I'll take liberty to correct your perspective: A demonetization move that directly affected livelihood of billion Indians, but we don't know whether for good or for worse. I don't like Mr Modi, but I was cautiously optimistic the day it was announced. However over last two months, its been clear to me that no thought was put in the decision.
Then I'll take the liberty to correct your understanding of my comment:
I spoke about: a move that directly affected livelihood of billion Indians, "with a possibility of large-scale riots". Since those large-scale riots did not happen it can be termed a success. Why am I talking about "large-scale riots"? Because the Opposition (even the Supreme Court of India) predicted large-scale riots: http://www.merinews.com/mobile/article/India/2016/11/22/note...
"Supreme Court says situation after demonetisation serious, fears riots":
Perhaps you are not in or have not been to India. Even minor situation can lead to deadly violence there. Associating those 100 deaths to demonetization is absolutely pushing a political agenda by media.
Check how death of popular politicians can lead to 100s of ppl committing suicides in India. Or check how 1000s die every year in train accidents in just one city of Mumbai.
The sad part is even most Indians I meet in US are mostly clueless about conditions of masses. They remain preoccupied with food/bollywood/cricket etc.
The criterion for success for an economic intervention cannot be "riots didn't happen." The only word for this reasoning is absurd.
I'm not sure where the rest of your argument is going. You seem to be saying that Indian lives are cheap anyway.
The declared criteria for the success of demonetisation has shifted twice so far. It started as "we'll stop corruption", then it was "we'll go cashless" and now it's "we've converted cash saved at home to cheap loans". But even the BJP has never claimed that it was "this will not cause riots".
I do not see any contradiction in pursuing all of them together: stopping corruption", "going cashless", "cash saved at home to cheap loans". And corruption is not something that a single step or policy can fix. It would be rather stupid of government or politicians to put all effort on a single goal.
It seems to me critics show a deep disconnect with people when they claim failure due to inconvenience to people. In India riots can occur on far minor issues than demonetization. So yes people are willing to wait for results but critics are hastily jumping to conclusion that scheme has failed.
I am serious. If you live in India you would have heard of constant fear-mongering by the opposition parties about "large-scale riots" and "financial emergency". No such thing happened. Every Indian co-operated with the move. This is unlike any other demonetization that was carried out previously by 6 other countries which either lead to coup d'état or large-scale riots.
Also, is the only counter one can come up with for an economic move is talk about "death of 100 people"? Seriously? In a populace of a billion the death of 100 people for such a huge economic move is close to nothing.
This is a no-true-scotsman argument. I am Indian. I was forced to co-operate with the move because of being an ordinary citizen. I had no choice but to go along.
Then I'm thankful that you did not riot. Irrespective of your political inclinations.
On a lighter note, the "large-scale riot" theory was not propagated by the Government but by the opposition. Read up articles by P Chidambaram and you'll know what I mean. So don't hold us guilty for using that term :)
Of course I did not riot. I don't want to go to jail. That does not mean that I _co-operated_ with the move.
Explain to me again how the move was a success. You are assuming a priori that it was a good decision as long as riots don't happen, which they didn't, hence it was good. But why was it good regardless of riots/no riots? I don't see how. So a few hundred crores of black money were caught in raids. That is a drop in the ocean. A hundred times more than that is caught in regular tax raids every year.* It has done absolutely nothing to curb future corruption. What it has done for sure is to reduce spending everywhere and cut down on industrial production and employment.
You are welcome to believe it was successful, just like I believe it was a disaster. We'll find out at some point.
"Countrywide Rs 242 crore in new currency and jewellery worth Rs 15 crore has been seized. The amount is not abnormally high, as I-T sleuths annually unearth Rs 10,500 crore to Rs 11,000 crore in undisclosed income."
Because you are confusing demonetization with remonetization and post-remonetization. All are different. Demonetization ended on December 31st. The move was a success as no riots or coups took place. Why should I take that factor to gauge success? If you look at the history of demonetization, with the exception of Britain, 5 other countries either had large-scale riots or the Government's fell due to coups. The remonetization phase did not even commence and in some instances demonetization was also rolled back. Demonetization is just declaring currency as no longer legal tender. It has nothing to do with implementation or the after-effects. The actual implementation of replenishing cash is called "remonetization" and post-remonetization is the real impact.
Now is remonetization a success? What about post-remonetization? Only the RBI final report as well as Income Tax assessment of those deposits made during November 8th to December 31st will be able to explain. This will take some time to come out. You are assuming that all money deposited in the banks are automatically converted to white. That is where your assumptions are wrong. The Tax authorities have already started auditing these deposits and are actively catching culprits who deposited huge amount of cash during the remonetization phase (see Mayawati's brother as well as her party being investigated for depositing 104+ crores). They'll start with the big fish and then catch the smaller fish.
> So a few hundred crores of black money were caught in raids. That is a drop in the ocean. A hundred times more than that is caught in regular tax raids every year.* It has done absolutely nothing to curb future corruption.
