There has been many a view, pro and con, on the issue of Demonetisation and more so with the announcement by RBI lately that 99% of the demonetised notes came back. One would believe that we should not assess this measure on purely economic and political terms. To put this issue to rest as an extreme and repressive measure, we need to assess Demonetisation on the Index of Human Happiness. This is in line with the current trends where GDP is considered no longer the index of prosperity but the Happiness Index on which latter measure Bhutan scored the highest in the world.
This approach will bring out the truth and show how Demonetisation inflicted distress and misery on the people at large and more so on the lower strata of our society. Words of adulation are being showered on PM Narendra Modi for having the courage to have implemented this measure. But in the same breath one must say that bravado is chosen by fools and those who are lesser educated who tend to ignore the negative implications of their actions. There are others who say that the results of the elections held since Nov 2016 where the BJP got a massive endorsement from the people is proof enough that Modi’s policies are acceptable by the people. But what they forget is that elections are a completely different ball-game. Elections are won and lost on many issues and the least among them is monetary policy.
The other issue here is that we should not rush to count our laurels based on the endorsement of the illiterate and the gullible which is what is the large mass of the voting public in India. Concluding policy measures are taken up by governments which are able to reasonably assess the gains and losses arising out of any action.
Rarely do they go out on a limb and hope for the best as this Modi government has been doing and then launch cover-up measures like trying o hide the number of demonetised notes that came back and outflanking initiatives like digital economy. All this was unnecessary since the human cost was very heavy and each of these measures could have been done at their own time and pace slowly but surely.
