While the negative impact of demonetisation can still be felt, the gains have been minor and could have been achieved even without the disruptive move.
The 5.7% figure, based largely on data from the corporate sector, does not capture the almost one-third of the economy hit by demonetisation and GST.
The Goods and Services Tax (GST) is awfully complex and has confused not only businesses and the public, but also the government.
Demonetisation as a means of tackling the black economy was destined to fail. What’s worse is that its ripple effects are having severe adverse effects on India’s economy.
While C. Rammanohar Reddy’s Demonetisation and Black Money tries to present a moderate view of demonetisation and its impact, what is missing is the way the impact is estimated and why official data may be lacking.
The confused narrative surrounding post-demonetisation growth consequences shows that we simply don’t have enough hard data on the non-agriculture, unorganised portion of India’s economy.
Demonetisation has not dented the black economy, but it has damaged the white economy, especially the unorganised sectors.
In Understanding the Black Economy and Black Money in India, Arun Kumar takes us on a journey from the origins of the black economy in India to what should come after demonetisation.
The survey does not lift the mist of confusion on India’s macroeconomic situation after demonetisation, while the conservative fiscal stance being proposed will only lead to an aggravation of the problems confronting the economy.
Making India a less-cash economy will not necessarily end the generation of black money. It only means that the circulation of black income will take place differently.