Second anniversary of demonetization

When the Prime Minister told a stunned nation two years ago on November 8, that promissory notes of Rs. 500 and Rs. 1000 had been demonetized and that these had ceased to be legal tenders, he enumerated a number of benefits which he claimed would flow from this decision. One was stopping terror funding. It is a tragic irony that on the second anniversary of that fateful day, the Maoists killed five CISF jawans in the Dantewada district of Chhattisgarh. Terror attacks on security forces also continue in Jammu and Kashmir. On the face of it, demonetization has failed to stop terror-funding.
Another avowed aim of demonetization was to stop stashing away of black money abroad. According to official figures released by the CBI in May this year, in the past one year remittances by Indians to foreign banks had almost doubled from $4.6 billion to $8.17 billion. To be sure, not all of this money is black. But the Government could not tell how much of it is legal and ‘white’ and how much is black. Another benefit the PM said would accrue from demonetization would be reducing, if not totally eliminating, hawala transactions. That has not happened. Demonetization was also supposed to unearth black money. It is now accepted on all hands that almost the entire number of notes demonetized has come back to the RBI, falsifying the claim of the PM.
What is obvious is the negative impact of demonetization which the Government is hard put to it deny. Demonetization along with the introduction of GST wrought havoc on the economy and on the lives of people. About 120 persons, mostly old and infirm, died while standing in queues before banks. Relatives could not pay for the treatment of their patients admitted in hospitals. Any number of marriages had to be cancelled because there was no cash to meet the expenses. But the worst hit were the medium and small enterprises. Starved of cash. many units in these two sectors had to close down, throwing tens of thousands of people out of job. Two years later, the Government is still unwilling to admit that demonetization was a great blunder, an unmitigated disaster. Top spokesmen of the party and the Government are still waxing eloquent on the supposed benefits of demonetization. The people will give their verdict in the general elections.

Saturday, 10 November, 2018