De­mon­eti­sa­tion, one year later. Suc­cess or fail­ure?

Mint Asia ST - - Money - MONIKA HALAN

Most peo­ple have a ‘where I was’ story about the night of 8 Novem­ber 2016. Some of us also have a story on ‘how much money I had’ on the night that Prime Min­is­ter Naren­dra Modi in­val­i­dated 86% of In­dian cur­rency. I was just drag­ging my­self back home af­ter my Iyen­gar yoga class (those who join the Be­gin­ners will iden­tify with my use of the word ‘drag­ging’), ready to eat some din­ner and col­lapse. But of course, the team and I were up un­til mid­night, re­port­ing and writ­ing on the big­gest news of a per­sonal fi­nance jour­nal­ist’s life­time. How much money did I have? I had three Rs500 notes that day. Hav­ing moved to cards and then dig­i­tal, I’d moved my house­hold staff to bank ac­counts and elec­tronic trans­fer of salaries some years back. Cash was needed for ev­ery­day buying of milk, bread, eggs, veg­eta­bles kind of stuff. The lo­cal Mother Dairy booth was ac­cept­ing old notes for fu­ture pur­chases, so I was spared the lines to de­posit my money. We all have our sto­ries of what hap­pened that night. This was mine.

Apart from the per­sonal shock to our money lives, Demo quickly be­came a huge po­lit­i­cal, so­cial and in­tel­lec­tual bat­tle. The bat­tle lines got drawn deep in the ground and your pro- or anti-modi stance de­cided where you stood on the Demo de­bate. I wrote a col­umn one day af­ter Demo in which I said that the step will raise the cost of black money, it will not elim­i­nate it. That it is one step in a larger plan to go af­ter cor­rup­tion. You can read it here: bit.ly/2mmdyez. How does it look a year later? Modi gave four rea­sons for Demo: to curb cor­rup­tion, black money, fake notes and ter­ror fi­nance.

To judge the suc­cess or fail­ure of Demo on these four met­rics is al­most im­pos­si­ble be­cause Demo was one of the sev­eral weapons the gov­ern­ment has de­ployed against these is­sues. But let me try and un­pack them.

Has there been a dent in cor­rup­tion and black money? Anec­do­tal sto­ries say that high-level cor­rup­tion in the cen­tral gov­ern­ment is gone, but the can­cer of graft else­where in the sys­tem still thrives. It is un­re­al­is­tic to ex­pect the deep­rooted habit of graft to dis­ap­pear overnight, but at least there is se­ri­ous po­lit­i­cal will be­hind the anti-cor­rup­tion war in In­dia to­day. What of black money, or money on which in­come tax has not been paid? Black money is back in the sys­tem—talk to any builder (real es­tate is the big­gest sump of black money and talk­ing to builders is a quick way to fig­ure out if cash deals are back) and they say it is as if Demo

PRADEEP GAUR/MINT

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