Hari Jaisingh
Hari Jaisingh

Noteban “miracle” that never was!

Hari Jaisingh

Hari Jaisingh

I am not sure who first floated the concept of Modinomics vis-à-vis world famous economist Dr Manmohan Singh’s Manmohanomics. I remember having interviewed the economist Singh as Finance Minister in the P V Narasimha Rao government. I was then impressed by his common man sense concepts in economics viewed on the larger canvas of international reputation he enjoyed for his economic wisdom for poverty-stricken developing countries like India.

Before occupying the prestigious chair in New Delhi’s North Block,  he was the Reserve Bank of India’s (RBI) Governor based in Bombay, now Mumbai. He knew the art of managing complicated eco-financial affairs with dignity and honour while maintaining the RBI’s institutional autonomy. He understood the complex nature of Indian politics. All the same, he never played a political card over his grassroots economic and financial wisdom.

My thoughts travels back to my years with The Trust- run Tribune in Chandigarh where I had several opportunities to interact with the soft-spoken gentleman-Prime Minister who never showed off his tremendous intellectual power, honesty and passions for the uplift of common men and the country’s economy. This was well-reflected when he issued a statement on Prime Minister Modi’s second anniversary of his major decision on Demonetisation on November 8, 2016 which has impacted every section of society.

The former Prime Minister states “Today is a day to remember how economic misadventures can roil the nation for a long time and understand  that economic policy-making should be handled with thought and care”. Regrettably, there is no sign of remorse in the present establishment.

Dr Manmohan Singh observed that “small and medium businesses that are cornerstone of India’s economy are yet to recover from the Demonetisation shock. This has had a direct impact on employment as the economy continues to struggle to create enough new jobs for our youth. The financial markets are volatile as the liquidity crisis wrought by demonetization is taking its eventual toll on infrastructure lenders and non-banking financial services firms….

With depreciating currency and rising global oil prices, macro-economic headwinds are also starting to blow now”.

The same views, more or less, were expressed by India’s renowned ex-RBI governor Raghuram Rajan. Speaking at the University of California in Berkeley on November 9, he was well focused in conveying his views on Demonetisation and GST. He stated that the two major “headwinds”  held back India’s economic growth last year.

Ironically, Finance Minister Arun Jaitley and other BJP leaders have dubbed the critics of the demonetization as “prophets of doom”. The issue here is not one of ‘prophets of doom’ as differences in perspective and views on Noteban do not make its critics prophets of doom, the term conveniently used by the decision-makers in power to cover up their flaws that created a visible panic situation among nearly all sections of Indians society. This underlines one-track mindset of powers-that-be who believe “we can do no wrong”! This is the tragedy of the BJP-led NDA regime headed by Modi. We still do not know which expert or group of experts put him on this adventurous course ! A democratic government cannot be run on secrecy.

Raghuram Rajan pointed out, and rightly so, that “excessive centralization of power in political decision-making is one of India’s main problems. He acknowledged that for four years – 2012 to 2016 – India was growing at a faster pace before the “two shocks” of note ban and GST. I won’t go into the merit or otherwise of GST. It has had some teething problems, including over-bureaucratised paperwork to the disadvantage of tax-paying sections of the public.

It is a pity that the present government has not yet simplified much the working of the system and introduced the much-needed financial reforms. Such reforms have to derive its strength from the grassroots conditions of the economy and related matters. The major problem with the Noteban was a total absence of understanding of the rural ground realities and possible woes of common citizens and the plight of those working in informal sectors. This is where millions of people lost their jobs. But, who will listen to their cries and say “sorry” and stand corrected?

The problem here is one of arrogance on the part of the persons at the helm who think that “our PM can do no wrong”, forgetting the harsh truth that even God has to be accountable to his devotees! I hope Modi would sooner or later understand ground realities of Bharat, that is, India!

The question is not of “two years” data showing an increase in tax base or greater formalization of the economy or India retaining the fastest growing economy tag. The real challenge lies in ensuring all-round growth of all segments of our underdeveloped economy. As Rajan put it candidly: “The reality is 7 per cent (growth) is not for the kind of people coming into the labour market and we need jobs for them. So, we need more and can’t be satisfied at this level.” Herein lies a big challenge, Mr Prime Minister! He needs to see a large picture of India and come out of the tag of his being pro-rich!

We, of course, salute the people of Gujarat for their entrepreneur spirit. But my point is: Gujarat is not India. The face of India changes after a cluster of 50-60 villages. We expect the Prime Minister and his team to assess harsh realities of the other India that lives in villages. Here stray “miracles” for publicity won’t do. In the changing face of India, we need to understand changing ground realities and rising expectations of young Indians, the poor, the have-nots, tribals and minorities!

Here, I wish to point out that those who initially supported demonetization did so in the hope that this would put an end to the black money and curb terror fund. But, the latest data show that 99 per cent of the money has gone back to the RBI as black money hoarders no longer hold it in cash. As for terrorism funding, they are known to use fake Indian currency!

There are wheels within wheels in the working of the Indian economy. No one knows which wheel is operating at whose behest. This is a harsh reality no one talks about. We need more transparency and accountability in running our economy, keeping in view that even after over 70 years of Independence we are still seeing a large number of poor children, tribals and deprived sections of the people on the streets in our cities and towns. Are they not part of our economic well-being. Well, we have to think and act afresh instead of high-sounding rhetoric and selling false dreams of promises. The people of India deserve a better deal for well-being of their existence, both in rural and urban India. India’s persons of destiny will have to be those who give concrete shape to the dreams of the poor and the have-nots. Democracy demands fair play and an honest approach to men, matters and issues, beyond narrow party or religious lines ?

- Hari Jaisingh, Senior Journalist.

(The ideas expressed in the above article are those of the author.)