It is generally accepted that the demonetisation ~ or is it better called remonetisation? ~ exercise in India since 8 November last year is a unique exercise in the amount of cash abrogated, but that has not prevented irrational criticism from the very first day, along with the customary abusive language from political leaders inveterately opposed to the Prime Minister. Prudence would suggest that in a first-time-ever project, sufficient time should be given to make an objective judgment about its merits and demerits, but restraint and objectivity are not in the make-up of such critics.
The critics include a regiment of local economists, most of whom should have retired their tongues and pens long ago, and some from abroad, most of whom turn out to be 'the usual suspects’ of Indian origin with a  blatant prejudice when it comes to the present government. Economists have a bad reputation and worse track record; reference the Asian financial crisis, the US-inspired financial crisis following 2008, and the doomsaying pundits before the Brexit vote. There is scope in this cacophony for a non-economist, non-political scientist and non-politician, without any axe to grind, to express a viewpoint. 

Politicians should realise that a new age has dawned, with intense dislike of the establishment, cronyism and political circles. The public are immensely glad when political parties suffer from lack of money, legal or illegal. They are delighted that criminals identified with the political class are identified and brought to book. This is a fundamental truth and accounts for why there have been no ‘riots’ as a hyperbolic and theatrical judge ludicrously forecast, and why people have patiently stood in queues to access their own money.

It is not only a question of the Indian’s noteworthy ability to endure and improvise; it is a latent sense of probity and morality, and retaliation against those who exploit the system. Any move to reduce corrupt practices, to make people accountable for the money they possess, and to pay the taxes due, is popular. The seizure of unaccounted  wealth in large quantities shortly after 8 November was as much a surprise for the extent of corruption involved, as for the ingenuity of the habitual law-breakers. The public would like nothing better than exemplary punishment to these criminals irrespective of the layers of immunity that prevail in India due to ‘connections’ and the slow legal process.
Some politicians, professing to be exercised about the effects of demonetisation on the poor and ‘common man’, should bear in mind that the poor are the first to want the tax avoiders penalised, and the first to avoid being poor. The ingenuity of the Indian, when canalised into productive modern methods will respond, whether it is for bank accounts or digital transactions. Those who criticise such developments are retrograde, risk-averse, and proof of why India has not advanced faster than it should have. They live in a parallel universe.

These critical circles would evidently have preferred the Prime Minister to give notice of his intentions so that tax avoiders could have adequate time to conceal their illegal assets domestically or abroad. Repeated notices and changes of bank and ATM rules have been criticized, though these were necessary to calibrate needs with currency supply and keep pace with the machinations of crooks. If the current daily Rs 10,000 ATM transaction and a cash limit of Rs 24,000 per week from savings and Rs one lakh from current accounts is not enough, what figure is sufficient for the poor? How else to incentivize the  non-digital to adopt better methods? Can anyone deny that a less-cash society is worth striving for?

Many in the media still dwell on queues at ATMs and banks though these have largely disappeared, and sympathize with NRIs queueing at RBI offices to exchange the defunct notes for new. The media should relevantly enquire how these NRIs came to have such enormous caches of notes when the maximum one can take out of, or bring into, the country is Rs.25,000, and much lower in previous years.

It is rhetorically asked by critical politicians why the business class does not speak against demonetisation, the implication being that they are cowed into silence by the government. It is more likely that they welcome greater transparency and steps towards better governance. Why do so many of the media supinely echo the absurdities of some political leaders? Are they cowed into submission?

An opponent of the Prime Minister, who mocked his days as a tea-seller, claims that he is all talk and no action. This person is a parallel universe; to most of the public, the Prime Minister is a person capable of the bold decision when he believes it serves the nation, and has taken a calculated political risk. Both time and elections will show whether he has succeeded. Further economic reforms, apart from the GST, will have to be taken to eliminate tax dodging and corruption to the extent possible. No one expects the Opposition parties and luddite media to support him in this enterprise.

Opposition parties absurdly wanted Parliament to mourn the deaths of persons in queues. Were the deaths caused for reasons unrelated to queuing?  Some persons have to walk several miles to a bank; what did they do before demonetisation? The producer of the film, Rock On 2 bewailed the fall in receipts due to absence of currency notes, but Dangal grossed more than any other film in history during the same period. A parallel universe again? There is no interruption in the supply chain of perishables, manufacturing figures went up in November, tax receipts are up, retail indices are down, the stock market has not fallen, the rupee rate has held. The number of bank accounts has risen sharply, and the money in them. There is much talk of GDP rates from those who have no idea what this implies. A rise in GDP does not equal reduction of poverty and a blip in GDP is not a tragedy. Our GDP growth is more than twice that of USA; is India the more prosperous country? Our growth rate was faster than China’s; are we a more robust economy?

Critics have seized on nearly all the now-banned currency notes re-entering the banking system. This is welcome: the money is now taxable and accountable through the KYC and Aadhar procedures. The same critics have lamented  the loss of the Reserve Bank’s independence. No central bank in the world is independent of the government and its mandate is generally limited to fixation of exchange and interest rates. Nowhere are central banks in charge of     economic policy.

The government has come into a great deal of money which provides a platform for tax exemptions and economic reforms, the tax-avoiders are at least temporarily at a serious disadvantage, so are politicians who used unaccounted money to buy crowds and influence elections, the number of citizens liable to tax will rise sharply, as will the persons using digital payments. By the end of this year, we shall be able to recite a longer list of benefits.