India: Surviving the Currency Demonetization as a Nation

India recently demonetized Rs. 500 and Rs. 1000 currencies overnight in order to fight terrorism and black-money. However, it saddens me to see a lot of well educated, middle+ class who can afford to use alternate payments for a majority of transactions, still complain.

Everything about the regulations

I'd rather not be redundant. However, as a precursor to this article, I'm simply going to refer to the RBI and banking sites, which are the most credible sources of this information. In the unlikely event that something you read in a newspaper, or elsewhere conflicts with this - they are simply wrong. Period.

Why write this?

I ran into quite a few social posts in the past two days, which were all mostly just angry rants in different forms, providing some skewed logic as to why this move by the Modi Government was a terrible idea. And worse, they were all from well educated middle or upper-middle class families. All of them generally surround the justification that India is still largely a cash based economy, and usually involve some variant of an anecdote where boy meets merchant - merchant has no change - doesn't accept payment - boy goes home - writes social post against Modi. So, I decided to take a moment to pen this down.

Who does this really affect?

Well, let's face it. Change is not always easy. If you're a part of the lower class, I can't even pretend to understand the pain you're going through. However, if you're reading this, there's good chance that you're a part of the middle+ class. If you have a bank account, a computer or smartphone with internet, and don't live on a day to day salary - you simply forfeit the right to say that this change is disrupting your life. Yes, you certainly may come across certain inconveniences - but that's not a life-disruption. If it somehow is, you've brought that upon yourself by your own choices, not the Government.

Why? Because, you have already been given all the tools - Credit cards, Debit cards, NetBanking. Use them. If you do not like to get along with society and choose not to - that's entirely up to you too - but do not complain.

Now, that we got that out of the way, let's look at how to ease the transition as a responsible citizen.

A few steps to ease the process

Here are some very simple ways to mitigate the inconveniences, as a middle+ class citizen. I'm not going to pretend to comprehend the troubles of the lower class, so these steps are targeted towards the middle+ class - and in turn, this helps both yourself, and the lower class society. This is all assuming that you don't have black money, and your money is all well-accounted (or atleast reasonably). If not, well.. that's a completely different story.

1. Stop complaining

I can't emphasize this enough. Either be a part of the solution, or shut up - Don't be a part of the problem. It's already hard enough for many. They don't want to deal with your rant as well.

2. Write yourself a check of upto 10k and go to the bank with all your cash

Take all your loose cash, along with your check, and go visit your nearest bank. Now, when you encash a check, the current limit is 10k, and it also doubles shortly. So, you can get as much cash as you can in one-shot for surviving the next month. 10k is a lot more than what's required in the form of cash payments for most - infact, its over-the-top luxurious, given the cashless payments modes.

3. Be nice to banking staff

The banks are the doing the best they can to ease the process. Almost all of the staffs are working over-hours, and trying to keep up with the enormous rush. So, be nice to them. If you add on to their troubles, they're only going to make things worse for you. If you have a genuine emergency, be nice and try to explain to your fellows ahead of you. It's likely, at-least in the good cities like Chennai where I live in, people will empathize - But don't misuse it, they'll also know if you're being a jerk.

PS: I can't comment on the Government banks staffs. Use your discretion - Be rude, or revolt there if you have to. Thankfully, I don't deal with them. But in my experience, the private banking staff have always been well accommodating, provided you are nice to them.

4. Figure out your cashless payments

This should rather be obvious. A lot of the bills in India can now be payed online, even in the rural areas. If you don't, it's very likely you just haven't looked at it yet. So, sort out your payments. However, if you're shopping on Amazon, Flipkart or virtually anywhere else that accept cashless payments - go knock yourself out! If you're in the cities there's really nothing to complain - even a lot of the affordable stores accept cards. Food, groceries or pretty much anything else you need still even gets delivered to your doorstep - there's obviously a small premium that's significant for the lower middle class, but whether or not that's better than spending your cash is upto you to figure out.

If you're a part of the upper-middle class, you have a great potential to help the society, by just modifying your routine very slightly. Use online payments for you regular bills or if you're paying any business or company, as usual. But whenever you're directly paying a vendor at the end of the chain - use cash. Prefer to go outside, and buy things from small vendors, if you can. 10k is a lot of loose cash for a month - let your brand new notes go to those who need it. Because, you really don't.

5. Give away your 100s and new notes

Wait. What? Aren't they the precious ones? Yes. So, stop protecting, hiding, and locking them up to be uselessly sitting in your secret stash. If you're a part of the middle class, and you the do the above correctly, you don't need a lot of this. Set aside some for an emergency, and spend the rest. And by giving away, I don't mean some dramatic gesture - Start small. Most Indian households have a maid or two working part-time. That's a good start. Advance some of their salaries. If you live in an apartment, you also have a few security guards - give them some, or atleast offer to exchange. If you run a business, you know you can do more. Enough people do this, the lesser rush on the ATMs - eases the transition. Puts more valid currency in the streets.

It's unfortunate that a lot Indians are either so self-centered, or underestimate themselves that they think they don't have an impact on the society. They do. Small numbers add up.

Is this all worth it?

We are, who makes the country.

I strongly believe so. The country is just its people. Making a difference involves people making an effort. This move certainly is not a single silver bullet, nor is it shot in sky. Its a well targeted, ONE-step forward. The whole plan relied on its secrecy. Was there a debate, this would just sat down in the parliament for years with no action, while everyone had ample opportunities to invest their black money on beautiful islands in the west. Let's not forget, the sole reason we have to go through this, is because of the accumulated non-action in the past.

So, how do we beat the crisis?

By being a responsible citizen.

Yup, it's just a fancy phrase. But it's high time to give it some real meaning. The above suggestions, could be a good start. The whole idea is to give the Government that is evidently making an effort, and the banks more time to stabilize.