Jaykay SIr,Response to post #36
Let me explain.
Demo - on the surface, it looks like an easy switch of notes for a few days and at best 2 months. So why should this impact the economy.
Anytime one disrupts flow of - currency, people and goods, then the economy will get disrupted. Here all 3 got disrupted as people abandoned work and stood in queues.
First, Businesses running on cash had to deposit all the money and then withdraw in small lot of 20k inr for months distorting their cash flow. Why ? Because banks ran out of cash and had to impose cash limits to avoid full scale rioting.
Second, business sentiment collapsed. People simply stopped buying after demonetisation. They only spent on essentials leading to massive inventories piling up across the country leading to systemic losses. And these businesses could not pay the bank loans and started defaulting which led to banks collapse - IDBI and ilfs and other state led banks. Hence they had to do a full scale bank recapitalisation.
The business sentiment was down for months (and still not recovered fully), severely disrupted the businesses and millions collapsed across the country.
Same thing happened last 3 months back. Fuel prices went sky high and then it came back down. But business sentiment collapsed in the meanwhile and people stopped buying cars and scooters leading to massive inventory pile up and losses.
not to mention, there are lots of cascading impacts due to demo which I have not listed here.
Poonaiku yaru maniya katrathu ?? which loosely means, who will take the first steps?? Its easy to cry that things are not working, but only if some one is bold enough to try out policies that will help in the long run. What new things did Congress implement in the first 25 years?? We remained a socialist country with joblessness, poverty and red tape. It needed some one like Narasimha Rao and Vajpayee to lead the change.
While I dont believe in some stories like surgical strikes, terrorist money supply cut off , demonitization etc , why dont you talk about the good schemes like Health insurance, job creation etc??
The real PITA is for the politicians. If every thing is made electronic, it requires accountability - which we all hate.