08 Nov 2017
It was a year ago that Indian Prime Minister Narendra Modi announced a plan to rid his country of illicit cash – outlaw 86% of bank notes in the country overnight.
The thinking behind the demonetisation programme was that, on hearing the news, criminals would hang onto their dirty money (even if it was banned) and this would kill off their enterprise.
However, quite the opposite happened.
A staggering 99% of the outlawed bank notes were handed in, the Reserve Bank of India reportedly found.
So rather than fight criminals, critics say, Modi actually helped them launder or get their dirty cash back into the system.
At its launch and in its aftermath, demonetisation was characterised by anger and chaos – winding bank queues and dire cash shortages, businesses being hit and reports of deaths and suicides.
Critics have come down hard too, quoting worrisome statistics – 1.5 million lost their jobs in the first quarter of 2017 due to the programme, said politician Congress vice president Rahul Gandhi, quoting the Centre for Monitoring Indian Economy.
Meanwhile, India’s growth rate slipped southward, going down from about 7.6% before demonetisation in 2015-16 to 6.1% in the first quarter of 2017.
Was it worth the hassle?
Yes, said Modi’s Bharatiya Janata Party, which decided to mark the anniversary of the programme by declaring 8 November 2017 as ‘Anti-Black Money Day.’
For one, there has been a decrease in currency circulation and this shows there’s been some success in fulfilling a goal to transform India into a less-cash economy and hence reduce the flow of black money, according to a statement on the the BJP’s website.
“With the change in the low cash economy, India has made huge leaps in digital payments during the year 2016-17,” it read.
The BJP also said 56 lakh new personal taxpayers filed their returns till 5 August 2017, up from about 22 lakhs last year.
Regarding non-corporate taxpayers, from April 1 to August 5, 2017, about 34.25% more self-assessment was paid in comparison to 2016 during the same period, it said.
Yet despite rolling out its positive aspects, the BJP is yet to convince its critics that the programme was worth it.
Hence, the country’s Anti-Black Money Day was characterised by various media and key figures either backing or blasting it.
Will there be a similar day next year, and will there be more consensus?
It remains to be seen.
– By Irene Madongo
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