Dear Prime Minister: The real test of demonetisation lies in the prices of daily commodities and tax slabs.
Much has been said about demonetisation with data, opinions, conspiracy theories, expert views floating on Whats App, media and other social media channels.
As we know the scheme could not have been successful without the support , patience and tolerance of common man.
Interestingly, country’s largest newspaper on business and financial matters finds trash to publish as headlines. (http://economictimes.indiatimes.com/magazines/panache/how-demonetisation-has-dealt-a-body-blow-to-the-big-fat-indian-wedding/articleshow/56038837.cms).
Some others are still busy showing queues and getting coerced feedback from one or two people who speak against the move.
These so called intellectual class of the country fails to understand that had a majority of citizens not supported the governments scheme there would have been riots all across the streets. Fortunately that is not the case despite political parties trying their best to incite the common man to rebel.
Therefore despite the media, certain channels and opposition playing negative role, who all are dedicated to project the scheme in poor light, the country has taken demonetisation in its stride and is leaping forward towards a cashless digital economy.
But the real test of the Modi government is not media or the opposition parties. The pain and sufferings is of the common man and those who have been at the receiving end of the deal like the farmers and people in remote and rural part of the country. And if this cannot check the hoarders and black markets , inflation etc in the country the objective will get diluted.
The question is besides controlling fake currency and corruption in the country, can the government provide some type of consolation to the common man and the middle class persons.
1. Therefore the test is can the prices of essential commodities like edible oil, pulses and other commodities be bought down. If yes than that will be the victory for the government. The government needs to keep an eye on price movements of essentials as well as hoarders. The inflation for November 16 was lowest since 2014 at 3.6 % yty.
The prices of pulses are still above Rs 150 a Kg. It has to come something like Rs 100 a Kg. the trend of pulses nationally and internationally has been weak after peaking in 2015. (http://www.agriwatch.com/getreportpath.php?db_product_id=200044&file=Pulses-Monthly-Research-Report-20161205.pdf).
2. Similarly can the tax slabs be made more liberal and rational. Can it be relaxed to 5 lakhs. Can it be made 20 percent up to 10 lakhs. These are the measures that are the real test of the government.
Both these issues are reasonable and well within the powers of the government.
And yes it will be also good to see whether the demonetisation drive will halt black and fake money circulation at least to an extent that can justify the hardship, sufferings and expenses behind the demonetisation drive.0