Anil Bokil is a Founder/Director of a body called Arthakranti Pratishan
These days, he is happy that Prime Minister Narendra Modi has set in motion one of the big ideas that ArthaKranti Pratisthan , the Pune-based think-tank he founded 12 years ago, has proposed.ie the demonetization of Indias high value notes
“It is a surgery done without administering the patient the dose of anaesthesia,” Bokil says about demonetisation of the currency notes of Rs500 and Rs1,000. He calls it “currency compression”, not demonetisation. “We have proposed compressing the currency so much that the Rs50 note becomes the highest denomination in circulation. We are not there yet but eventually we will,” prophesies Bokil with the easy certitude of a pragmatist.
“We are not saying we go completely cashless. Some cash will have to be there, but we need to set the bar at Rs50. For a country like us where 70% of the population survives on just $2 per day, why do we need currency notes upwards of Rs100?” asks Bokil.
The 55-year-old mechanical engineer has been an employee, employer, entrepreneur, economic theorist, and activist. “He has done many things in life and all of them in his own unique and fundamental way,” says Prashant Deshpande, Bokil’s colleague at ArthaKranti .
Bokil comes from Latur in Marathwada, Maharashtra . Though ArthaKranti as an organization was registered in 2004, Bokil had started working on these ideas in 1999.
Otherwise chatty, Bokil is reluctant to speak about himself and insists several times during the conversation that it is the people at ArthaKranti Pratishthan, and all Indians themselves, who should be credited with the beginning of this task of currency compression. “ It is the campaign that we all started 16 years back” Meet Anil Bokil, the man who gave Narendra Modi the idea of demonetisation
Here is the Bokil cure for all of Indias ills pictorially(from his own website)
Here are Bokils ideas in writing
1: Complete abolition of taxes, direct and indirect by the Central or State governments and also the local bodies.
2: The taxes were to be replaced with Bank Transaction Tax (BTT), wherein every inward bank transaction would attract a levy (say about two per cent). It would be a single point tax deducted at source. – The deducted amount would go into the government kitties at various levels (Centre, State and Local, broken up in perhaps a ratio of 0.7 per cent, 0.6 per cent and 0.35 per cent, respectively). The concerned bank will also get a share of say another 0.35 per cent. Of course, the BTT rate would be decided by the finance ministry and Reserve Bank of India.
3: Cash transactions (withdrawals) would not attract tax.
4: All high denomination currency (anything above Rs 50) should be withdrawn.
5: Government should create legal provision to restrict cash transactions to Rs 2,000.
Effectively for all practical purposes India becomes a Cashless Economy if his proposals are taken in toto
All transactions above rs 2000 must be through banks both due to legal compulsion and the impracticality of entering high value transactions with the highest denomination being Rs 50
Effectively there will be TWO economies one for the poor daily wage workers and their families who live their daily lives with the low denomination currency cash and the other for the middle class and the wealthy who will only (or mostly) transact using banks and banking transactions
Since most important transactions are valued at over 2000 Rs they will all have to pass through the banking system to have any legal sanctity. People will be totally tied to banks
Their whole lives will become cashless and they will become dependent on bankers and banking intermediaries (both private and public)
Indian Banks both private and public have a reputation for corruption Managers give loans to undeserving businesses after getting their cut There are reports of management posts being “sold” to the highest bidder in high profile bank branches.The probability of bank scams big and small goes up if all transactions above rs 2000 have to go through banks
Ridiculous though the whole “system” sounds, what might actually happen is Modi might ignore the taxation part of Bokil’s proposals and just go with proposal 3 and 5 ie withdraw the high denomination and place restrictions on cash transactions above a certain value
Which will effectively make India an almost cashless society and reduce the cash economy to daily wage labourers and the real poor
Bokil’s proposal no 5 ( ridiculous though it now sounds )assumes significance in the light of a report by a Special Investigation Team on black money which recommended a ban on cash transactions of above Rs 3 lakh and restricting cash holding with individuals to not more than Rs 15 lakh to curb illegal wealth in the economy in July 2016 Ban cash transactions of above Rs 3 lakh to curb black money: SIT
Modi could use that report to ram through a ban on cash transactions above 2 lakhs (which is what Bokil is saying only with a lower ceiling of 2000)
As of today 70 percent of banking transactions are via Government owned banks (PSU Banks) However gradually there will be another clamour from people like Bokil to privatize Indias Public Sector Banks
A Few years down the line there will be clamour for Foreign private banks to come in
A new version of the East India Company will begin