Ever since the government announced its drastic move to suddenly ban 86 per cent of India's currency in circulation, stories of severe hardships due to the resulting cash crunch, including instances of violence, people suffering and even dying in horrendously long lines in front of banks have come to light.
While Prime Minister Narendra Modi's move to curb black money and corruption may be well-intentioned and is, admittedly, in the interest of the country's larger good, the poor planning and execution of this "landmark" policy is becoming more and more clear as the growing public anger shows. However, it might not be too late to course correct some of the harsh fallout. And given the long haul people have been asked to prepare for, here are nine interim measures the government and the Reserve Bank must immediately consider until things get smooth.
1. Announce strict penalties for violators of government's directive to accept old notes. The government has announced a long list of places that are mandated to accept the old currency including government hospitals and pharmacies. However, there are numerous reports of private hospitals turning away patients and even children. Last week, a newborn died in Mumbai when the parents couldn't pay the hospital in the new currency. Some pharmacies are reportedly not giving back change for the old Rs 500 and Rs 1,000 notes. Strict penalties should be announced to ensure such inhuman acts are deterred. All private hospitals should also be instructed to accept the old notes until the current cash crisis gets smooth.
2. Food coupons: With millions in the the country without a bank account and no IDs or Aadhar cards to go to a post office to exchange their currency, urgent efforts should be made to provide for rationed food items for people stuck without IDs and bank accounts who are unable to buy basic food items using old money. All government cooperative stores should operate round the clock to make up for the inconvenience. The processing time for bank account openings and Aadhar card provisioning should be made even shorter. And even private supermarkets should be allowed to accept the old notes on essential food items.
3. Designate separate service counters for senior citizens, differently-abled people and women with children. All banks and post offices should be instructed to provide more humane ways to serve senior and differently-abled citizens and women with children. Ideally, cash collection at homes should be introduced. But in the absence of that, all banks must have separate counters to serve them. And RBI officials should do random checks to see this is taking place.
4. Direct banks and post offices to operate long hours to meet the high demand. In the words of the prime minister, the "pain" is expected to continue for the next several weeks. Banks should be instructed to stay open on holidays and weekends and work longer hours on weekdays. On Monday, November 14, banks were closed, causing even longer lines on Sunday just days after the policy was announced. The lines are expected to be worse on Tuesday. This should have been thought through and further bank closures should be avoided.
5. Designate rest areas for people standing in queues outside post offices and banks. While it may not be possible to provide seating outside each bank branch, but all the major branches should receive assistance from the government in providing temporary relief in the form of better queue management and rest areas. There are reports of the elderly falling in exhaustion. With so many thousands of crores of money already flowing back to bank branches in the past few days, surely the government and RBI can direct banks to use a fraction of their billions for better customer service. After all, banks are only trustees of public money and banking institutions should ensure their customers don't feel harassed.
6. Inform the public of the direct benefits of the scheme and its timelines. By when can people start seeing results from this sweeping move? The promise of "long-term" gain to the economy and solving corruption, while admirable, is too vague for the millions who are going to withstand lost hours of work and income over the next few weeks. Some assurance to them on what this means for the country's innocent citizens will be helpful in rounding up even more support. For example, how much black money is the government targeting to flush out in rupee terms? What is the estimated long-term benefit to the GDP of the country?
7. Phase out cash transactions at all government offices and ban cash donations to politicians. All dealings with the government should gradually become digital transactions as opposed to cash payments. Donations to all political parties and government in cash should be banned with immediate effect as that continues to be a big source of corruption.
8. Financial assistance to small traders in setting up card payment infrastructure: Several small traders and vendors are unable to sell their goods as many in the public are short of cash. And the costs of installing card machines can be prohibitive costing anywhere between Rs 5,000 and Rs 10,000. The government should work to provide temporary relief as an interim measure to smoothen this transition out, along with introducing long-term measures to make the use of card accepting machines economical. Many banks charge high fees from merchants and traders on the use of machines, which is one of the main reasons many merchants haven't installed these card machines. India's card payment infrastructure is a fraction to the size of the economy with one the lowest digital POS to population ratios.
9. Stop demonising people standing in ATM and bank queues. In the past few days, some members of the government have callously referred to people standing in queues as scamsters and black money hoarders. There are thousands of innocent, hard working people who are lined up to withdraw their hard-earned, honest incomes. They don't deserve such insensitive remarks and people making such slanderous remarks should be reprimanded.