50 Days of Demonetization – 'Things Gone Right / Things Gone Wrong' - Analysis

Demonetization

Today (30^th December 2016) marks the 50^th day after our PM Shri Narendra Modiji announced a historic move of demonetization of high value currency notes of ` 500/- and ` 1000/- on 8^th of November 2016.

In his high-octane speech on 8^th November, Modiji urged citizens of India to bear the brunt of demonetization till 30^th December (for 50 days) by which he expected the things would return to normalcy. As promised by him; indeed situation is improving as I like many others could withdraw 5-6 thousand rupees in 2 days from ATM and our waiting time was not more than 5 -6 minutes each day.

Much has happened in these 50 days right from the doors of government to opposition and from public to media. So this attempt is to list down “Things Gone Right” (TGR) and “Things Gone Wrong” (TWG) from a point of view of lay man like me who is a Modi supporter.

New Notes of Rs. 500/- and Rs. 2000/-

No.	TGW (Things Gone Wrong)	TGR (Things Gone Right)
1.	Unpunished, ever-growing and socially acceptable corruption and black money since past 70 years of Indian Independence	Guts shown by our PM to take steps against such menace of a corrupt system and black money
2.	a) Long queues, cash crunch, inconvenience to general public all across India. b) Few stray incidences of public unrest.	a) Support given by citizens from all walks of life even at the cost of huge inconvenience to them. b) Support of citizens arrested by our PM through no. of public speeches with no major incidence of public unrest against overwhelming and inevitable problems of demonetization. c) Initial support given by almost all of the opposing parties
3.	a) Unpreparedness of GOI seen through stalled micro economic activities due to crash crunch. b) Frequent policy changes by GOI and RBI and c) some time complete reversal of its policies.	a) Nothing would have prepared anyone for the herculean task of scrapping 80 – 86% of the currency in circulation in the vast country like India. b) It reflects agility of the system (big difference from Manmohan era) in spite being a ‘Sarkari’ system and speed of decision making of GOI. c) Policy reversal reflects willingness of GOI to accept its mistakes and do the course correction.
4.	a) Nothing was done by the GOI (like printing more currency notes of low denominations) in anticipation of the cash crunch in cash driven economy of India. b) Even in his speech on 8th; Modiji fell short of portraying the severity of the entire overhaul and most of the commoners especially from metros inaccurately considered money exchange and cash withdrawal would return to absolute normalcy within couple of weeks.	a) High level of secrecy and surprise was at most important to arrest black to white conversions of politicos and corrupts.
5.	Life came to a standstill with no cash to spend on daily necessities particularly in villages and more so for the remote villages where there is zero or limited exposure to financial institutes and internet.	Remarkably reduced naxalism, terrorism, human trafficking etc. In fact economic activities began to normalise in Kashmir after demonetization as separatists are left with no money to entice Kashmiri youths in to stone pelting and other anti-national activities.
6.	Still lot of them were able to convert black money in to white through illegal means.	These cases coming in to light shows how strong the system has become and how determined the government is to win this battle against black money.
7.	Agitations of opposition parties against government with the aim to get a traction to stop Modi wave	Modi wave is far from dying. BJP is a clear cut winner in local gram panchayat and municipality elections.
8.	Most of the media (presstitutes) being against Mr. Modi and BJP were busy telecasting only the negative impacts of demonetization.	Still there were couple of news channels which were firmly supportive of the decision.
9.	Normalcy is still a distant dream as cash crunch is going to bother us for couple of more months.	a) Cash crunch is easing out for sure and as explained in the introduction, I have experienced it myself. b) Cash crunch is turning out to be a good push for the digital / cash less or limited cash economy - though this might not have been the initial aim.

Finally, in the short term it might be easy to conclude that demonetization was a 'poorly executed - correct decision' (economic indicators like GDP, IIP might support this statement) or nothing on the balck money / corruption front will actually change in the long run; making this entire exercise of demonetization a futile one but I am more happy that my PM elect believes in action.

Action with an intention of correcting it if gone wrong is better than the inaction of decades!