By Anuvab Pal

The economy after demonetisation feels like two extremely polite gentlemen in a lift, both not wanting to move, saying, “You first.” “No, you first.” In a word, stuck.

Rarely anywhere in the world can one remove 86 per cent of the cash in circulation, and then tell the economy, “Right, carry on as usual.” It is like telling someone, “Just because I have removed your legs, I fail to see why you cannot walk at the same speed as before.” Cash was a perfectly legal core balance of the economy. From buying an orange to paying suppliers.


Suddenly, one’s told, “Yup, some people have black money and we can’t catch them. So, you know what, I’m making money illegal.” It’s like saying, somewhere in your house there are cockroaches and the best way to kill them is to burn down the house.

No house. No cockroach. That’s the new normal. To which, naturally, your response would be — as India’s is with cash — “Um, but I live here.”

In a cash economy, you don’t have to be Einstein to realise that people’s business and home life had a monthly system of cash, cheque, bank transfers, the proportions varying on urban and rural levels of education, familiarity with technology, etc. The system had links in a chain. People you paid in cash paid others in cash and so on.

Now, one’s taken a third of the system and broken it. And unless our PM went home to home, sitting down with each family and saying, “Right, now show me how you do your monthly accounts.

Whom and how much do you pay in cash at home and in your office? And let’s digitise this baby right now,” one can’t really tell when the economy will stabilise or businesses adjust. Because no one is sure what they are adjusting to.

Sure, we’re a jugaad economy, but the economy is asking, jugaad of what? So, like a bear in winter, people are saying, “I’m not investing or hiring or pushing sales. I’m going to sleep. Wake me up when this is over and the economy is warmer.”

Also, claiming it will be solved in 50 days is like saying, “I know precisely when you will stop grieving for the loss of a loved one. Yes, it will be two Thursdays from now at 5.03 pm.” There is no way to know and it is also a collective idiocy to expect a single individual to have an answer to when we’ll adjust to a way of life changing.

One just doesn’t know the future and the biggest surprises often come from areas one least expects. If you take away walking, you expect people will cycle. But suddenly roller-skating becomes fashionable.

So, sure, in the long run, it will make everything transparent. But as of now, it feels like the economy has suddenly been punched in the nose without warning. Even though the government is saying, “Oh, he’ll get up,” the economy is saying, “No man, it hurts, and I prefer being knocked out.”

Also, how to stop the hoarding of cash might prove to be an endless loop. Say, you increase cash supply to banks. Once you’ve broken the faith, the more you ease restrictions on how much people can withdraw, the more they withdraw and the quicker the banks run out of cash everyday. The problem, therefore, isn’t getting cash in the system. It is faith in the system.

So, the mood in most enterprises is cautious and looking over the shoulder to see what the competitor is doing. Once you see they’re doing nothing and waiting and watching, so are you.

And that’s when the economy becomes the two gentlemen in the elevator: nothing moving, nothing happening, just going up and down, never leaving the elevator to go anywhere.

People are going into offices discussing the logistical success they had the night before at getting cash, or frustrations of not getting cash, or uploading truthful and deceitful videos of mass hysteria, or the mass support. But the wheels of ambition have ground to a halt. Economies grow because people take chances. Not when people sit around and ask, “Um, now what?” It is as if the entire machinery of success-at-any-cost Indian entrepreneurial enterprise has transformed overnight into a group of retirees at a public sector bank, sitting around and asking, “What’s next?” without doing much to make the next thing happen.

Einstein had said a madman is a person who does the same thing everyday hoping for a different result. The world’s fastest-growing economy feels like that now because someone gave it a medicine whose after effect is…waiting.