New Delhi, December 22: While Indians seem to be driven into hardship and inconvenience post the demonetisation of the Rs 500 and Rs 1000 notes, it seems as if the situation could turn for the worse. While things appear bad now, India is in a far more comfortable place than Venezuela, the only other country that launched a demonetisation campaign during the same span of time. Which is why, if the Finance Ministry and the Reserve bank of India (RBI) do not restore the economy back to normalcy, a fate similar to that of Venezuela’s could soon descend upon India.Also Read - After Parag Agrawal Becomes Twitter CEO, Elon Musk Says 'USA Benefits Greatly From Indian Talent'
While Prime Minister Narendra Modi announced the government’s decision to demonetise Rs 500 and Rs 1000 notes in televised address to the nation on November 8th, Venezuelan President Nicolas Maduro followed a similar path by announcing on December 11 that Venezuela’s 100 bolivar bill, would be withdrawn from circulation. People were then given a time limit of 72 hours within which to use their demonetised money. Also Read - We Did It Together Bro: Rachin Ravindra to Ajaz Patel As They Discuss Nerves
A further period of ten days was extended to have the 100 Bolivar notes deposited in bank accounts. Serpentine queues much like those seen in India started forming outside Venezuelan banks and ATMs. The tale that followed though, was one of loot, plunder and protest. Also Read - Attention Flyers! Be Prepared For Longer Wait at Delhi Airport After New Omicron Guidelines | Deets Inside
The 100-bolivar note constituted 48% of all the currency in circulation in the Venezuelan economy. This is much lower than the concentration of the demonetised notes in the Indian economy which amounted up to a whopping 86%. Maduro and his government, could not however, replace the demonetised notes effectively.
As massive anti-government protests and open thievery took off, in the town of El Callao, a 14-year-old boy was shot dead during a regular looting. Meanwhile, reports state that approximately 135 people have been arrested just in the province of Bolivar, which was the worst hit by demonetisation.
Maduro’s explanation for demonetisation was that the 100 Bolivar bank note was being bought up on the black market and then use it to buy subsidised goods in an inflation-ridden Venezuela only to later sell at a profit in neighbouring Colombia. When his plans didn’t quite work out, though, Maduro proclaimed that a sabotage campaign had been launched by “enemies” abroad which led to the delayed arrival of three planes carrying the new 500, 2,000 and 20,000 bolivar notes. These notes were to replace those that were demonetised.
Speaking from his presidential palace Maduro had said, “One plane, contracted and paid for by Venezuela, was told in flight to change direction and go to another country. There’s another which was not given flyover permission.”The ensuing chaos witnessed the opposition calling the Venezuelan government “utterly stupid”, people desperately fleeing to Columbia for basic food and medicines and an army trying its best to keep in check ever surging protestors.
Eventually, demonetisation had to be rolled back in Venezuela. The Venezuelan horror story of demonetisation makes one really wonder how such a vast and diverse country like India, is to confront an 86 percent demonetisation. It seems, for now, that it is the sheer goodwill of the Indian people and their tolerance towards inconvenience in hopes of a black money-free economy that is keeping India from spiralling into a whirlpool of protests.
According to Finance Minister Arun Jaitley, the Reserve Bank of India has sufficient currency to be supplied even after December 30. Pacifying citizens Jaitley had earlier said, “The Reserve Bank was fully prepared to deal with currency shortages post demonetisation and has enough currency in its chests to last far beyond December 30.”
Of the Rs 15.44 lakh crore that was demonetised on November 8 (Rs 8.58 lakh crore in Rs 500 notes and Rs 6.86 lakh crore in Rs 1,000), the RBI has already supplied over Rs 5 lakh crore worth of currency to the markets, according to Department of Economic Affairs Secretary Shaktikanta Das. Further, the finance ministry plans to inject at least 50 per cent worth of new currency to replace the amount of old notes of Rs 500 and Rs 1000 that will be deposited in the banking system by December 30. If it fails to do so, however, not much imagination is required to picture what await India. After all, Venezuela has already given us a glimpse.