The Prime Minister’s speech was high on homilies and bluster, low on substance. It has failed to provide any relevant fact or data on the demonetisation exercise.
How much of the proscribed currency notes returned to the banking system by December 30? How much ‘black money’ and fake currency were unearthed since November 8? How many illicit cash hoarders and terrorists were caught? What gain has accrued to the exchequer and what have been the fiscal costs of the note ban? By when would the supply of new currency notes normalise and the limits on cash withdrawal removed? These questions remain unanswered.
The PM is silent on these because the answers will expose the entire demonetisation exercise as a policy fiasco, which has yielded peanuts in terms of recovered black money while inflicting heavy economic pain on the people through a policy-induced recession.
The continuance of cash withdrawal limits implies that the government and RBI are nowhere close to restoring normalcy in cash availability.
The PM’s assertion that lakhs of crores of cash being deposited to the banks itself marks a success of demonetisation is ridiculous, since deposits are banks’ liabilities on which they have to pay interest. His point about high cash use causing inflation and corruption is also baseless – countries like Japan and Hong Kong have much higher cash-GDP ratios than India’s, yet lower inflation and corruption.
Did 100-plus Indian citizens die in bank queues for interest subsidy on home loans and maternity benefits? This is nothing but a cruel joke on over a billion people, for which PM must be made to pay.
(The writer is a Left-economist)