Narendra Modi - Demonetization or Demonization / jkgr ;k vkQr
Experts View :
The Stink From The Banks – Cleaning up rot
in banking system is Modi government biggest challenge on demonetization
Criticizing the
Modi government’s great demonetization gamble as a “calamity” former finance
minister P Chidambaram used a telling Hindi colloquialism: “khoda pahar aur
nikli chuhiya (you dug up a mountain and only found a rat)”. It is till too
early to write the final word on whether demonetization – in economic or
political terms – eventually turns out to be just a ‘chuhiya’ or a
‘babbar-sher’ revo-Iutionary change in the way the hidden wellsprings of Indian
society operate.
But in
administrative terms it has laid bare the great rot in our banking system.
Fixing this is not only the Modi government’s biggest challenge but also
something which it should have factored in from the get-go.
Fist, only about
29.8% of the money that was withdrawn on 8 November and has so far been
replaced in cash (Rs. 4.61 lakh crore between 8 November and 10 December in
place of the approximately Rs 15.44 lakh crore that were demonetized.
Secondly, the
sheer mumbers of seizures of contraband money in new notes show an endemic rot
in the banking system.
Third
demonetization has shown up a mirror to the relationship between the
government’s finance and economic branches on one hand and RBI and banks on the
other.
RBI and finance
ministry have issued 51 communications so far on demonetization. We still don’t
know what were the data sets, calculation and projections that went into the
making of such a decision, at least the data should be put in the public
domain.
With demonetization, Many of the old
networks of patronage and cosy collusion have been reactivated – this time for
a special commission
Nalin
Mehta
An Economist
No comments:
Post a Comment