As per the data released by the Reserve Bank of India on Wednesday, about Rs 15.28 lakh crore worth of demonetised notes of Rs 500 and Rs 1,000 made its way back to them by way of deposits by public. Given that the total amount of currency taken out of circulation was Rs 15.44 lakh crore, it seems that about 99 per cent of the currency was returned after demonetisation on November 8 last year. One of the points raised during the exercise was eradication of black money. However, since most of the money has found its way back to the banks, we ask economists and prominent bankers if the exercise has been a success or a failure. Are there other aspects that have been brought on by demonetisation that can be used to call it a success?
‘Our leaders should think of long term benefits’
K.M Chaitanya, filmmaker
The irony is we are not even expecting demonetisation to be a success anymore. We just don’t want it to be a monumental failure. We are hoping someone in the government will be able to salvage it. And next time our leaders should think of long-term benefits of their actions instead of short-term hype. The irony is that the general public isn’t infuriated solely because of the demonetisation dud.
‘The idea of cashless transActions, internet banking gives more transparency’
Sri Krishna Charan, banker and team leader at HSBC
Despite the various concerns over the phenomenon, I’m actually for demonetisation — and always have been. It was hailed as a bold step by the government when it was introduced, and despite a few shortcomings, I still stand by its implementation. The idea of cashless transactions, and internet banking gives more transparency and will go a long way towards helping the economy. Maybe we don’t realise it just yet. People are aware now that the government is watching their every step, and the source of the cash can’t be hidden anymore. It’s also progressive for today’s generation, who handle most of their payments through their phones. Maybe it can’t be called an outright success just yet, but the signs are highly encouraging.
‘The exercise has been a complete failure’
Mohan Guruswamy, chairman, centre for policy alternatives society
The exercise has been a complete failure because it didn’t alert any black money and completely disrupted the economy. It rendered many people jobless in the construction horticulture sector, and small retail sectors. It caused a loss of 2 per cent in the GDP. Also they introduced digital money charges — 1 per cent on any transaction. Loss to RBI, cost of new currency notes, all together came to '4 lakh crore without any concrete benefits. Now the usage of digital money has come down to the pre-November level. Still a good sum of demonetised money has not come to banks. We can say it’s from the rural belt who don’t know anything about it. Even the soldiers at Siachen lost money due to this. The black money problem still remains. Ninety-six per cent is there in property, gold, money at foreign accounts, benami ownership of shares and property. Nothing of that was touched. What it did was it took cash flow from the system and made it a complete gimic. An act of vandalism and unprecedented stupidity. The number of new tax return filed grew only 23 per cent whereas the previous year it was 27 per cent so the whole notion that people are running to pay taxes is wrong.
‘It is pretty evident that more black money was circulating’
Nikhil Rajan, branch Manager, Syndicate Bank
When talking about the success rate of demonetisation, it is really unfortunate to say that, to a large extent, the step had not served its purpose though it was one of the major steps our economy had seen in past few years in terms of bringing out black money. Almost 99 per cent of the '500, '1,000 currency notes that were in circulation have been deposited back with the banks and if the figures are to be believed then it can never be such that this drastic step was taken to bring back just '16,000 crore black money. It is pretty much evident that more black money was circulating in the economy but people were able to make it white despite demonetisation. The government should therefore with foremost priority check this and find out how much black money has been converted. The next thing is about digitisation. The ruling government had urged everyone to switch to digital banking and make the economy corruption free, but the government itself has not taken any strict steps to implement digitisation. Making every transaction cashless and slowly cutting down the cash mode payment method for various activities will eventually help to make banking activities digital. However, nothing of this sort has been done. In a way the government itself seems to be a bit confused as none of the things that the PM said during his speech while announcing demonetisation has come into effect.
‘It was a misguided attempt, and designed to fail’
Anil Dharker, writer and columnist
In my most honest opinion, the exercise was a complete and utter failure. It was an entirely misguided attempt and was designed to fail since its inception. It caused incredible hardship to thousands of people all over the country, mainly poor people and daily wage workers. People who own small businesses, lost their business. The whole idea of demonetisation was to get all the black money back and give the country cleaner and whiter economy. In order to achieve this, they got back the highest denominator notes ('1,000), but they replaced it with an even higher denominator ('2,000). Black currencies are made from large currency notes, but here the point is missed! In hindsight, it doesn’t even seem like it was a demonetisation — to me, it seems merely a note exchange. What was the purpose of it all? Consider this, because of this, there was a decrease in the GDP growth, the lowest in the last three years since it has affected all sectors. A step in the right direction is digitisation. But, in a country like ours, which is still a third world country, it doesn’t happen overnight since the majority of the population is poor. A huge population works in the informal sector in jobs such as daily wage earners, vegetable/fruit sellers, electricians, plumbers, local shop workers and so on. Give them space and gradually, the shift will happen.
