Could Demonetisation Have Been Implemented Better?

The Opposition had its own axe to grind but some economists, industry and business leaders have expressed an opinion that demonetisation could have been better implemented. The media found in such a view the opportunity to settle scores with the Prime Minister and his government, which used the social media more than their services. However, there is all round support for all economic reforms carried out by the government of India led by Prime Minister Modi.

Unfortunately, there exists a lack of intimate knowledge of the working of the public services and their low morale under the UPA-I & II regime. The situation had turned so bad that no public servant could enter an office without the agents of corruption bringing him down on his knees. What was normal in matters of postings and appointments had become completely an open commercial system. People would remember the agreed price of Rs 10 Crores for the appointment of a Member of the Railway Board. Because the scandal came in the open, the minister had to quit.

But that was not the only instance, there were many more. Public Sector Banks’ Chairmen or Executive Directors or General Managers could not be appointed without the “blessings” of the minister and the approval of the centre of extra-constitutional authority or the Parallel Government, which created a huge Parallel Economy too. The Coalgate, CWG or 2G were no small incidents- they were manifestations of the culture of corruption in public service. It had crushed the morale of the public servants, who looked the other way when an airline was given 9000 crores of loans by the banks in violation of all the banking rules and regulations. Expecting such depressed public services to suddenly act contrary to that culture and respond to the transparency measure warmly was a bit too much.

The trust deficit between the public and politician was acknowledged by even the ministers of the UPA government. The public servants wait and watch to test the moral fibre of the politician, be it a Narendra Modi or someone else. It also needs to be taken into account that followers and party men of Narendra Modi sounded dissonance from day one, putting public servants on extra alert. What if the government goes? Used to err on the side of caution, public servants were averse to take risk or put their neck on the chopping block. The banking establishment knows the true colours of each and every ideology, leader, bureaucrat, middlemen, foreign network, influence and would take action after thorough scrutiny and consideration.

Besides, corruption was as much prevalent in the banking sector as in any other public service. One reason for corruption is the collapse of the system where the lowest worker came to arrogantly exercise the authority of the   competent authority under the law.

Because of corruption, appointment to a position carried the price tag. Hence, the employee had to recover that cost during his service. So, if a constable assigned the duty to catch a thief does not do so for a price, he is a bad implementer of the legitimate orders of the competent authority. This argument can be extended to all wings of the government: doctors, engineers, civil servants, police officers, uniformed services, judiciary etc. from top to the bottom.

Who could have implemented demonetisation without a big army of public servants of the highest integrity?

Some of them made mistakes but got caught. Others took little time to adept to the changed situation.

Attempt to resist and sabotage the reform were mounted but failed. More than hundreds of crores of currency were seized from individuals dealing in black money. The Reserve Bank of India (RBI) has yet to give details of the currency in the denomination of old 1000 & 500 rupee notes received back. It would be no surprise if the figures turn out to be more notes than printed by the RBI. A substantial number of fake currency might have been deposited in collusion with the dishonest bank managers. It needs to be noted that some bank managers and employees had the appetite for risk of punishment and arrest for indulging in such unlawful activities. It was because they had gone scot free on several occasions in the past with the blessings of their political godfathers.

Only a public servant knows from personal experience that in India of 2014 anybody practicing clean administration did so at the risk of getting isolated and hounded. In a public service involving field duty like police and taxation with 24×7 public interface, the honest public servant runs the risk to his life and security of his family.

Even if the public servants try to maintain integrity, the public thrust bribes into their pocket, first in a seductive manner and later with threats, which are reinforced by the superior authorities in the hierarchy.

An honest public servant does not get to see his boss or minister but a dishonest one shares drinks with them at the farm house of one of them. How long can such public servants survive? They can be harassed, their  family life can be ruined, their children’s education disrupted and their salary payments may be delayed for years because of frequent transfers from one accounts division to another. Unless the different accounts divisions are quick to issue necessary documents, the public servant can’t get his salary or travel expenses involved in moving from one station to another.

Will the Accountant General risk his career by going against the wishes of the political authority? It is ridiculous to even imagine such a thing.

The black economy and the parallel government it had run till May 2014, has reared its head in a few months and started black money transaction.

They are smug in the knowledge that 2019 may see a change due partly to opposition efforts, the disgruntled BJP members and foreign direct intervention.

The Congress Party, if it succeeds in 2019, will revive the UPA culture within a few days.

It needs to be emphasized that Rajiv Gandhi had de-licenced industries in 1985 to the extent of 40%. It meant no licence was required under the industries (Development & Regulation) Act to start any industry included in the schedule-I of the Act. What the UPA government did was exactly the opposite- it revived the licence raj in other areas like mining. It reaped huge illegal benefits, some of them acquired the status of scams such as CWG, Coalgate, 2G, Adarsh Housing Society, S-Band and many other scandals.

Could Prime Minister Narendra Modi risk the sabotage of the policy by consulting anybody other than those who needed to know? Similarly, could implementation be better with the cooperation of a banking establishment yet to turn firmly honest in management of public funds without wasting any on NPAs or bad loans. Loans turn bad because bankers fail to do their duty honestly and then try to hoodwink the people by coining terms like Non-Performing Assets (NPAs).

Prime Minister Narendra Modi moved cautiously and ensured strict implementation of demonetisation with the minimum discomfort to the people and achieved remarkable success. It has yielded rich political and security dividends and firmly established faith in the transparent functioning of the Narendra Modi government, a complete contrast to the UPA-I & II government.


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