Demonetisation: Was the risk worth taking?

Demonetisation was done with such suddenness that it impacted every stratum of the society, though the degree of impact varied depending on how cash dependent one was.

On this day last year, Prime Minister Narendra Modi made an announcement that shook the nation. Around 8 pm on November 8, 2016, Modi declared that close to Rs 16 lakh crore cash in the form of Rs 500 and 1,000 notes would cease to be legal tenders, reducing them to mere paper slips with Gandhi ji's photo printed on them. Demonetisation was done with such suddenness that it impacted every stratum of the society, though the degree of impact varied depending on how cash dependent one was.

In the following week, banks and ATMs witnessed massive crowds as people wanted to get rid of worthless old currency and get whatever amount of new notes they could manage for day-to-day purchases of essential commodities.

There were fears that restless people could resort to violence and the situation may spiral out of control. Considering the fact that India is largely a cash-based economy and that most do not use plastic money, it has to be said that people exhibited a great deal of patience and stood by the Prime Minister's decision. Great inconvenience was caused, but people did not revolt against the government's move and patiently waited for their turn to come, which is a testimony to the fact that by and large people trust Modi.

Demonetisation was a move that could potentially have ended a Prime Minister's or party's chances of ever being voted to power again. But, barely two months after that, the BJP registered a thumping win in the assembly elections in Uttar Pradesh, the most populous state in the country. Considering the backwardness of the state, people of UP would have experienced massive inconvenience due to demonetisation, but they voted for Modi just like they did in 2014 Lok Sabha elections. The opposition parties made note ban a focus of their poll campaigns and tried to capitalise on people's annoyance due to demonetisation, but they failed and the Modi wave triumphed.

The outcome of the demonetisation is still being debated, the actual gains from it are yet to be quantified and the question whether it was a success or not is a long way from being answered. The point here is that even if we take it as an experiment being done on the economy, it requires a tremendous amount of courage and risk-taking ability to take a decision that can anger the voters.

Politicians are known to try and woo the voters with their glib talk and appeasement. Seldom do they try to bite the bullet and take a decision that can cause widespread inconvenience, fearing that they may not lose their votes? Modi's note ban decision, despite knowing that it can go horribly wrong, needs to be acknowledged for sheer fearlessness with which it was taken. It may or may not have yielded desired results, but at least an attempt was made to rid the nation of long pending problems.

Corruption and black money hoarding cannot be weeded out till the society as a whole starts taking pride in abiding by the laws. No matter what rules are made, people will find a way around them. Effective regulations from the government and a wholehearted commitment by the society to sincerely abide by it is the only way to rid our nation of corruption.

Demonetisation was definitely not a plan that promised to wipe out the black money, tax evasion and corruption problems in one go, but it was definitely a step in the right direction.

OneIndia News