demonetisation results

Post RBI declaration of demonetisation data bhakts will make Prime minister's position further untenable like the narrative of " the struggle of soldier standing at border" cooked up during demonetisation period :-)

Fact is many avoidable tall claims by the government, economic under secretary (not even RBI which is responsible for Cash matters) such as terror funding, black money and bringing corrupt to booking and worst the rich will lose their cash made the situation worst for the government. Don't blame anyone else. The whole narratives are still out there in the web before bakhts wants us to blink.

RBI says it is 99% and still many notes are to be counted, and the chances are that the percentage might go up.
Even as we admit the 1% of cash, roughly translated by RBI at 16 thousand crores of un-returned money post demonetisation at the cost of 21 thousand crore printing cost of new currency does not in any manner becomes a consolation for the government for the mere reason 1% cash evaporation is also an equivalent melt down in economy! This is basic economics.

The fault number two of demonetisation lies in the fact that it was projected as an attempt to curb the higher denomination notes of Rs. 500 and Rs. 1000. But with the remonetisation of market with Rs.500 and Rs.2000/- situation has become worse with Rs. 2000/- becoming the biggest circulation!.

Considering according to government's own sources 74% market is remonetized with hard currency, the next big claim of digitisation has become another faulty claim. statistics shows the digital transactions have come down during the last quarter of the demonetisation period.

Tax base widening also has no connection as the government's own statistics shows the tax collection/base increased during the voluntary declaration time and the post demonetisation increase in tax base still remain at 24- 25% the percentage increase during the previous two years.

The list of economic parameters and data refuting the tall claims will go on. But the big question is the prime minister although can not escape the blame, but considering he is not an economist and RBI as a constitutional authority of cash economy did not advise him appropriately and failed the nation should not be allowed to go without action.

The loss of 1.5 million jobs, 150 and odd deaths, as of now without any evidence of recovery of black money, enforced slowing down of economy, increase of budgetary deficit, resource crunch and the monumental suffering to people of the country for an extended period is not something RBI can hogwash. The governor must be made to answer the nation.
Neeti ayog chief of the period any way has escaped before the result came.

5.7% decline of growth rate should not entirely be clubbed to demonetisation as it has a lot to do with the GST implementation, the unification of cash economy along with political unification, a long time need of the country. Also the decline is also a reflection of global economic situation.

But certainly this should be a wake up call for Mr. Modi about the importance of independence of constitutional institutions in India like the erstwhile planning commission and the RBI in their role to interrupt government process to remind the larger consequences of an action of political expediency.

If the planning commission was in position, RBI governor was independent this demonetisation would not have taken place at all and this crisis.

The worst is yet to come in economy. The complex chain reactions only have began. From unemployment to farm and industrial production mismatch is going to be the next big worry. Also considering the projected telecom industry melt down is not any more only a skepticism but a potential danger, the days ahead does not promise anything rosy for this government. Historically in every economy it is seen the governments under such circumstance assert its position by the use of law enforcement agencies like police and income tax to confirm its position and history also tells us the serious consequences of such acts of desperation accentuating the crisis.

Better this government set its record correct than allowing its fake news agencies to make its position further vulnerable. Accept the demonetisation did not achieve its objectives and move on.