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An Open letter to Prime Minister on Demonetization by our CEO

 

Dear Mr. Prime Minister:

 

Greetings. While I am not an economist, am writing this to you on demonetization and the way ahead from a management perspective.

 

I was delighted on 8th November 2016 evening when I heard you withdrawing the old Rs.500 and Rs.1000 notes which is nothing short of a master stroke to unearth black money, trouble terrorists, Maoists & other trouble makers etc., and I must admit is an  extremely bold step in Indian history to cleanse our economic system.

 

While some small objectives have definitely have been achieved, looks like some major objectives of the real black money to be out of system is not going to happen as people have successfully managed to convert all their black money into gold, real estate, through hawala system, with the help of corrupt bank officials – by opening bogus companies, depositing into millions of ordinary guys’ accounts, exchanging whatever they can and god knows in how many other ways which might be beyond comprehension of a common man like me.

 

You and people like us do not want this exercise to go waste. While many have professed & highlighted as to what could have been done, what went wrong or the plight of common man, inability to move to cashless economy of major population etc., not many I have heard or seen really given any concrete solutions or steps to be taken now to make this exercise successful.

Within my limited knowledge, I would like to give you a few suggestions for your consideration in this regard

 

- It should be made mandatory that all the government departments and sections should stop accepting and giving cash for all transactions above Rs.1000 with a clear cut dead line. First step towards less-cash economy.

 

- Every government activity should be made ‘no personal-contact’ system for public. An ordinary person should be able to avail every government service without going to government office. This will eliminate possibility of bribing. It is 100% doable with computerization and internet.

 

- No transaction above Rs.5,000 should be in cash. All the business entities like companies (all forms) and individuals receiving more than Rs.5000 in cash shall be liable for answering and it will be considered a criminal act with severe punishment.

 

- Any individual or a company holding more than Rs.100,000 in cash will be charged with criminal offence and entire money shall be confiscated with no recourse whatsoever.

 

- The above exceptions of Rs.5,000 per transaction or Rs.100,000 cash holding are not allowed for any jewellers, builders, auto dealers, or any other luxury goods/services sellers (can be listed out) and of course political parties for their donations. For these entities all inward transactions have to be non-cash only without any exception.

 

These five steps will make the demonetization drive definitely a success and move our country towards a less-cash (will not call it as a cashless as it is not needed as well) economy.

 

Am more than willing to give clarifications and suggestions if need be.

 

Truly yours,

A B Raju