Demonetisation - The End
Almost 7 years later after the historic decision on Demonetisation was taken the Supreme Court finally ruled by a 4-1 majority that they have no say in the matter. The dissenting judge was of the opinion that it should have been a law passed by parliament rather than the way it was done. Lest I be hauled up for contempt of court, the ONLY comment I make is - next time India decides to wage a war or some such thing maybe we debate that in parliament first or if the cops want to raid a place where terrorists are hiding they need to give advance notice like a tender or something.
Anyway, that aside, this is NOT about discussing the merits or demerits of the decision, the usefulness or otherwise but some thoughts on the event.
This is a telling comment on the end result in spite of the fact that the UPI transactions have soared to a high where it is reported that 86% of the GDP was by such transactions. The expectations that cash handling would reduce is incorrect but increased online transactions also augurs well even if there is a certain contradiction in this.
Whether black money has reduced is anybody's guess.
The oft debated and gleefully pointed argument is that - Demonetisation was a failure and the only thing it did was inconvenience people especially the poor. In the absence of concrete data or a white paper from the Govt this debate will continue and those who opposed Demonetisation will prevail in their arguments. The common folks have no access to information to judge this event in the larger framework. The only arguments are more empirical logic.
Soon after the event the UP state elections were held and the BJP Govt of the day won this by a thumping majority and then followed that victory with a equally thumping win 5 years later. The BJP Govt also won the 2019 Lok Sabha elections with a significant majority. They have also won many other elections and yes also lost some. From 6 states in 2014 the BJP is now in power in about 14 states so the majority voters especially the poor have not exactly been upset. For those who wish to argue this logic - Democracy is a flawed system where majority wins and if that is a uncomfortable aspect, there is nothing to debate.
Be that as it may, with no clearly tangible evidence on the benefits or imperatives that led to that decision in 2016, the only thing one can do is speculate if the decision had a compelling logic.
For long one argument that has been least debated if not totally ignored is the one about fake currency and economic terrorism. There have been enough and more reports about the issue where not just fake currency but also how the suppliers to India and Pakistan were common, how the currency printing capacity of Pakistan was higher than India, how RBI activities were affected due to this etc. Here are some reports on the issue.
Even a media that is openly vituperative against the current Govt confirms this even though it is more to say that it still continues.
Even a hostile opposition member had to accept this issue even while criticising the Govt on the decision.
Even before the 2014 elections the security agencies had flagged this issue.
For those who want to read more about the subject as published by RBI itself, you can check this out.
For those living in denial that this fake currency funds the terrorism in Kashmir and elsewhere this report should give an idea of how the terrorists had to turn to bank robberies to get funds.
The extent of fake currency while being significantly high, but when viewed from the larger perspective of the GDP looks small.
One of the few media reports that discussed this subject was actually European based in Netherlands.
However a more recent report belies the above arguments I have shared. Talking to a temple manager this week, he bemoaned the fact that a lot of fake currency finds its way into the temple till from unsuspecting devotees.
What I refuse to accept as an argument is that this was some shoot from the hip after inhaling some potent stuff decision of the PM. If anything, however much one may disagree or dislike him, he can never be accused of knee jerk decision making. Anybody who has spoken to anybody who have dealt with him or followed various decisions over the last 20 years, if anything, his decisions are always measured, well thought out and deliberately planned with a clear objective. Risks are taken, yes, and some decisions can go wrong, but a decision taken on a whim? No way. So the question that still begs to be answered is - what was the rationale ?
I have always advocated that the Govt must come out with a white paper on the subject and tell the public the various imperatives involved. Some things cannot be shared for fear of disclosing the hidden intelligence assets but surely enough can be said to explain? The jury is still out on this.
But then who knows the courts may then say - yeh dil maangey more. Better to let the buried stay buried, maybe.
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