On 8 November, 2016 Prime Minister Narendra Modi had declared all Rs 500 and Rs 1,000 notes illegal and the decision evoked contradictory reactions from the public as well as experts. While some decried the move and called it a 'failure', others lauded the government for its efforts to fight against black money. One year on, the verdict is still divided.
Despite the government's efforts to list out the benefits of the note ban and make it acceptable to everyone, people are still questioning the success of the move. From using facts and numbers to highlighting the plight of the poor, opinion pieces and editorials are still using every way to argue for or against the decision.
On its first anniversary, the media is extensively covering the demonetisation move and reviving the debate about its efficacy.
An opinion piece in The Indian Express by Pratap Bhanu Mehta calls it a "revolution in bad faith". He writes that demonetisation "was a populist measure, done in the name of the poor. But like many revolutions done in the name of the poor, it hurt them by extracting the highest price from them".
He further said that demonetisation created fantasies of a cashless economy. "Digital payments are up somewhat, but cash is back with a vengeance." He also attacks the move for reducing the growth rate. "But in the short run, it dented growth perhaps by as much as two percentage points. The human cost of a two percentage point slowdown in GDP growth is high."
Similarly Ajaz Ashraf wrote for Scroll saying, "in India's cash-driven economy, note ban cure was worse than the disease. Ashraf wrote that India's informal credit system remains disrupted because Modi invalidated 86 percent of notes in circulation.
This has resulted in a scarcity of working capital, a situation that has been compounded by the introduction of Goods and Services Tax, he wrote. Ashraf further talked about a fear among the public, saying that demonetisation has also unleashed a sense of anxiety. "A government that can suck 86 percent of currency out of the system overnight is capable of worse, business people say."
Arun Kumar wrote for The Wire that while the negative impact of demonetisation can still be felt, the gains have been minor and could have been achieved even without the disruptive move. He further said that rate of growth of the white economy plunged due to the impact of a cash shortage in the unorganised sectors. "The organised sectors also suffered, but less so because they can and do transact via cheques and electronically."
On the other hand, Nandan Nilekani called it a defining moment in country's journey to a less cash economy. Writing for Hindustan Times, he said "in the case of digital payments, India knew the problem and for once was ahead of the world in designing a solution.
Writing for The Indian Express, NK Singh also lauded the move and said that by unearthing black money, demonetisation has widened the government's revenue base. "Broadening the tax base by mounting a fight on black money is, therefore, both pro-growth and pro-poor," he wrote.
Updated Date: Nov 08, 2017 23:35 PM