DNA Edit: All about the debit, no credit where it’s due

The 2000 rupee note is proving too big for existing ATMs forcing many to be recalibrated. Many object to the colour purple—but that’s probably coming from a preference for black. It’s in the same colour spectrum, but merely made whiter. As the news hit, many were caught unawares. The first move most made was to convert stashes of black into bankable gold. In Zaveri bazaar, jeweller’s stores worked through the night and, according to local intelligence sources who made the rounds on foot, made above Rs 40cr of business on the first night. By Day 2, jewellery shops were being raided by the Income Tax department and gold prices had crossed the Rs 50,000 per 10 grams mark due to inflated demand. Cash deposits into bank accounts sky rocketed. By Day 3, panic had set in. Queues were lengthier and ATMs were running out of cash quicker than expected. A few were vandalised and many inconvenienced. Some leaders wanted to know why they could not access their not-at-all hard-earned money. By Day 4, social media had declared it an unmitigated disaster.

Yet, it’s not all bleak. The banks received Rs 22 lakh crore in deposits of cash until Saturday afternoon that had previously not been part of the banking system. New bank accounts are being opened, the exact number will only be known when the exercise ends. Tabs are being kept on large sums being deposited in benami accounts, in the names of those with low incomes who may be being used as fronts, and on those whose deposits do not match their declared incomes. The RBI has asked banks to declare those who make daily withdrawals. Those who neither used the Income Declaration Scheme nor have a legal source, have had ill-gotten gains turned to ash.

The focus on black money being smoked out is one thing, the conscription to financial inclusion is another. All that is unaccounted for wealth is not black, and all that is black is not the result of corruption. Some of it is evasion on taxes, others inheritances, gifts, the common man’s being held ransom to the larger bribe economy, etc. So while the disruption may seem futile in absolute terms, the larger gain has been in inducting the populace into our financial systems.

We now have the ability to truly enumerate our economy. For a country in which data available is absymal, the new data gives us the ability to map the country in a far more intimate financial detail than ever before. The move has even forced the hand of hitherto lazy late-to-digital public utilities like gas companies to create online payment interfaces. Forget the black, count the white. That we can now, is a good thing.