Anti Black Money Day

Today is the first anniversary of the Demonetisation in India, announced on Nov 8 last year. Had posted many articles a year ago supporting the move, and am pasting one of the more “liked” ones below.

Still continue to believe that it was a great and necessary first step to curb corruption and root out black money. We’re able to observe some of these concrete benefits now:

1. Rising tax compliance
2. More fear in tax evaders
3. Growing digitization of transactions
4. Crackdown on shell companies used to launder black money
5. Large increase in PAN (Permanent Account Number) registrations
6. Decrease in terror funding


Managing “Change” (When you don’t have cash!) – Posted on my FB page Nov 26, 2016.

Hope you’re all having a Great Weekend! And sincerely hope that the current demonetization is not troubling you too much. Do share your experiences during the current demonetization, both positive and negative. And, if possible, do try to help those around you to transition to digital transactions via cards or mobile wallets. It’s important to transition to cashless transactions as much as we can and help others around us do so. Sometimes, the help might involve something as simple as helping them to open bank accounts. Have myself downloaded the PayTM app recently 🙂 🙂

This is a very unusual and turbulent phase in our country when we are undergoing a lot of “change”. Coping with change (and getting change 🙂 ) is always difficult, and therefore there’s an entire field of study called “change management”. Here’s a “change management perspective” of demonetisation.

The current demonetisation is something that can be classified as a “disruptive change”. Disruptive change causes entire mechanisms and technologies to be replaced by new ones. Sadly, there’s never a pretty or foolproof method to conduct this kind of major change. There’ll always be a few people who are shortchanged or lose jobs in the process. Disruptive change is generally turbulent and inadequate in the beginning, but leads to rapid improvements later on.

Examples of disruptive change: Computers replacing typewriters, email replacing postal letters etc. To illustrate further, this is what Dr. Clayton Christensen (Professor at Harvard University), who’s an expert on this topic says: “Early personal computers were a disruptive innovation relative to mainframes and minicomputers. PCs were not powerful enough to run the computing applications that existed at the time they were introduced. These innovations were disruptive in that they didn’t address the next-generation needs of leading customers in existing markets. They had other attributes, of course, that enabled new market applications to emerge, and the disruptive innovations improved so rapidly that they ultimately could address the needs of customers in the mainstream of the market as well.”

In the current scenario, we’re hoping that an increase in digital transactions will accompany demonetisation and bring about benefits like lower inflation, lower tax evasion, lesser corruption, financial difficulty for terrorists, more money for government to spend on infrastructure etc. It’s therefore very imperative to adapt to cashless transactions. Apart from the knowledge and information on how to do so, mindsets need to change as well.

Many individuals do not want to transition because they’ll need to start paying taxes if they do so. However, we can’t have double standards and expect our Netas and Babus to be honest while we continue to evade taxes. There’s ample proof that digital transactions cut down corruption or make it easier to track. The best example in India is the advent of online railway booking. This step almost eliminated Railway touts who used to book tickets in bulk and cause difficulties to the common man.

Of course, there seem to be quite a few lapses in the implementation, however this is generally the case, because planning for disruptive change is a very difficult process, easier in hindsight. An insight from change management literature is that leadership during disruptive change involves managing unsurpassed levels of uncertainty, because no robust data exists to do prior planning. Constantly adaptive planning is the only way out (as is happening now), it involves studying the results, learning from them, and then constantly modifying assumptions and approaches. Given the extra burden of secrecy in this case, it would’ve been impossible to meticulously plan for every possible outcome.

No wonder many people said that demonetization was a “brave and risky” decision to take. However, the risk is worthwhile if it succeeds, because disruptive change can help you “leapfrog” – get significantly ahead. Most developed countries are mostly cashless and therefore have much lower levels of corruption. So far, it’s a good sign that despite the inconveniences, almost 86% Indians (both urban and rural, according to the recent C voter survey) have remained remarkably resilient, and are still supporting this move. This is a positive outcome and hopefully signals a better future.

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