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President breaks silence on Demonetization, says it may slow down economy

Written by Meghalaya Times. Posted in Editorial

Thomas Lim
The 13th President of India, Pranab Mukherjee while addressing the Governors of States and Lt. Governors of Union Territories through video conferencing while delivering his New Year address to look at social problems affecting millions in our farms and factories, stressed that this should receive their focused attention as Demonetisation may lead to a temporary slowdown in the economy, while immobilizing black money and fighting corruption. He called upon the Heads of States to be extra careful to alleviate the suffering of the poor, which might become unavoidable for the expected progress in the long term.


Mukherjee making it clear that he appreciate the thrust on transition from entitlement approach to an entrepreneurial one for poverty alleviation, however expressed his doubts that the poor can wait that long. The President stressed that the poor need to get succour here and now, so that they can also participate actively in the national march towards a future devoid of hunger, unemployment and exploitation.
The President also highlighted that the GDP growth of 7.2 per cent in the first-half of 2016-17 which is the same as that of the last year is a pointer to the fact that our economic recovery has been on solid grounds. Also that Indian exports have been affected by weak global demand, as a remedy on the low export during the last fiscal. The President said that reviving exports will remain a challenge but we can overcome it by improving the competitiveness of the domestic industry.
While at ground zero, particularly in the North Eastern region where industries and export are almost non - existent are fighting yet another face of economic slowdown. With the very slow pace of life style due to the absence of Multinational Corporations (MNCs) the day to day activities are solely dependent on the small trading, hence the day to day business transactions of small traders and daily wage earners were the most affected, which could not attract the attention of the President.
The Central Government is pushing for a cashless economy, where Telangana’s Ibrahimpur became the first cashless village in south India. This sleepy village about 125 km from Hyderabad officially became the first hamlet in south India to go cashless. Except for school-going children, about 1,200 villagers belonging 370 families were given debit cards. Ibrahimpur is represented by Chief Minister K Chandrasekhar Rao’s nephew and irrigation minister T Harish Rao. 
In the situation for the North Eastern region, the shortage of small denomination notes and almost non - issue of the new Rs 500 note have paralyzed the day to day transactions of the small traders. In the border state of Manipur the traders have started to issue self stamped and signed tokens as the promise note for payment in order to meet the shortages, which is of course, according to the Reserved Bank of India, a violation.
Also, being pushed into a corner by being unable to repay a loan of Rs 10000, a prosperous farmer, Wajning G Momin (50), a resident of Sindilgre in South West Garo Hills (SWGH) district hung himself on December 8, 2016. The unfortunate incident is due to the cash crunch after the recent demonetization where the bank failed to make payment of the limited withdrawal as assured by Reserved Bank of India. Momin, who belonged to the unbanked rural folks, was making an earning of over lakhs of rupees annually from his farming produce, which is not taxable. He, like many in the Garo Hills region had never kept money in banks and preferred to keep the entire earnings in hand. However the recent demonetization announced by the Prime Minister, Narendra Modi, forced him, after he was cajoled to do so by his family members, to open an account and put his entire life savings into the bank amounting to over Rs 50 lakhs.
Here in the North Eastern region, many remote villages still do not have banks, not to talk about the ATM services. Meghalaya is no different, when it comes to the unbanked sector, an official from the Reserve Bank of India (RBI), Shillong talking to this media house informed that despite their initiatives to bring the unbanked villages under the purview of banks the results are varying and not fully satisfactory.
Hence for this region, where industries and exports houses are negligible, the Governor of states from this region should stress on more circulation of small notes so that the region too can participate actively in the national march towards a future devoid of hunger, unemployment and exploitation.


 

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