Editorial: Demonetisation – a good move with utterly poor planning

By: Iftikhar Islam

The effects of utterly poor planning of the Modi government while taking the decision on demonetization is all well known to us. In the process to wage a war against the black money hoarders, the Modi government has utterly failed to protect the poor and middle class men who lead their day-to-day life on cash transactions. The small-scale industries and daily wage earners are effected to the core. 

I call this as an arrow that has deliberately missed its target. We know that the major portion of the black money is hoarded in various industries like Gold, Real Estates, Textiles, etc. Modi government has consciously left the big fishes out of the target and gave them ultimate room to escape from this trap. The only few that have got trapped in this shackle are common man, traders, daily-wage earners, and most importantly the opponents (obviously of BJP). 

Demonetisation should have been done with utmost minute planning – keeping in mind about the welfare of a common man – where the major sufferings should be for those who literally play with the economy of the nation. We need to work to bring back every kind of “Black Asset” that has been almost idle for years. 

The main reason for the hoarding of Black money is imposing of heavy taxes. If the government revives the concept of taxes and relieve the traders and small scale industries with low taxes and encourage entrepreneurship in the country, many of the problems – including of black money – gets solved. 

When we have low taxes – say 10%, even it can be lower than this – people who have wealth starts investing in businesses. Even those who have ideas and are aspiring entrepreneurs gets capital and generates income with the employment opportunities. When we have low taxes the number of tax payers gets increases as there will be more entrepreneurs. Entrepreneurship is the solution for many economic problems we are facing. 

Instead of going to the root cause and treating the disease. The government is just acting superficially and keeping the main problem intact. The steps taken by the government will create more problems in the future than solving the existing ones.