It’s been two years since Demonetisation hit India, the day when Modi Ji went, “MITRON” and the rest of our month was spent outside an ATM machine. Some asked ‘Kyun’, the rest just shut up and got into one – this one spelt QUEUE. Ever since that 8 pm move by the PM, where many jokes of whether he was under the influence of an alcohol brand by the same name surfaced, there have been many conspiracy theories around the culling of 1000 and 500 rupee notes. Some point at Modi’s attempt at refurbishing the coffers of banks who were under tremendous pressure, while others talked about how it was a good thing for the economy. Paytm replaced ATM, well somewhat, but who could have ‘thunk’ that people would die waiting to withdraw cash -- it happened. It’s been two years now. We’ve learnt to live with the new set of multi-colored Gandhis but the politics around it continues. #Dark Day is trending on twitter and this is what the politicians are talking about.
Meanwhile, according to reports, around 4.30 crores new bank accounts were opened during demonetisation, 2,600 crores of black money was seized, 100 deaths were reported during the move. Former RBI top boss, Raghuram Rajan, had this to say in an interview to the Times of India. “Certainly, the government’s move to try and reduce the amount of black money in the economy through various measures is an important one. But as for demonetisation itself, there are really two or three questions. One, of course, is that we have seen the costs of demonetisation upfront, and they are substantial. Let us not mince words about it – GDP has suffered. The estimates I have seen range from 1 to 2 percentage points, and that’s a lot of money – over Rs 2 lakh crore and maybe approaching Rs 2.5 lakh crore.
“Then there are the other costs – the hassle cost of people standing in line, the printing cost that the RBI says is close to Rs 8,000 crore, the cost to the banks of withdrawing the money, and the time spent by their clerks, by their managers and by their senior officers doing all this, and the interest being paid on all those deposits, which earlier were effectively an interest-free loan to the RBI. I think the people who mooted this must have thought that some of it would be compensated if money didn’t come back into the system. The fact that 99% has been deposited certainly does suggest that aim has not been met.”