With the election year is approaching, RBI’s report on demonetisation released last week, literally opened Pandora’s Box for the ruling Bharatiya Janata Party.
When the Prime Minister Narendra Modi announced the drive on one fine evening in November 2016, the world suddenly become upside down for many families in the country.
And what followed it was sheer arrogance of the government that ran a narrative that the drive was primarily meant to weed out black money from the system.
After one and half year, the very government is now on a sticky wicket, as the RBI reported that 99.3 % of intended money returned to the system and the loss was mere 13,000 crores.
And, the government swiftly shifted its goalpost from black money to making people tax-complaint in the new system.
Even though the government still claims that the drive was successful, not a single minister is out in the public arena to defend the drive.
Obviously, Demonetisation is a historic blunder by Narendra Modi-led Centre and the reverberation of the report will be more heard during 2019 Elections. The government knows that demonetisation was a big failure.
The RBI report itself was released quietly, and initially only a few government spokespersons tried to defend it once the report was released.
While the RBI’s own report is already creating ripples, another report prepared by Parliamentary Committee will pave way for bigger tsunami in the country for the ruling class once it allowed see the light of the day.
Due to pressure from the BJP members, it has been forced to remain in shelve, but the opposition will not allow it to remain in the government’s lockers forever as it will be brahmastra for them during 2019 Elections.
Justifications about the real benefits of demonetisation – ranging from a cash less (or less cash) economy to hitting terror networks have also proven to be far-fetched. The RBI report shows that people are again keeping a lot of their savings in cash. Digital transactions have gone up – but hardly enough to justify a drastic measures as demonetisation which slowed the economy.
Even though growth is now recovering from the disruptions of the past two years, and this government has actually taken a number of significant economic reforms which will help in the long term – GST and the passing of the Insolvency and Bankruptcy Code (IBC) – being the two biggest, people will think that Modi government will always be remembered for this ill thought out and ill planned demonetisation for a very long time.
For BJP, it will be unwise to deem that RBI’s report and the pending Parliamentary Report on demonetisation could not affect their political aspirations in 2019. Only time will tell how much the historic blunder will plunder’s BJP’s luck in 2019.