You are assuming that this is the be-all and end-all of this scheme. You are assuming that the Income Tax authorities won't look at and audit the deposits made in the banks when you declared that "It has done absolutely nothing to curb future corruption".
It's not a stat for me. I do sympathize. But stretching this argument to say that demonetization is a failure is ridiculous. In that way, in India, the deaths due to accidents are close to 1,37,000 in 2013 alone. Should we call transportation a failure and put a halt to every mode of transportation (be it autos, cars, buses, trains, planes etc) just because of this statistic or should we work towards improving the system?
I compared demonetization carried out by India with demonetization carried out by other countries. When I see that there were large-scale riots and coup d'état in other countries but no such thing happened in India I will definitely take this as a success. You want to have a narrow negative perspective of 100 people dying you can continue to have that. I have a wider positive perspective that no large-scale riots or coup d'état happened that would have sent the Indian economy in a downward spiral or worse: civil war.
"Should we call transportation a failure and put a halt to every mode of transportation (be it autos, cars, buses, trains, planes etc) just because of this statistic or should we work towards improving the system?"
Are you actually comparing currency to transportation ? People have a choice in the mode of transport. Your villager however can't use bitcoins because his Rs.500 note isn't legal tender.
"I have a wider positive perspective that no large-scale riots or coup d'état happened that would have sent the Indian economy in a downward spiral or worse: civil war."
Your standards for a successful policy are shockingly low. And stop lying, you have no sympathy, you just called a 100 deaths as having a "narrow perspective".
Do you also disagree with the countless economists that have criticized the move based on theory and facts. Or is that "foreign propaganda" for you ?
> Do you also disagree with the countless economists that have criticized the move based on theory and facts. Or is that "foreign propaganda" for you ?
I definitely disagree with the "countless economists" mainly because economists love status-quo and despise disruption. We had "countless economists" say that the Telecom revolution in the 1990's was a big burden on Indian exchequer and a waste of resources. Today every Indian is thankful for the Telecom revolution and the introduction of computing as it created huge job opportunities. Economists have their place. They are not policy pundits. We had possibly the best economist in India as the Prime Minister for 10 years. He failed miserably in implementing any policy decision (including his party's own pet projects) leading to policy paralysis. Read about him here: http://timesofindia.indiatimes.com/india/Time-magazine-dubs-...
> Are you actually comparing currency to transportation ? People have a choice in the mode of transport. Your villager however can't use bitcoins because his Rs.500 note isn't legal tender.
It doesn't matter the choice of transport if you are dying in huge numbers: 1,37,000 accidents in just 1 year.
> Your villager however can't use bitcoins because his Rs.500 note isn't legal tender.
This shows your absolute lack of ground knowledge about India. Why should a villager use bitcoins when he can use PayTM wallets or even BHIM app (using Unified Payment Interface) that was introduced by the Indian government. Read about it here: http://indiatoday.intoday.in/story/paytm-on-boards-small-mer...
> Your standards for a successful policy are shockingly low. And stop lying, you have no sympathy, you just called a 100 deaths as having a "narrow perspective".
From your comment it is quite clear that you don't live in India. So stop acting like a know-it-all. I live in India and I can differentiate between propaganda and reality.
Do you really think people will install and use PayTm apps overnight in villages ?. Was there any research done on mobile literacy or making things easier in rural areas ?
Also, you wish to ignore facts and reasoning posted by economists all in the name of "disruption". And FYI The Planning Commission of India AKA "Policy Pundits" consists of renowned economists.
Mobile literacy? Was such a research done before the Mobile and Telecom revolution? Spare me your ignorance please.
Forget the Planning Commission of India, we have had the worst experience with a Prime Minister, who was an Economist, and had no spine to take on the corrupt or even implement his own policies. India practically lost 10 years of it's growth to this useless economist. So no please, we don't need more economists. We have more than enough Economists. We need someone who can take tough policy decisions.
Yes and I already acknowledged it when I said he was "possibly the best economist India had". How did I qualify he was "the best economist"? Because of his reforms in the 90s which were spearheaded by the then Prime Minister Narasimha Rao. Would he have been able to conduct the same reforms if he was the Prime Minister instead of Narasimha Rao? Never.
As I said earlier, economists have a place. He was great as a Finance Minister and RBI Governor. But the moment he became a policy decision maker (rather than just a policy maker) he failed miserably. Do you understand this basic difference? This is the reason I say that economists cannot take policy decisions. They can make the right policies if they are dictated by someone higher up the chain but are incapable to take the same decisions if they are given a chance.
The evidence for that is the GST reform. GST was the brainchild of Manmohan Singh and his Planning Commission when he was the Prime Minister for 10 years. But he failed to get the damn reform passed in the Indian Parliament mainly because he did not know or understand political maneuvering. How is it that the same GST reform, which was Manmohan's brainchild, passed by Narendra Modi (who is his opponent) without any troubles?
If you want to look at a data driven journalism to the flip flops, you can start here: http://www.indiaspend.com/cover-story/how-modi-changed-and-c....