RBI's note ban report: Who'll be accountable?

The numbers needn’t necessarily tell the whole story, but in case of the controversial demonetisation of Rs 1,000 and Rs 500 currency notes on November 8 last, the figures finally released by the Reserve Bank of India after nine months show that a mere Rs 16,000 crores was not returned. It was this that a prescient former PM Mannohan Singh called a “monumental disaster.” This Rs 16,000 crores could reflect unaccounted money and means that after nine months, the government produced a molehill. What’s more, half this measly Rs 16,000 crores was used to print new notes. Finance minister Arun Jaitley’s jubilation certainly indicates that he’s not on the same page as the RBI’s figures. Admittedly millions more were brought into the tax net, but surely there are several other ways like incentives that could have achieved this without putting crores of people to hardship for the sake of a few million tax evaders. Maybe on one of his overseas visits Mr Jaitley could get some new ideas of how to increase the tax base if he doesn’t have a think tank to do it for him in India. Digitisation too could have been achieved through incentives. As for capturing the black money monster, that’s more a pipedream as black money continues to be generated on a daily basis and there’s no visible effort to stop this. Demonetisation was obviously done in a hurry, without thought or preparation. It gives credence to allegations that it was a devious scheme executed hurriedly to deprive the Opposition parties of access to unaccounted election funds. It’s little wonder therefore that the BJP could make headway in the UP elections.

What’s more relevant is that the demonetisation exercise produced results that weren’t proportionate to the huge hardship caused to people. Around 78 per cent of all transactions in India are in cash. Rural families, mainly the farm workforce, suffered untold hardships as families were reduced to penury. They had to sell their produce at distress prices as traders had no cash to pay them. The rural economy is basically a cash economy. There were several deaths as patients were unable to pay cash for admission to hospitals for treatment, children were withdrawn from schools as parents couldn’t pay fees, and so on.

India was the laughing stock of the world as never before has a democratic country in the free world demonetised its currency in peacetime and under one of the most stable governments. The Zimbabwean government  had demonetised its dollar in 2015 in order to combat the country’s hyperinflation, recorded at 231,000,000 per cent. India was nowhere near hyperinflation of this magnitude. The monumental question is: Will those responsible for this disastrous decision be held accountable? Will they resign or at least admit their blunder?