As per the latest figures released by RBI the GDP for the last quarter fell from 7.9 to 5.7 % as exactly predicted by former PM Dr Manmohan Singh even while he along with highly acclaimed economists had to face rhetoric of “Hard work Vs Harvard”. We spent 8000 crores to print new currency and got only 16000 crores in terms of no deposits. Besides this lost 35000 crores which RBI would have given as dividend to the central government. 104 People died in long queues. Unorganized Economy suffered as for many weeks, millions of small traders struggled to find working capital and many of them may have gone out of business permanently. RBI autonomy and credit ability took a down slide. Real Estate suffered as they could not pay wages to the laborers.
The claim that counterfeit currency would be exposed also fell flat as it’s less than 0.0007 percent of the cash taken in. It was told that demonetization would “break the back of terrorism” by cutting off sources of funding. Though the stone pelting in Kashmir stopped but still this has been among the bloodiest summers for Indian security forces in Kashmir.
Within days of the demonetization a dozen methods to launder piles of cash had been devised in connivance with few corrupt bank officials and the government was taken off guard and was forced to change policies every day to such an extent that there were around 50 rules were changed.
Out of 18 lakh people questioned by the tax officials almost 9 lakh have already replied and rest could be many big small business groups which may have deposited huge cash which was all accounted for and was legitimate money.
India’s government has learned no lessons from this disastrous move. In fact it need not learn any lessons as voters easily bought the idea and ensured success at the ballot box. Government misled people. No one knows the purpose, the objective. No one took responsibility. None knows whose decision it was. And we live in a democracy. In any other country, this would have been treated as treason and those responsible jailed for life. Under constant pressure by media and opposition parties the government kept on changing goal posts from eradication of black money, counterfeit currency and death blow to terrorism to cash less economy to less cash economy and now the latest master move is New India By 2022. The idea is being floated and tested to be sold. Wait and watch how many of us buy it