Demonetization : A Saga of failures
In the evening of November 8, 2016, PM Modi in his address to the nation announced that currency notes of INR 500 & INR 1000 would cease to be a legal tender from that midnight. This announcement started a disastrous saga which has kept the country on tenterhooks till date.
In almost an hour long speech that evening, PM Modi claimed that the demonetization process was a revolutionary one which would help not only in curbing black money but also in eradicating counterfeit currency. He further claimed that demonetization would prove to be a fatal blow on the funding network of terrorism and Naxalism. The above reasons were stated to be the positive aspects of demonetization.
There was absolutely no preparation of any concerned authority before launching such a drastic move that shook the Indian economy. In the words of former PM and renowned economist Dr. Manmohan Singh, the entire exercise was a “monumental mismanagement”. Banks didn’t had enough cash to exchange old currency notes. ATM’s were not calibrated so that new currency notes be transacted. Each day a new regulation was formulated. Long queues were seen day in and day out outside banks and ATM’s for currency exchange. Everyone was clueless and economic activities on almost all fronts came to a standstill. Though bank authorities tried their level best to meet the demands of citizens but the miserable failure of the higher regulating authorities resulted in utter economic chaos.
Outcome of demonetization:
The immediate outcome of demonetization was not only harsh but also ruthless. More than a 100 people died waiting for their turn in long queues to exchange old currency notes. The loss of lives is greater than any benefit that we would ever achieve through demonetization. Whenever we hear Mr Modi or his colleagues explaining it as a process beneficial in long run we must remember words of Mr. John Keynes ” In long run we all are dead”.
The unorganized sector was hit the worst. Millions of people were left unemployed. Real estate and construction sectors came to a halt. Many small scale industries were ruined. GDP and growth rate data of last quarter of 2016-17 and first quarter of 2017- 18 reveals the dark truths of demonetization. Not only the idea to implement demonetization was absurd but also the timing. It coincided with the harvesting of the Rabi crops and sowing of the Kharif crops. The agrarian sector was dealt a death blow as despite a good monsoon and better crop yield than the previous year, farmers were forced to dump their products on roads as waste products as they were not paid due to a paucity of liquidity. The suicide rate of farmers in the Marathwada of Maharashtra region is at a all time high and this is being attributed to demonetization.
In a discussion in the Upper house of the Parliament, the former PM Dr. Manmohan Singh dubbed the demonetization process an ” organized loot and legalized plunder” . Not only Dr. Singh but every renowned economist warned the government of the adverse consequences but to no avail. PM in reply to Dr Singh’s statement merely took unwarranted jibes in poor taste as he claimed that Dr. Singh was ” bathing in the bathroom while wearing a raincoat”. In yet another public address in Japan he sarcastically said ” There’s marriage in the house and demonetization has crashed their dreams”. Mr. Modi’s replies to former PM or the apparent sadistic pleasure relished while he was referring to the ‘marriage in the house’ joke in Japan are unbecoming of a PM in a mature democracy . In another rally he melodramatically said “Burn me alive, if the problem continues after 50 days”.
His often used phrases of “” Burn me alive”, ” Hang me in public” which neither represents Indian culture nor Hindu culture of which he claims to be a poster boy . His words only represents the right-wing extremist culture which believes in violence, dominance and working with a single goal to convert India into Hindu Taliban.
The present scenario:
The data released by the RBI states that around 99% of the demonetized notes have returned to banks and the entire brouhaha of curbing black money, removing counterfeit currency and fight against terrorism or Naxalism has been debunked. What actually proved to be worse is that a businessman from Gujarat Mahesh Shah who was closely associated with the BJP came forward to surrender 13000 crores of black money but no one knows what action was taken or how much penalty was paid. Another BJP leader from Bengal was caught printing fake currency notes of new denominations. Our jawans are continue to sacrifice their lives. The only benefit might be that demonetization led the BJP to a landslide victory in U.P. But this is a Pyrrhic victory as it has completely ruined the economy and the adverse effects are expected to continue for a long time to come!