Modi surgical lessons on black economy caught the nation by surprise. The initial reaction was disbelief, followed by trolls. We capitalized the event to get some posts viral on social media
1. A leader’s tenacity of purpose
Modi has cared two hoots about the backlash that will follow, both against him and the Bharatiya Janata Party (BJP). This could cost the party dear in the upcoming UP elections as well as the General Elections that follow.
He said “In every nation’s destiny comes a time when the actions taken have a defining impact on its destiny. We are at one such moment today”.
When we talk of organization transformation and case studies of a Jack Welch transforming GE; here is a man who has risen through the ranks and betted his fortunes on an attempt to transform a nation itself. This man is born to rewrite history. And he has written a draft version already. We are just fortunate to watch it go live. Chapter by chapter.
2. Devil is in the details
The net addition of Rs.500 and Rs.1, 000 notes in 2014-15 accounted for over 86% of all notes added. This was a serious menace to the economy.
By eliminating high denomination, high value notes we would make life harder for those pursuing tax evasion, financial crime, terrorist finance and corruption
It is not just tonight’s announcement that was brilliant.
What’s mind bogglingly brilliant is the 2 year planning behind this.
- Within days of coming to power, set up enquiry on Black Money.
- Announce “Jan Dhan Yojna” so that the crores of poor and farmers can have their money stashed in Bank accounts. 200 million accounts were opened
- Announce Voluntary Declaration of black money for period of 1 year.
- Get back thousands of crores of black money from India and abroad.
- Mandating jewelers to demand PAN cards for sale of Gold and jewelry.
- Force all Banks to invest in Digital Banking and expansion to rural areas.
- Promote digital India, digital currency, and digital transactions.
- Close all “respectable” submission routes by today’s surgical announcement.
It is not a child’s play to retire two biggest currency notes within hours. It is the planning of 2 years that does not make it look immature.
And that’s what is brilliant.
3. Change can sometimes catch you unawares
Nobody saw it coming; or was prepared; or had even any idea of its happening.
The 8 pm announcement meant no possibility to make last moment transaction at jewelers shop. The punters, betting thousands of crores on the US elections results, were caught unawares. The results would have started pouring in past midnight; that when all currency notes would be worthless.
Now when you go to deposit this cash into the bank, I-T Dept will keep record of deposits over Rs 2 lakh. Accordingly, the department will impose penalty, which could be between 30% and 120%
So, what they can do with the heaps of cash is :
1) Burn it to warm themselves for the coming winter.
2) Pay taxes, interest and penalties and save as much of the cash heap as
3) Find hundreds and thousands of people to deposit in banks in small sums to save as much cash as possible
4. Law of Karma- The transient nature of ‘Fakes’
In our life, we often see fake people ruling the roost. In each organization, there exists this smiling devil who has won people’s hearts through his/her sugar coated talks. The temporary surge in his/her popularity often leads the genuine people to question their belief system. But the Law of Karma does play its role and leads to reversal of fortunes.
It has long been alleged that terrorists and drug cartels from neighboring countries have been supplying high-value fake currencies into India. When these fake people now go to the Bank to exchange the Rs. 500 / 1,000 note, they will be asked for identity / PAN / source of Income.
In a single stroke, all the fake wealth has been reduced to pieces of paper
Let us test ourselves
- Do we have authentic notes or fakes ones – of success, relations, happiness, and even good deeds?
- Is our life itself authentic or are we living a fake life in a fake world?
5. Small is Big
The person with two 100 rupee notes is today richer that the person with a thousand 500 rupee notes!
In an organizational setting, on always tends to focus on the “Big Bang’ HR events – off-site events, conferences, training sessions, large cheques for variable pay
However, the real gems are the small, quiet, hidden, acts that HR does on a day-to-day basis, those little e-mail appreciations, those pat on the back, those cake cutting ceremony, those birthday cards.
This is so relevant from an Employee Engagement standpoint
With a single stroke, we have decimated or at least made life quite turbulent for those who have untaxed cash income, those who smuggle fake Pakistan-printed currencies from ,say, Malda border, political parties who have truck-loads of cash in secure vaults and Jihadis who transact primarily in cash.
It is a brilliant move. A strategy that will go down the annals of history as something remarkable, strategies that will be documented in Harvard Business School case