On DeMo, yet another goal post change

FM counts benefits which happen to be different from original objectives

GN Bureau | June 1, 2017


#Finance Minister   #Finance Ministry   #Arun Jaitley   #Narendra Modi   #Demonetisation   #Economy  
  Arun Jaitley, union minister for finance, corporate affairs and defence, addressing a press conference on the achievements of the ministry of finance during 3 years of NDA government
Arun Jaitley, union minister for finance, corporate affairs and defence, addressing a press conference on the achievements of the ministry of finance during 3 years of NDA government


Some think there is only one way to score a bull’s eye, by hitting the bull’s eye. Then there are creative souls, who first shoot, and then draw a bull’s eye around the mark.
 
When it was announced, demonetisation was supposed to counter (a) black money, (b) terrorism, and (c) counterfeits. Prime minister Narendra Modi’s November 8 Address to the Nation does not mention the word ‘cashless’.
 
Addressing the press on the completion of three years of the NDA government, finance minister Arun Jaitley on Thursday counted three benefits of demonetisation: (a) increase in cashless transactions, (b) increase in the taxpayer base, and (c) the message that it’s not safe to have cash transactions.
 
Of course, the two benefits on the tax aspect (b and c) are part of the drive towards eliminating unaccounted money – but they could’ve been achieved without subjecting the 1.2 billion people to untold suffering. The first benefit, drive towards cashless transaction, is welcome, but again it did not need such grave push, and it is already petering out too.
 
Indeed, demonetisation is blamed for a slowing down of the economy: Wednesday’s CSO announcement put the GDP growth in the quarter ending in March 2017 at 6.1 – lowest in this government’s term. This is something many economists and opposition leaders including former prime minister Manmohan Singh had feared.
 
However, the government is not ready to believe. Jaitley told the press that some slowdown was visible even prior demonetisation. Since GDP growth rate in the previous quarter was a healthy 7.0, it would need some torture of selective data to find that slowdown – not to mention the explanation of the fact that this slowdown has been spoken of only now and not before.

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