Chaos Reigns in N-E As People Struggle to Exchange Currency
ITANAGAR: Since the Centre demonetised Rs 500 and 1000 banknotes, stories and images of people lining up outside ATMs and banks to exchange currency notes have been emerging from across the country. Here in the Northeast too similar scenes have been playing out.
In the Arunachal Pradesh capital, Itanagar, long queues were seen outside of ATMs and cash deposit machines as people tried to either withdraw money and/or deposit notes of Rs 500 and 1000. In Assam, Nagaland and Tripura too similar incidents were reported. And just like in other parts of the country there is a severe shortage of smaller denominations in the region with banks mostly handing out the new purple-hued notes of Rs 2000.
Shopkeepers of general stores to butchers are complaining that the shortage of lower denomination of money is causing problems as they are asking patrons to shop in multiples of 500.
When Prime Minister Narendra Modi made the announcement on Tuesday night, the news was met with confusion and then chaos.
Three days later, not much seems to have changed and there is in fact, some amount of palpable anger over waiting in queue for their money. Inconveniences aside, a number of people here in Itanagar think it is a good move to curb out black money as was the stated goal behind the move. Whether or not the decision actually helps bring to book those hoarding large stacks of black money really works is yet to be seen and there is some ambiguity as to what implications the move will have in the Northeast.
Arunachal Pradesh, like the other states of the region, has a largely tribal population which is exempt from paying income tax as long as the person is a member of a listed Scheduled Tribe and works in a tribal-majority area.
As per the new guidelines, cash deposits of over Rs 2.5 lakh would attract tax besides a 200 percent penalty in case of income mismatch.
Without getting into the argument of whether there really is black money in the form of liquidity floating around or not, a common belief among many people in the region is that corrupt politicians and bureaucrats (including engineers employed with the government) hoard large amounts of cash acquired through unscrupulous means.
When it was announced that the move will help wash out black money, many did voice their support in hope that the corrupt few will now finally be brought to books. However, considering the absence of any income tax collection, it would seem that the move will not really impact the region in a major way.
One of the ways that move may have a positive impact in the region is if the list of the persons/firms making the highest deposits are released by the banks/RBI/government. However, considering that this may raise security concerns, it is unlikely to be done.
Another way to learn about any disproportionate assets is if banks report to higher authorities when ‘suspicious’ amounts are deposited into a bank account.
A third option is if the vigilance departments of the different states takes it up upon itself to investigate the deposits made by government employees and their spouses. Anyone who knows the system well will know that this is unlikely to happen. But what could possibly happen is that powerful politicians may use inquires and information to find out about deposits made by their political rivals and use that information against them.
That, unfortunately, may be the only way people of the region will ever know who’s worth how much.