Demonetization in India: The unsuccessful story, a big failure in all aspects!

 The pro-Hindu current government of India has been making haphazard unfruitful rules since its coming to power in 2014. Demonetization in 2016 was one of those and as the government celebrates it as a success story, let us do a dissection of the whole matter! 

Demonetization and the real facts

On 8 November 2016, the Indian government at that time in power announced demonetization of its Rs. 500 and Rs. 1000 currency notes. It gave several reasons for it but none of them turned out to be true. The outcome was more of a disaster than any benefits to its citizens. Yes, it made the poor and people stand in queues and suffer for many days. It led to harassment of people and postponement of marriages. Many people died standing in lines to exchange the currencies. But the rich managed to do so from the comforts of their homes. And now on the fourth anniversary of demonetization, the Indian PM states that it helped to curb black money. This is a blatant lie. He believes that he can get away with such a big lie! 

Demonetization India November 2016 was a big failure! [Source: Inc24]

But the government and its head could not show any link of demonetization with curbing of black money in India. It is similar to saying that he inaugurated an incompletely built flyover in India and it has curbed the black money in India. But the fact is that the claim itself is false and hence no link can be shown of demonetization and curbing of black money (which has not happened). 

Where is the black money? 

Time and again, history has shown that demonetization does not help in curbing black money. Most of the black money if any is in the form of gold or property and demonetization will not remove it. But for that one has to be a good economist like Manmohan Singh or a good politician to know these basic things. One cannot know it if one is there to settle a score with someone and wants to erase history and not acknowledge the good parts that any other culture has given them. 

Poor were made to stand in queues to get money exchanged and many people died due to it [Source: IE] 

The truth is that 99.3% of the demonetized notes that were supposed to be in the circulation have come back. This excludes the Indian currencies still lying in the banks of Nepal and Bhutan where Indian currency was legally used before the demonetization. This itself reveals that the whole drama was a big failure. The government and its leader were so overconfident of their success that they went on propagating another theory that they would distribute amongst the poor the 3-4 lakh crores of money that would put as 'black money'. They said that this amount will not come back and will be the saving for the government!!! 15 lakhs in each person's accounts was the slogan!!! Where are the 15 lakhs? 

The poor suffered due to poor economic insight of the government

The whole revenging and unthought-of drama was an experiment based on ignorance. It deeply affected the poor people and the informal sector of India. This included agriculture which has 85% of the country's employment and contributes to 45% of its GDP.  But Modi is like Donald Trump. He will not accept defeat even if it is glaringly seen in front of it. Therefore, he is repeatedly saying the same thing over and over again that demonetization is a success. But he should know that repeating a lie does not make it a truth! Cash transactions are not less than before because digital transactions need the money and informal sector works on a smaller margin. 

It was a case of utter disregard of the poor, the informal sector, and economics [Source: Sabrang India]

Modi and his team are talking about the formalization of the informal sector. But this itself is a problem rather than an achievement that they should be proud of. Because it will only lead to more unemployment. That formalization will lead to curbing black money is also an unsubstantiated claim based on ignorance of economics. Hence Congress has always tried to preserve the informal sector while this government is ready to wipe it out!!! The GST and new agriculture bills are all moves in this direction. The government has set off on a wrong track created by whatever bad and negative emotions they may have. But it is definitely not based on sound economics. It will be in the interest of the country if they learn to accept defeat gracefully and look back at the map and find the right track again. If they are not able to, better that they leave the place for another efficient person or party to clear up the mess they created and turn it into good for the country!!! 

Source: The Leaflet