Know what Raghuram Rajan did to exchange his ‘old’ notes after demonetisation

Former RBI chief Raghuram Rajan came back to India to exchange old notes after demonetisation. Demonetisation was announced last year by the Centre.

New Delhi, Sep 8: If you think only common people like us were in a state of panic and urgency to exchange scrapped currency notes with the legal ones post demonetisation, then you might be little wrong.

Because like the rest of us, who were taken aback by the sudden announcement of demonetisation by the Narendra Modi government last year, former Reserve Bank of India (RBI) governor Raghuram Rajan, who was in the United States at that time, too had no clue as when exactly was it coming.

That is why Rajan, who is currently a professor of finance at the University of Chicago in the US, had to come back to India to exchange his old Indian currency notes with the valid ones after demonetisation.

Actually, like most Indians who go to foreign lands, Rajan too had carried some Indian currency notes with him while leaving the country after the end of his tenure as the RBI chief in September last year to the US to restart his career as an academician.

In November last year, Prime Minister Modi in a televised address announced demonetisation, scrapping high-value currency notes of Rs 500 and Rs 1,000. What followed after note ban (as demonetisation is also popularly known as) we all know it pretty well.

People in panic of losing their hard-earned money (well, not all in India are corrupt and hoard black money. Right?) rushed to banks to exchange their old notes with the new ones.

That resulted in unending queues in front of banks and an estimated 100 people across India died either waiting in bank or ATM queues after demonetisation.

Rajan, who is currently in India to promote his latest book, I Do What I Do, in an event in the national capital on Thursday added that he was not in favour of demonetisation as according to him the short-term cost of note ban would outweigh the long-term gains.

Rajan said he was asked about his views on demonetisation by the government in February 2016 and he "gave it orally". "There was absolutely no date fixed for demonetisation," Rajan said when asked if he too was taken by surprise on November 8, 2016 that Rs 500/1000 notes have been scrapped.

He said he had taken along Indian currency to the US and had to come back to India to "actually change that back" into valid currency notes.

Asked if he would be willing to return to India for another position or was happy teaching in the US, Rajan said he is not special among the diaspora and there were many people who, if called upon, would come back and do what is necessary.

"Many of us have certainly fairly comfortable lives there...coming back to India and doing what I did, gave a tremendous sense of fulfilment...I think it's very selfish thing to come back. Ya, if called upon...and if there is a place where you can make a big difference, of course," he said.

We don't know, when Rajan, one of the best economists in the world and he is the one who predicted the global financial crisis of 2007-2008, will be back in India to work.

One thing we all know is that demonetisation is a "failure", especially after the recent RBI data showed that 99 per cent of banned notes were returned to the system that indicated that the whole exercise was indeed a futile one affecting so many people, especially the poor.

Recently, when the figures of country's Gross Domestic Product (GDP) for the first quarter of the current fiscal that ended in June were declared, the negative impact of demonetisation was clearly felt.

It showed that India's economic growth has slid to a three-year low, partly due to demonetisation. India's GDP growth has sharply dipped to 5.7 per cent in Q1 Of 2017-18.

OneIndia News