The rationales behind the surprise move – targeting black money, terror financing and building a cashless economy – have all failed to elicit results. Why then was this exercise undertaken at all?
While demonetisation and the resultant hardships have tarnished the reputation of the BJP-led central government, the Samajwadi Party’s record of criminalised politics may become a roadblock for it.
With little hope for normalcy even 100 days after the note ban, there is an urgent need for providing relief and compensation to those who have been most affected.
If the government is serious about addressing the black economy, fundamental changes in the structure and organisation of the economy and politics are required.
A survey of daily wage labourers in Ranchi and surrounding rural areas shows that demonetisation was more than a short-lived shock for the informal sector.
A drastic decline in residents’ employment opportunities and incomes since the note ban has added to the existing woes of hunger, malnutrition, poor sanitation and drainage congestion.
If an economic slowdown occurs due to demonetisation, the self-worth and honour of the extremely backward castes communities may be affected. How this plays out in the upcoming state assembly elections remains to be seen.
When a man has his back to the wall, he sometimes loses control over his tongue.
Unusual citations in the survey could indicate the awkward situation of the chief economic adviser, in the face of interference by the finance minister or even the prime minister’s office.
Weekly round-up of news from the world of work.
The RBI’s statement, the first after the Budget, carries forward the Budget’s message of fiscal discipline and consolidation.
The RBI is opting to wait for more clarity on inflation trends and on how a radical crackdown on “black money” is impacting economic growth.
As the second round of tripartite talks failed to put an end to the over three-month-long economic blockade, a look at the lives of the people who are most impacted.
There’s very little sensitivity being shown in forcefully shoving India’s small traders and producers into the formal economy. To what extent will this affect the BJP’s support base?
If the monetary policy committee waits until April, it will have a better idea of demonetisation’s negative impact and a firmer grasp of global commodity price trends.
Given the imperious attitude of new leaders to institutions of the old order, the questioning of central bank independence is a given.
The Budget appears to be pro-poor and pro-business, but it fails to address the reforms actually needed to structurally transform the economy.
Proposed amendments to the IT Act and the RBI Act will exempt political parties from keeping records of donations made through electoral bonds.
The finance minister’s announcements on moving towards a more progressive direct tax structure and tax incentives for MSMEs are heartening.
The Budget does nothing to assure incomes for farmers, lift them out of indebtedness or protect them from natural calamities.
The Budget estimates of gross tax revenues for 2017-18 are the same as the revised estimates for 2016-17 – 11.3% of GDP.
Not only has the Budget failed to include measures to fix the damage caused by demonetisation, it also hasn’t taken advantage of the opportunities created.
Most party leaders think that the focus on digitalisation as a way to improve people’s material realities may be off the mark.
Expenditure announced does not seem to have any connection to what has worked (or not) in the past.
The dichotomy between the interest of finance capital and the needs of the social sector has never been starker.
Given the massive hit taken by informal workers after demonetisation, the Budget’s provisions for them are quite inadequate and will be seen as such.
Dealing with demonetisation aftereffects requires a fiscal and monetary boost, but the government appears to be in no mood to deliver it, for obvious reasons – the fiscal cushion that Narendra Modi’s brainwave was supposed to provide never materialised.
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.
Inflationary concerns aside, we also have to realise that fiscal deficits are always accompanied by trade deficits.
The government must announce fiscal measures to stimulate demand if it wishes to repair some of the damage it has willfully wreaked upon the economy via demonetisation.
In poll-bound Uttar Pradesh, politicians who were hoarding black money for campaign purposes found several loopholes to get around demonetisation.
The Centre needs to make up for the losses it has caused to those who already live in precarious, marginalised conditions.
The Reserve Bank also promised to review the weekly limit in the near future depending on the pace of remonetisation.
After demonetisation, the NDA government needs to get its affairs in order: starting from reviving private investment to delivering on social programmes.
The RBI must now revisit its blanket refusal to answer an RTI query on demonetisation and provide a proper reply in a fortnight’s time.
The political economist answers a range of questions on the note ban – painting a comprehensive picture of what demonetisation has done to democracy, agriculture, the ‘black economy’ and society.
As the major political parties gear up for the assembly polls, their source of funding remain a mystery.
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Cash rules critical parts of this supply chain: from farmer to yarn factory to yarn trader to power loom cloth manufacturer to wholesaler to retailer to consumer.
Professor Arun Kumar, who has researched extensively on the black economy in India, discusses demonetisation and the upcoming Union Budget.