A top pro-Narendra Modi scribe has revealed it all. In a recent blog, he has said, there was no expert economic advise which drove Modi to demonetize Rs 500 and 1000 notes on November 8; in fact, he suggests, virtually giving credence to former finance minister P Chidambaram, that Modi did not consult any economist.
Swapan Dasgupta, in his column “Right & Wrong” of the Times of India's online blog platform, has said that “economists are bewildered” by the Prime Minister’s audacity, and he emphasizes, has become “pretty obvious.”
Known for his open and long-time support to the BJP, especially Modi, Dasgupta was nominated as member of Parliament by the President in April 2016. Earlier, in 2015, the Modi government conferred on his India's topmost award, Padma Bhushan for his “contribution” to literature and education.
Refusing to name those who are being named as not having been consulted, including Arvind Subramanian, an economist of highest order currently working as chief economist with the Government of India, Dasgupta, says, “There are absolutely no precedents of a step that has led to as much as nearly 86% of the cash currency in circulation being scrapped.”
“The only other demonetization exercises in recent times”, he says, are of “Germany after World War II, Russia after the break-up of the Soviet Union and Libya after the fall of the Gaddafi regime”, adding, these were “undertaken in ravaged economies and after huge political turmoil.”
He goes on to add, “India is the only known example of a functioning economy, indeed one experiencing a healthy growth rate, where such an experiment has been attempted.”
“Consequently”, Dasgupta, who is privy to what's happening around Modi than any other journalist, says, “While economists may evolve theoretical models of the likely consequences, they are hamstrung by the fact that they have no worthwhile historical precedents to base their forecasts.”
Based on these facts, he says, “To a very large extent, the November 8 announcement (of demonetization) has reduced economics to plain conjecture. ”
This is the reason, Dasgupta believes, why “former Prime Minister Manmohan Singh went beyond the familiar complaints of 'monumental mismanagement' of the demonetisation exercise and berated the Narendra Modi government for 'organized loot and legalized' plunder of the Indian people.”
He adds, “These were strong words from a person who, apart from being a consummate politician, has a reputation as an economist.”
Yet, Dasgupta says, “Economics was only tangentially the rationale behind a move whose ramifications have not yet been fully grasped, nor are likely for six months”, insisting, “That every family in the country has been inconvenienced in different degrees is undeniable. Perhaps no act of government has affected every citizen of India so profoundly as this one.”
It is Modi's politics, suggests Dasgupta, which behind Modi's move. “Regardless of what conclusions the collective body of Indians have arrived at — or will arrive at in the near future — Modi has made his credentials as an agent of change known to every Indian, and made them experience it”, he says, predicting, it would be a precursor to the the 2019 general election.
Praising Modi for forcing a “revolutionary change on a civilization that has got too used to baby steps”, he says, it would help the economy go cashless, something already visible with the “demand” for card swipe machines going up drastically “among smaller shop owners and businesses”, pushing behind the era of traditional, cash economic transactions.