Terming demonetisation as a case study on how to get away with “dumb policies”, Congress MP Shashi Tharoor has said the drive could have been a sensible way of eliminating corruption but it was “disastrously” implemented by the government.
“The demonetisation drive was deeply ill-conceived, disastrously implemented and essentially not thought through at all. To this day it is a mystery to all of us why it was done and what benefits have actually come of it,” Tharoor said h yesterday.
Addressing a packed hall of New York University students for a lecture titled ‘The Current State of India’, Tharoor said demonetisation could have served an important long-term objective of eliminating corruption if the policy was well thought through and well implemented.
It, however, ended up causing an “enormous amount of disruption” and shaved at least one per cent of India’s GDP.
During the nearly two-hour long session, organised by the Student Wing of South Asia at NYU and the International Relations Society at the University, Tharoor addressed a wide variety of questions from the students, including on India’s economy, foreign policy, intolerance and the state of the country’s political parties.
“Demonetisation is a wonderful long-term objective and many of us would have wanted to support it. It is a sensible way of eliminating corruption in the long-term but you cannot do it overnight. You have to first build the foundation and infrastructure, you cannot build a penthouse if you haven’t build the foundation,” he said.
“It has been a disaster from start to finish. It was horrendously thought through because when you are demonetising 86 per cent of the country’s currency...you only printed four per cent to replace it,” Tharoor said.
“The extraordinary thing is how the government has gotten away with it. To my mind, this should one day be a case study of how you can get away with dumb policies,” he said.
India was the fastest growing economy in the world but “the disaster of demonetisation” has put it behind China again, with the International Monetary Fund scaling down India’s growth estimate.
He added that the drive was aimed at targeting black money but the “creative black money people are better at laundering money than the government” had been in making policies to stop it.
“One sad possibility is that in their drive against corruption they have created new forms of corruption. There is nothing done against the sources of black money,” the 60-year-old Congress MP said.
Criticising Prime Minister Narendra Modi government’s push to create a cashless economy following the demonetisation policy, Tharoor said about 92 per cent of all retail outlets in India don’t have a card reader.
“How do you suddenly overnight go into the culture of cashlessness. People don’t have the culture of doing this. The digital infrastructure in the country is woeful,” he said.
Citing French Queen Marie Antoinette’s infamous line of “if they don’t have bread, let them cake”, Tharoor said the push to cashless economy is akin to asking people to use plastic if they do not have cash.