The RBI has come out with its Annual Report 2016-17. The report says that 98.96% of the demonetized notes have returned to the banking system. Of the 15.44 lakh crores worth of currency in circulation in the form of Rs. 500 and Rs. 1,000 notes, 15.28 lakh crores has returned back. This is in contrast to the argument put forth by the Government during Demonetization that about 3.5 lakh crores worth of currency would not return to the system. The amount which stayed back
and never returned back was said to be the amount which was illegal and existent in the economy as Black money.
The huge reversal of the currency to the Banking system only shows, that even the black money has returned to the Banking system and has either turned white or that only a small portion (1.04%) i.e., 0.16 lakh crore (which is bound to further reduce) is actually the black money prevalent in the economy. Seen both ways, the Demonetization period claims that it would result in death blow to the Black money have completely failed.
These are in lines with the arguments put forward by leading economists who had warned that Demonetization was less conceived and was likely to fail. Those who opposed Demonetization included Amartya Sen, Raghuram Rajan, Kaushik Basu, Prabhat Patnaik, Arun Kumar and others. The economy too witnessed a 2.2% decelaration for the period April-June 2017 growing at 5.7% in comparison to previous year’s 7.9%. This again stands in contrast to Government claims that post demonetization, the economy would get revitalized and would pick up.
Demonetization was a Despotic act of the Government which yielded nothing to curb the black money and black economy. It possibly provided ways to turn the black money into white. It affected large sections of poor who were part of the informal economy and for whom being cashless or having plastic money or paytm was an elitist idea. The informal economy was dependent on cash based monetary transactions. Even a forcible attempt at pushing towards cashless economy is not justifiable, particularly for those for whom it is an elitist idea. Similarities of Despotic act of Demonetization are being drawn with sterilization program during emergency in the 1970’s. None of it achieved the results.
A question that arises is whether the Demonetization results put an end to Bhakt culture? A larger than life image has been built around the Prime Minister. Bhaktism sought to project that it was only after the current Prime Minister came into being that India has entered into a civilization. Earlier it was only in the dark ages. It was claimed that many things had started happening for the first time – outreach of electricity, bullet trains, roads, road connectivity etc. This devotion had reached its peak during the time of Demonetization. A super hero was sought to be created, who was out there carrying out surgical strikes against black money hoarders and the corrupt. And that he was out there to protect the honest.
Bhakts who seemed to justify the act, could hardly see as to why the Prime Minister could not bring in place the Lokpal system, which was one of the primary demands of the anti-corruption movement. Contrary to the pre-election claim of bringing back all the black money deposited in foreign banks including Swiss Bank and depositing about Rs. 15 lakh into each Indian bank account, the bhakts hardly seem to question as to why no action has been not taken in the direction. Why inspite of many Indian names identified in the Panama papers, no action has been taken up. This at a time, when the Panama papers changed the political fortunes of the political leaders across the globe including the prime minister of the neighbouring country where the Supreme Court removed the prime minister from office.
The results of Demonetization only show how unquestioned obedience can only go on to create a despotic leader and how it can lead to actions which harm rather than benefit the economy. The Bhakts and a large section of Indian middle class who were carried away by the current prime minister were the key backbone of support for creation of a Despotic leader. Each of the actions was seen as a dynamic act which was out to do something radically different and beneficial for the country. It also seemed that he was there to put out India in World Map for the first time. Supporting the Prime Minister on every act of his was depicted as a means for displaying one’s nationalism and patriotism.
With Demonetization results out and with a clear verdict emerging about its failure, will it put an end to Bhakt culture? Will the Bhakts, the aspirtant middle class stop lending support to a Despotic leader? Or the world of illusion continues about a new India by 2022 and the despotic leader brought back in 2019? Time will perhaps decide.
T Navin is a writer and researcher. He works with an NGO as a Researcher and did his M.Phil from JNU.