A brief view on the timing of Demonetization!

With all the debacles on “Demonetization" going around, this is not to give any arguments for or against the issue. Few questions, on the larger context have been coming across my mind in the hope of finding some answers, would like share some below.

Was this the right time? - Given the much known agricultural statistics of 58% employment dependency, 17 % contribution to GDP, 10 % contribution to exports and fourth most exported commodity. Have we largely ignored this space in planning this move? With Kharif season ending, and farmers planning to sell their produce, after much awaited better monsoons which probably had risen their expectations of better income this time. Can we afford to go for a cashless economy, and push some more farmers to the suicides or in the vicious circle of poverty? Also, there is a little gap between harvesting in Kharif and sowing in Rabi- If we might be reaping the benefit of lower food inflation today , created due to shortage in money supply leading to decline in aggregate demand ; Can we continue to do so in the next harvest, given there is always a supply lag in agricultural commodities? In long run undoubtedly this move might pull down inflation, but in short run haven't we compromised the "Zero Day vulnerability" of this important segment?

Isn't RBI an autonomous body? - According to RBI Act, 1935( by which RBI is governed) - “The Central Government may from time to time give such directions to the Bank as it may, after consultation with the Governor of the Bank, consider necessary in the public interest,” , clearly stating that RBI is not a constitutionally autonomous body. Given the two bodies having similar objective of "Greater Good" but different (sometimes contradictory) instruments to attain it, with Government (Fiscal Policy) and RBI (Monetary Policy). Also, given the basic essence of the Constitution which has divided the powers of Judiciary, Executive and Legislature to encourage the system of checks and balances. Should we be worried about this increasing "coziness" between two bodies in present scenario, when the encroachment on one’s autonomy has already begun (which is also facilitated by the act)?

Can we afford to misunderstand working capital cash requirement, as a stock of Black Money? - To believe that black business is carried out with cash while normal business is carried out with cheques is a not correct. Because normal business also requires cash transactions. And if we demonetize a range of currency, we will also be disrupting this working capital cycle, which is an integral part of any small or large business. The working capital cycle (WCC) is the amount of time it takes to turn the net current assets and current liabilities into cash. Profit is calculated after simple adjustments made in assets & liabilities, and this profit is reinvested .The longer the cycle is, the longer a business is tying up capital in its working capital without earning a return on it. In light of persistent global slowdown ,fall in aggregate demand & investment and little success in "Make in India" campaign , can we afford to overlook the basic fundamentals on which these established business function ? According to the September data, IIP down only by 0.1% against 4% in previous year, Manufacturing up by 0.9%, and electricity production has also improved by 2.4%. If we fail to capitalize this opportunity, can it prove detrimental to the economy in times ahead? When experts have already speculated that Nomura current projection of growth which is 7.3 % in the December quarter, may actually be closer to 6.5 percent due to this unprecedented move.