There is no moral and ethical aspect to demonetisation

It needs to be debated primarily on its economic merits and consequences

As the Narendra Modi government marked a year since demonetisation, Finance Minister Arun Jaitley defended the decision as a step that was “morally and ethically correct” and hence, “politically correct”. Having said that, however, demonetisation was also an administrative decision, with stated aims and tangible goals, and large consequences. To argue now that it needs to be understood only, or primarily, in moral and ethical terms can be read as the government’s attempt to insulate it from evidence-based argument or questioning.

While announcing the decision to scrap ~500 and ~1,000 currency notes as legal tender overnight, PM Modi had given the reasons behind the move and spelt out its stated objectives. Terrorism, corruption and black money, he said at the time, were “festering sores, holding back India in the race towards development”. Currency notes of large denominations facilitated these transactions and demonetisation, he argued, would bring them to a close. In one stroke, the decision invalidated 86 per cent of the currency in circulation, severely stressing trade and business, especially small business. The government has since produced data to support its claims that demonetisation has been a success. It is only reasonable that the claims and counter-claims be vigorously debated so that the people can arrive at an informed view of the impact of this momentous decision, and moving on, the right lessons can be learnt from it. This calls, first of all, for a free and open public discussion.