Demonetization - Some final views

 

Old Demonetized currency

 

With 5 years anniversary of Demonetization, i don't think i have anything more to add to my longstanding criticism of this foolhardy, extremely reckless and destructive economic decision. Demonetization was a self imposed bankruptcy of country by extinguishing 86% of its currency overnight in a national economy where more than 90% of financial transactions are in hard cash currency. Book by Yashwant Sinha has documented the collapse of the economy by severe shock therapy of Demonetization. You can read in it how Demonetization destroyed the economy, its various sectors, destroyed the livelihood of people, the businesses, the industry, damaged the organized sector and well as unorganized sector of economy. 

 

The damage to the economy started from the bottom at small scale enterprises, agriculture sector, MSMEs, self employed daily wage workers and within a year, the damage reached to the organized core sector of economy like Corporate, Banking, Auto, Real estate, service sector, FMCG, Retail etc. The collapse of demand started from the bottom and impacted everywhere else in economy. Yashwant Sinha called it - "Death of Demand".  I don't need to repeat on how stated goals of Demonetization proved out to be complete lies and falsehoods and goal posts kept changing every day. That's all water under the bridge now.

But i wanna talk about how Demonetization changed my view of our government. There are some things in life that can be best understood by experiences. I never had experienced and personally witnessed a govt policy of such callous, destructive, purposeless and gravely foolish nature in my life. Many people have attributed various reasons for Demonetization. They have said that regime was cunning & played great politics by fooling people in name of black money. People have said that regime politicians made a lot of money themselves while promoting their image as bold & courageous national leaders. 

 

I know how Modi brandished his grandiosity during Demonetization. I know that regime politicians made hundreds and thousands of crores during demonetization. The filling of coffers of cooperative banks connected to Amit Shah. But can you destroy a national economy of 145 Lakh crore GDP just for your publicity, petty political and monetary gains? What is the rationalistic view of setting entire economy on fire for such small gains? Various estimates have put figures on economic loss from Demonetization in lakhs of crores (read 1, 2, 3), and the money regime politicians made through Demonetization scam was just like a drop in a ocean. This is like setting a shopping mall on fire just to steal a candy or a case of Beer. Or shooting a man just to steal his pencil. Modi regime took the national economy to the brink of collapse without any purpose even from their own instrumental view, you can forget about the nation.

Arun Shourie described Modi regime's policy in sarcastic way. He said that this regime governs country by revelations. They get a policy revelation in middle of the night and they have a strong impulse to embark on it. Putting this in perspective, regime's policies are creation from malevolent personalities of its leaders. An extreme case of 'Inadequately motivated antisocial behavior'. Arun Shourie described Modi as Dark Triad personality - combination of traits of Narcissism, Machiavellianism and Psychopathy. Demonetization was a policy based on whim, impulsivity, reckless abandon, callousness and grandiosity. A policy that completely disregarded economic wisdom, socioeconomic realities, human tragedy, practicalities and principles of governance. 

 

But there is a broader pattern to regime's policies - they make these policies that put population through immense suffering, death and misery. You can see their policies on Pandemic, on migrant crisis, on Kashmir, on new citizenship laws etc. People try to attribute various motives & goals to regime's policy. I don't. Surely, i can see a consistency in regime's policy in giving favors to their favorite Oligarchs. But apart from that, there is not really any specific ideological motivation and goals of regime policies from any viewpoint, from theirs as well as from country's interests.

In conclusion, i remember one of the interviews of Nidhi Razdan with Arun Shourie. Shourie explained the lunacy of Demonetization and how all its stated goals were meaningless and nonsensical. Nidhi asked Shourie - (given that all official policy goals were nonsensical) Govt must have had a purpose for the policy? To which Shourie replied - "Never think that of the govt."