Prime Minister Narendra Modi’s 50-day deadline for demonetisation’s benefits to show has finally come to an end.
The hardships endured by common man after the note ban decision that was defended as an ‘essential step taken in national interest’ to fight black money and corruption, establishes the move as baseless. Even though one group justifies the government’s decision due to political reasons, those who backed the move initially have changed their stance after the consequences hit them hard. The PM had also said that he was ready to face the punishment the country decided for him if there were drawbacks in his decision after December 30. The only thing the nation can hope for is for the Prime Minister to realise how distant he was from the everyday reality of common man. He had appealed to the people to bear the pain only for 50 days after which the benefits of demonetisation would show. But the PM’s statement has been diluted right from the start. Those linked to Reserve Bank and the Centre admits that the crisis would persist at least until six months. Having to spend 3 lakh crore to expose one lakh crore of illegal money constitutes only a minute portion of the hardships faced by the entire nation. The analysis that the Centre has accomplished something which even the foes are incapable of doing, of turning India’s vibrant economy into stagnant one, is therefore relevant. While the trade system froze, the cash crunch has affected the spending of common man leading to stagnancy in every sector.
Household consumption alone comes to 60 per cent of the total GDP for the last few years. Given that the value of cash in the form of notes and coins in circulation comes to nearly 12 per cent of the country’s economy, the cash crunch has further worsened the crisis. It would certainly continue for the next six months. The growth of GDP is also predicted to come down by the second half of 2017. All trade sectors have been hit hard and employment opportunities have declined. Income scales have also hit a low. A loss of 1.5 lakh crore was estimated in the sale of consumer products alone. The tax revenue of the states would diminish and welfare and development activities would freeze. The common man particularly the poor are those who would suffer more. Those who backed Modi’s decision initially questioning the move also reinforce the doubts.
The credibility loss for the government is much bigger than the financial loss. The trust in Reserve Bank has also declined steeply. The Reserve Bank orders have been amended over 60 times in 1.5 months. The RBI has failed to keep its promises like cash availability and functioning of the ATMs maintaining a silence thereafter. It has not officially disclosed any estimates after December 13. Of the banned currency, 12.444 lakh crore was stated to have returned to the banks. The details of the new notes have not been revealed after November 19. It also refused to respond to RTI queries. According to the Centre, the secrecy of the operation was to uncover black money. But the logic behind not disclosing the details of the newly printed notes as well as the Minister level meetings is not comprehendible. The silence of those concerned causes panic. The Prime Minister and his government have lost their credibility through the demonetisation exercise. The reasons initially cited in defence of the decision were altered twice. The PM has turned a blind eye towards all the pain endured by the people. The common man had already concluded that the crisis wouldn’t end even after December 30. They have, through experience, realised that Prime Minister’s promise have also gone worthless just like the banned notes.