Demonetisation could well go down as one of India’s most monumental moves in recent times, both in intent as well as impact. While the merits and demerits of demonetisation continue to inspire animated discussions across the country, it is important to note that the train has already left the station and is gathering momentum. Moving forward, the real question would be: How do we take demonetisation to optimal fruition? And, more crucially, how do we make sure that we, as a nation, never end up bringing this situation upon us again?
The execution of a move this big in a country as diverse and large as ours was never going to be easy, let alone smooth. While the tangible benefits of legitimising lakhs of crores of rupees can be measured in terms of the effects on growth, inflation, lending and investments, the intangible benefits of this move is where the longer-term narrative of real change resides, benefits that go far beyond the tangible gains perceived largely as the body blow that demonetisation has dealt to corruption and tax evasion.
Comfort of verified safety
Firstly, it has driven home the message to hundreds of millions of people that the country’s currency and banking machinery knows exactly who has how much money and that such knowledge in electronic form is the safest way to secure one’s wealth. Many have come to appreciate better that their money in banks is safe, accessible and can be used anytime, anywhere. Just the realisation that someone in the formal sector is watching over one’s account balance and financial activity enhances the comfort of verified safety.
Secondly, every transaction, be it conversion, deposit or withdrawal, is captured indelibly in electronic records. Additionally, CCTV cameras across banks and ATM centers have created enough data for improprieties to be conclusively established with hard, often irrefutable evidence. Today’s technology can analyse these transactions and images in such a clinical manner that hiding the truth is no longer an option.
And finally, with growing automation across the income tax department, the registrar of companies and banks and financial institutions, the financial footprint of every individual and company is captured. It is only a matter of time before the right technology is applied to connect the dots and bring to book those falling foul of the law.
The message that stands out loud and clear through this is that in amplifying the impact of demonetisation into imbuing the system with lasting credibility, we must embrace even more of technology than we already have.
Aadhaar, a key instrument for improving governance and transparency…
The country has taken several significant steps towards improving its digital-readiness and elevating technology from a mere catalyst to a full-blown driver of development and everyday ethics. ‘Digital India’ has already called our attention where it is due. According to the Ministry of Communications and Information Technology, 93 per cent of adults in the country today have biometric-based Aadhaar cards. As the world’s largest online digital identity platform, Aadhaar will undoubtedly be a key weapon in improving governance and transparency.
The World Economic Forum’s Partnering Against Corruption Initiative (PACI) names four technologies as being pivotal in the fight against corruption: big data, data mining, mobile applications and forensic tools. A recent PACI report on the role of technology in boosting transparency points out that technology helps make transactions visible to the public, allowing social auditing, and reduces human intervention, in turn limiting risks of deviation. Blockchain technology, a remarkable financial innovation in building new work processes to make transactions and digital interactions more secure, transparent and efficient, holds great promise in the fight against corruption.
No more need for demonetisation; just a one time pain
The writing is on the wall: the only real hero that can help us win against the black economy is technology. It holds the key to future-proofing against the ills that precipitated the need for a drastic measure such as demonetisation. So far-reaching is the impact of technology implementation in the government and socio-legal machinery that it won’t be presumptuous to conclude that there will be no more need for demonetisation and that our current situation may very likely be just a one-time pain.