Utterances by politicians – and economists - on the second ‘death anniversary’ of the Rs. 1000 note have been on predictable lines. Depending on which side of the political divide they are, these wise heads have either been heaping praise on the Modi government for this ‘bold’ move that allegedly marked a ‘turning point’ in the Indian economy or condemning it as an unmitigated disaster that caused lasting damage to the economy.
The Congress termed it a ‘black day’ while Finance minister Arun Jaitley expectedly defended demonetization, saying it was ‘a key step in a chain of decisions taken by the government to formalize the economy.” Writing in the Firstpost, columnist S Muralidharan actually called for ‘another round of demonetization to weed out black money’ (as if one was not bad enough!) and ‘dismantling’ of all ATMs because ‘they beckon cash guzzlers by their sheer existence’. On the other side of the ideological spectrum, noted economist Arun Kumar, the Malcolm Adisesiah Chair Professor at the Institute of Social Sciences who has authored a book on the subject, described it a ‘nightmare etched in our memory’.
But to find out whether DeMo was good for the people or bad, we need not listen to the wise men, who pontificate on the economy from the air conditioned comfort of their workplaces. We need to listen instead to the man on the streets – the neighbourhood grocer, the friendly vegetable seller, the maid servant at home and so on. They may be innocent of the ways of the economy, oblivious of economic jargons and ill-equipped to understand the political and ideological moorings of the utterances of those speaking on the issue. But they must have the last say on it because they are the people, who bore the brunt of the move towards a ‘less-cash’ economy and have undergone untold miseries since Prime Minister Narendra Modi dropped the bombshell on an unsuspecting nation on a cold winter evening exactly two years ago.
Ask them if their sacrifices – the endless wait (and even deaths) in queues outside banks or ATMs, the loss of income and employment, the difficulties in switching over to cashless transactions all of a sudden – have been worth it. Chances are you will get to hear a mouthful against the move – with a few expletives thrown in for good measure! I doubt if any common man would find any redeeming feature in the decision, dubbed ‘a surgical strike on black money’ by BJP spin doctors.
Apologists of DeMo may argue that the views of these economic ‘illiterates’ (which, by the way, includes this columnist!) are immaterial and must be dismissed outright since they don’t have the intellectual depth to understand the nuances of economic policy. My simple riposte to this argument is: how can something be good for the economy if it is not good for the vast majority of people? Granted, running an economy as large as India does call for some tough decisions that may affect the people adversely for a brief period - say during a war or an economic depression of the kind seen in 2008. But contrary to the promise made by the PM while announcing the decision, the hardships faced by the people have been anything but brief. The GDP may have been on an upward curve after dipping for two consecutive post-DeMo quarters. But for the vast majority of people, its adverse effects are still being felt two years down the line.
Reluctance to accept non-cash payments remains as strong as it was in November, 2016; black money continues to thrive just as it did two years ago and terrorism has not shown the slightest hint of coming down. Clearly acting after a nod from the Finance ministry, the Central Board of Direct Taxes (CBDT) has timed to perfection the revelation that the number of income tax payers has risen from 3.31 crore in 2013-2014 to 5.44 crore in 2017-18 to coincide with two years of demonetization. But the question is: how does that prove that demonetization has been a success? How can we be sure that the rise was entirely due to DeMo and not some other factors? Does it prove that the rise would not have taken place had it not been demonetization?
Politicians and economists can quarrel on the ‘benefits’ of demonetization - or the lack thereof – till the cows come home. But there is little doubt that the Common Man has given a resounding Thumbs Down to the move.
(DISCLAIMER: This is an opinion piece. The views expressed are author’s own and have nothing to do with OTV’s charter or views. OTV does not assume any responsibility or liability for the same)