The Monumental Folly of Demonetization

Sahaya Sadhyam Rajatwam Chakram Ekam na Vartate : Chanakya

This was one of the maxims of the great statesman economist of the 3rd Century BC : “The King and the Council are the two wheels of the cart and the cart cannot move on one”

Chanakya was very clear. The king should be extremely diligent in nominating his Amatyas, but having done so, he must resign the governance to them, retaining titular, veto and dispute resolution powers with himself. I believe, this was a very evolved structure which provided autonomy to the permanent executive but at the same time had built in checks and balances.

It is very essential that the King has learned council and that he heeds it. The king must not be surrounded by sycophants or people who are not ideologically soaked into making his monarchy a benevolent state that works for the safety and happiness of his subjects.

People say, one of the advisers of Modi for the demonetization was Ajit Doval. I don't believe this one bit, as why should an IPS officer who spent a large part of his professional life snooping in the IB, be the one to advise Modi on matters of economy. This would mean, there is a drought of economists and thinkers in this country. I don't have high regard for Doval as I believe his handling of Pathankot was highly ham-handed. Besides, any man, who lacks the conviction to own and admit failure in my view is a timorous and weak kneed namby-pamby. And Doval despite he being lionized by the media as the James Bond of India, I would place in that category.

I am sure, a whimsical Modi, had not imagined the scale of disruption and misery that the demonetization would cause. This is the very reason why you need strong council with stalwarts who can stand up to you and decant your disastrous decisions.

I feel, with Rajan as the Governor of RBI, the demonetization would have been implemented with far greater preparedness. The mint, the currency chests, the ATMs the banks, their rural outreach, the cash distribution channels, the cash transporting staff and vans all needed to be in order to make the operation smooth and successful.

The Finance Minister Jaitley and ilk are now shamelessly changing the narrative. The whole narrative of black money is now being morphed into transitioning to a cashless economy. It is child’s logic, that a certain element of cash in the economy is actually healthy for the economy. So the logic of a completely digital economy, and that too without fool proofing security features needed to support such economy being put in place really beats me. 

Regrettably, since the woes and throes of demonetization don't seem to end, and most of the money that used to be in the channel now demonetized is reaching the banks back, the specter of black money is now fading away, and a hapless government with egg in its face is now changing track from black money to a cashless economy, and who better to shamelessly trumpet this than Jaitley himself.

I am Modi supporter and I want him to succeed, but it saddens me no end to say, with such measures he may not.