Many are the tragic dates in the seventy-year history of India, but there is just one day people remember with a shudder as the outcome of an administrative action: 8 November of last year when Prime Minister Narendra Modi declared the currencies in denominations of rupees 500 and 1000, that come up to about 86 per cent of the total currency, invalid.
It is not only that the stroke of reform, taken without sufficient preparation and which took the world by surprise, sent the country's economy into utter chaos, but also that the nation has till date not been able to come out of its impact. The PM then had, in an apparent attempt to strike an emotional chord with the people, raised themes such as uprooting black money, plugging the sources of extremists, catching tax-evaders red-handed for which some amount of sacrifice was needed from the citizens. But he never tried to answer the questions raised or address the concerns expressed, by economists or political leadership. Not stopping there, his attempt all through was to brand anyone who questioned 'demonetisation' as anti-national. The country is yet to forget the nightmarish vision of people who for three to four months queued up before banks and ATM's in cities and villages alike.
Those who lost their lives by standing in queues under the hot sun, number over a hundred, in addition to a dozen people who died out of the agony of being unable to exchange their tender. There was no redeeming act of relief for the common man who had to struggle for survival in the highway of life. Although the amount that could be withdrawn from banks or ATM's kept constantly changing, the sum total of currency handed turned out to be a meagre amount. And finally, the concerns aired about the security of the newly introduced 2,000 rupee-notes was also proved by the fake 2000-rupee currencies which surfaced before long.
Currency notes have been made invalid in the country earlier as well. It is less likely that anybody would argue against such a move. The Morarji Desai government had withdrawn the currencies in denominations of Rs 1, 000, Rs 5, 000 and Rs 10, 000 to curb the bad influence of black money on national politics. The reform that was implemented with a clear goal was later seen widely as having achieved it to a great extent. However, the inane decision introduced by Prime Minister Modi and Finance Minister Arun Jaitley without even consulting the Governor of the Reserve Bank of India went off track right from the start. As a result, the ‘goalpost’ had to be shifted several times.
It was the same Prime Minister who declared that eradication of black money was the key goal, that later bragged about a ‘cashless economy’. But the highest number of clashes and casualties of recent past occurred in the same month in which it was claimed that peace has been restored at the border with the financial sources of the extremists sealed. The demonetisation process and the subsequent measures were carried out with the least amount of transparency. The government began to see the people with money in their hands as thieves and as people with illegal wealth. This triggered apprehension and panic among the citizens which in turn aggravated the numbness that has gripped the economy. With the cash crunch faced by the deteriorating commercial and industrial sector during the first six months of demonetisation impacting all other sectors, the nation had to witness the biggest drop in growth rate in the recent past.
As demonetisation completes a year, there are certain undeniable truths that are displayed before the nation by any balance sheet prepared. Demonetisation and the Goods and Services Tax (GST), the two reforms brought in by the NDA government in the economic sector have pulled the Indian economy back by a decade. The official claim that about 99 per cent of the notes have been returned to the banks is a clear testimony of the fact that what was intended could not be achieved. So then didn’t black money exist here? Most experts had reminded then that all such money was in foreign banks or investments abroad rather than in the form of black money in India. Obviously, Modi was taking aim in the dark. In short, like any other autocrat, Modi’s sole aim was to establish his infallibility. The nation had to pay a heavy price for that. What former Prime Minister Dr Manmohan Singh said is true: that the demonetisation move was a historic blunder. Indians would not surely forget November 8 so soon.