage to withdraw Rs 500 Crores for the wedding of one on their daughters in Bangalore.  Incidentally the guests at the wedding included the former BJP Chief Minister of Karnataka Yeddurappa and the present Congress Chief Minister Sadananad Gowda. Sushma Swaraj would have gone but for the fact that she has had a kidney failure.

Individuals cannot exchange more than Rs 2000 of their old devalued currency notes. They cannot withdraw more than Rs 24,000 per week from their own bank accounts. Unless they are farmers who have been permitted to withdraw up to Rs 25,000 for buying seeds and fertilisers for the new agricultural season. Except that most farmers do not have bank accounts and enough money in their accounts to withdraw Rs 25,000. They are finding it difficult to sell their rice, wheat and vegetables as the agents in the wholesale market will not accept cheques or debit cards and will insist on cash payment. To help out the farmers wholesale dealers in the mandis have been allow to withdraw Rs 50,000 to pay the farmers. Pampered government servants of the C category of clerks and peons should be allowed an advance in cash of Rs 10,000.

But no such facility has been extended to the shopkeeper in the cities who need money to buy stocks and pay their employees. No such concession has been extended to builders who hire labour on a daily wage basis and have to be paid  in cash. No such concession has been extended to the tourism industry and tourists who are spending all their time not on duck rides or hot air balloons but queuing up before ATMs to collect money. Indeed the tourist does not have the new currency to pay the taxi or rickshaw driver or to have tea and puri bhaji at Navatara. Not because they may not have the money but because ATMs give you only Rs 1000 in hundred rupee note which do not last long. Tourist may be able to get Rs 2000 notes but no one has change for them.

While the common man which include all the people who voted for the BJP and Narendra Modi continue to be deprived of their fundamental right to withdraw their own savings from the banks, BJP MLA from Rajasthan has claimed that the biggest industrialist of the country from Gujarat, considered to be closed to Narendra Modi had advance information on the demonetisation.  It is even being suggested that the free distribution of 4G sim cards and unlimited downloads till 31st of March are financed out of the black money that Mukesh Ambani had converted since he knew in advance that the Rs 1000 and Rs 500 notes would be scrapped. There are also been reports of the BJP in Uttar Pradesh depositing Crores of rupees in Rs 1000 and Rs 500 notes in the banks just before the November 9th deadline. It has been revealed that some Guajarati papers had published news items over the plans to demonetise the Rs 1000 and Rs 500 notes on April 1st 2016 which most people may have dismissed as an April fool joke.

Everyone in the country irrespective of which political party they belong to are against black money. But the savings of the ordinary citizens, the majority of whom do not have bank accounts is not black money. The money deposited by honest citizens in banks is not black money. The government has no right to put any limit on the cash that you and me can withdraw from our own accounts. While the Prime Minister Narendra Modi and the Finance Minister Arun Jaitly are lashing out at Mamta Banerjee and Arvind Kejriwal for opposing accountability, the fact remains that the income of all political parties including the BJP from donations and other sources have been collected in cash. There is no accountability with regard to over 80% of the Rs  497  Crores of rupees collected by the BJP in the financial year 2014-2015 alone. In Income Tax documents seized from the office of Adiitya Birla there are diary notings of Rs 60 Crores having been paid to Narendra Modi when he was Chief Minister of Gujarat. Similarly there are reports of several hundred Crores donated to Narendra Modi by the Sahara group, whose Chairman Subrata Roy is on bail after spending more than two years in jail for cheating Crores of small investors to the tune of Rs 20,000 Crores.

The bitter ground reality is that the Modi government which carried out a surgical financial strike against its own citizens has lost all its creditability.  The secretary in the finance ministry has been claiming that the fact that the Rs 2000 notes bleed and loose colour when they are wiped with a wet tissue proves they are genuine. Everyone has lost faith in the Chair-women Arundhati Bhattacharya of the State Bank of India who is responsible for making available enough currency notes after the revelation that the Rs 7000 Crores owed to the banks by Vijay Malaya have been written off. Which effectively means that if you are rich and powerful you can get away with bank robbery while the poor and the middle class have to give explanations for withdrawing their own savings. Leading to the charge that all the old currency notes which will swell the coffers of the banks will be used to extend loans to the Ambanis and Adanis who will not have any obligation to pay them back.

I was watching the NDTV coverage of the United States elections on the night of 8th November Tuesday. Suddenly around 7:30 pm there was an announcement that the Prime Minister Narendra Modi would be addressing the Nation. I thought it would be another “Maan Ki Baat”, his frequent homilies on radio. The NDTV had to interrupt its coverage of the US elections to telecast the address of Narendra Modi. The first time Narendra Modi had addressed the nation on National TV other then on Independence Day.

When Narendra Modi started his speech there was no indication of the bomb shell he would drop. In the first 20 minutes Narendra Modi spoke about the fight against terrorism. Even when Narendra Modi claimed that the terrorist attacks on India were financed through counterfeit fiats or fake currency, it did not registered that Narendra Modi was planning to scrap the current Rs 500 and Rs 1000 notes. It was only when Narendra Modi started talking about intensifying the fight against black money that there were some hints that his address was linked to black money. It was only towards the end of his forty minutes speech in Hindi which he summarised in English that he announced the financial surgical strikes of rendering useless and reducing to scraps of paper the Rs 500 and Rs 1000 notes in possession of the ordinary people of the country.

