Saturday, November 26, 2016

Demonetization and what people think


So the Prime Minister Narendra Modi recenly announced that all Rs. 500 and Rs. 1000 notes will become illegal starting midnight of 9th Nov. This according to him, is the first major step towards curbing black money, counterfeit notes and terrorism. 

Within hours of the announcement, there was widespread confusion and chaos. Everybody was discussing the issue with the level of zeal you would probably find a newly wed man to have right before his first night. There were the news channels that were busy zooming in and out the image of the new Rs. 2000 note, there were the Kejriwals who were busy conjuring new conspriracy theories of how this will only help Modi and his chachaji and driver and driver ka dhobi, and then there were the bankers who probably first went - "Abe, kal holiday hai. Chal daaru lene chalte hain. #Modi Rocks" to "Oh bhenc, Modi ne to ham logon ki maar li"

Within all the madness and frenzy, were one set of people that all the uncles and aunties looked up to for their gyaan - The Yem-Be-Yay's.  I mean c'mon - The 20-something MBA grads who have spent lakhs of rupees to read case-studies from Harvard and Yale and Kellogs must know how this will impact the aam admi right. Ahem! Of course we do. The impact can be answered in 2 key words - "It Depends"



Probe a little further and you will see the knowledge bank of this elite species gush out like Niagara Falls after it has smoked up. I had the opportunity to ask some IIM Grads about their opinion on this  - "See. There is a concept called as monetization. When you buy an air ticket from Southwest Airlines, you buy it with what common people refer to as 'money'. This money is then used for improving supply chain inefficiencies, driving core competency, increasing shareholder value and boosting brand perception. This is called monetization. If you don't pay Rs. 500 and Rs. 1000 to Southwest airlines, it will become demonetized and hence they might ask you to pay by card instead. Also, this will help reduce black money, counterfeit and terrorism".

*Not sure why he was asking me if there were marks for CP though*

Dare you ask why Southwest airlines? "We could take any other example. Starbucks, Walmart, Ryan-air etc. These are just some that come to my mind". Turns out, these are just the case studies you will find all IIM grads read during their 2-year course.

Nevertheless, I was still intrigued and went on to ask another one what he though - "What about PayTm? How is this decision helping them?" And he replied - "PayTm works on a single-threaded goal to make India cashless. It is in its VMOG statement. I bet they will soon consider vertical and horizontal intergration to achieve synergies in the long run."

Alright. But how will it help curb black money? I mean isn't most of the black money stored in Swiss banks? "Yes. That's a very good question. Let me get back to you on that."

Hmmph. Any closing words? "Bhai, Tere paas Sonam Gupta ka number hai kya?"