In the transition to a cashless society, Prime Minister Narendra Modi will be
demolishing many myths. First, only an economist can understand the economy. This
is a generic assertion. Rather the differentiation should be made between a mediocre
and a visionary politician. A leader is not afraid to take a stand that might cause pain
in the short term but packages it so attractively that the followers are willing to make
the small sacrifices called of them. On this criterion, the prime minister has passed
with distinction, modifying the implementation as per feedback without losing sight
of the objective of sucking out the excessive cash from the system. Second, firmness
is not a disadvantage. Instead, it can turn out be a virtue when the going gets tough.
There is already optimism that the next big move to stimulate the economy will come
early next year or in the budget for the next fiscal to be presented on 1 February.
Third, a government-mandated changeover to a new environment can be achieved in a
limited timeframe. Sudden disruption can lead to chaos but there are times when
beginnings have to be abrupt so that the old system is discarded fully. Though the
switch to de-mat trading was achieved in phases by the stock exchanges presiding
over a universe of one of the largest listed equity markets in the world, a timeline was
adhered. If the current turmoil results in India achieving a state where only about 10%
of the transactions are in cash as in many developed economies, the daring experiment
will be emulated and examined by historians in the years to come
Source: Capital Market Editorial
demolishing many myths. First, only an economist can understand the economy. This
is a generic assertion. Rather the differentiation should be made between a mediocre
and a visionary politician. A leader is not afraid to take a stand that might cause pain
in the short term but packages it so attractively that the followers are willing to make
the small sacrifices called of them. On this criterion, the prime minister has passed
with distinction, modifying the implementation as per feedback without losing sight
of the objective of sucking out the excessive cash from the system. Second, firmness
is not a disadvantage. Instead, it can turn out be a virtue when the going gets tough.
There is already optimism that the next big move to stimulate the economy will come
early next year or in the budget for the next fiscal to be presented on 1 February.
Third, a government-mandated changeover to a new environment can be achieved in a
limited timeframe. Sudden disruption can lead to chaos but there are times when
beginnings have to be abrupt so that the old system is discarded fully. Though the
switch to de-mat trading was achieved in phases by the stock exchanges presiding
over a universe of one of the largest listed equity markets in the world, a timeline was
adhered. If the current turmoil results in India achieving a state where only about 10%
of the transactions are in cash as in many developed economies, the daring experiment
will be emulated and examined by historians in the years to come
Source: Capital Market Editorial