My immediate reaction was that the demonetisation of the high value notes of Rs 500 and Rs 1000 would ensure less use and abuse of money power in the forth-coming elections in Uttar Pradesh and in Goa. During elections the most popular candidate is Gandhi.  Not the Mahatma but the Rs 500 note which carries the image of Gandhi. In fact politicians and those who were beneficiaries of bribes from them alike refer to it as the Gandhi note. Moreover in my experience of over thirty years and more in journalism in Goa, I have been aware that politicians and political parties have always paid for paid news and for advertisements before every election with Gandhi notes. This is partly because all sections of the media including electronic media have always insisted on advance payment from politicians and political parties for political ads. There is no guarantee that the politician will pay if they lose us the election and even if they wins. I have been witness to agents of politicians coming to the Herald office with dirty plastic bags full of Gandhi notes.

Another immediate reaction was the scrapping of Rs 500 and Rs 1000 notes would cripple the flourishing casino Industry. At a casino all transactions are in hard cash. You have to pay in cash for entry into the casinos. You have to pay Gandhi notes for purchasing chips to play the various games at the casinos. If you win you are paid in Gandhi notes. Only the big gamblers are given banker’s cheques but many are reluctant to take them as 30% tax is deducted at source. The big sharks are not affected because there are havala agents who will help them to transfer the black money.

I was happy because on the few occasions I have gone to casinos I had seen not only politicians but even government servants with dirty plastic bags coming to launder money in the casinos. I understand that after the announcement by Narendra Modi all those who were in the off shore casinos in the Mandovi river quickly boarded the boats and fled in the fear that the Income Tax Authority may raid the casinos. In any case there was no point in staying in the casinos as you could not buy chips or collects your winning as Rs 500 and thousands notes have lost their value. But they have found a way out and casino ads have resumed.

It is only the next morning that the nightmare began. Between me and by better three quarters, we keep about Rs 10,000 cash at home as we are both senior citizens and we may need it in an emergency. Particularly if there is a medical emergency as private hospitals do not accept cheques or even credit cards. We discovered that all the money we had was in the form of Rs 1000 and Rs 500 notes. Notes which had not been given to us bribes but issued by our banks against our cheques and which we had withdrawn for our day to day needs. The immediate thought was that we would go to the bank and convert our now useless Gandhi notes into Rs 100 notes. It was then that we remembered that the banks were closed on the 9th of November the day after the financial strike.   

We had a piggy bank in which we used to deposit coins that we received. The wife managed to find enough coins worth of couple of Rs 100 to buy milk and bread and eggs. But when she tried to buy some provisions with the old Rs 500 note she was told that they were no longer legal currency. Fortunately the shopkeeper very generously offered to give her goods on credit till she managed to exchange the money. I also discovered that the money we had withdrawn from OBC Bank which is a public sector bank for petty cash to buy stamps and envelopes were also in Rs 2000 and the old Rs 1000 notes.

On Thursday when the banks reopened, my colleague deposited all the Rs 500 and Rs 1000 notes that the bank had given usjust two days earlier. He also presented the cheque for withdrawing money as this was easier than exchanging the useless notes for the new notes. The bank was happy to accept the old notes but in exchange insisted on giving us the new Rs 2000 notes. Which look like lottery tickets! And was useless as no one would accept them as nobody had change in the form of Rs 100 notes to return for purchases made. Desperate colleagues who are more technology savvy tried their ATM cards only to find that the ATM machines were only dispensing Rs 2000 notes. Apparently no body had stocked the ATMs with the Rs 100 notes which everyone needed.

Even on Saturday there had not been any significant improvement in the situation. Poor Tulsi could not get married in the style she is accustomed to as there was no money for gardens or flowers or sweets. The vendors wanted Rs 100 notes and refused to accept Rs 2000 notes. It was a problem even paying the bhatjis as no one had the Rs 200 or Rs 300 which is their normal fees. Some bhatjis got lucky and got Rs 2000 notes instead. They could not be paid later as during Ganesh and Tulsi the demand for priests is so high that they are imported from outside the state.

It is clear that Modi had not planned for the trouble his fight against black money would cause. The bitter truth is that contrary to the claim of the finance Minister less than 40% of the population have bank accounts. Less than 20% or even 10% of the population have even debit cards forget about credit cards. Even 5% of the populations are not computer literate enough to buy or pay their bills online.  The majority of the people of the country, over 90% use cash for all their transactions whether it is to buy groceries or buy a TV set or washing machines.

We do not know if the new Rs 2000 notes have a GPS system to track black money. We do not know if the Mangalayaan image in the new Rs 2000 notes has a hidden cameras to take photographs of people who have black money. All these rumours have sprung from the RBI disclosure that the new Rs 2000 notes have a computer chip embedded in them like the new credit cards. But we wonder if Narendra Modi has thought about the astrological impact of putting the mangalyaan image on the Rs 2000 note. Mangal in the horoscope is considered very bad particularly for girls. The belief is that if you marry a girl who has mangal the husband will die. Which was why Aishwarya Rai was married to a peepul tree before she was married to Abhishek Bachan. Or may be putting an image of mangal is to bring a curse on those who deal with black money.

steps to Combat Cash

• 22,500 ATMs would be recalibrated to hold new Rs 2000 note by end of November 17.
• Families can withdraw Rs 2.5 lakh in one go for weddings.
• Farmers can withdraw up to Rs 25,000 a week against loans sanctioned to them.
• Traders in wholesale markets can withdraw Rs 50,000 a week.
• Last dates for payments of crop insurance premium has been extended by 15 days.
• Class C Government employees can draw salary advance in cash upto Rs 10,000