India: Modi wins battle for demonetisation — What Next?

by N.S.Venkataraman

( February 6, 2017, Chennai, Sri Lanka Guardian ) When  Indian Prime Minister Narendra Modi announced demonetization on 8thNovember,2016, entire country was caught unaware and  was  shocked, not knowing what would be the outcome.  Many critics predicted that  the demonetization would destabilize the economy ,lead to  loss of jobs and there would be riot.

Several international journals and critics were also surprised  that  the Prime Minister of a large populated country like India could take such a bold  and massive decision, with 30% of  population of the country consisting of daily wage earners  or belonging to lower income group and 80% of the transaction in the country being carried out by cash. The economists and political observers across the world have been following the events in India with great interest and scrutiny.

Now, nearly three months after the demonetization, things have become nearly normal in the country and the doom sayers are eating their words. No riots or serious disturbances took place anywhere, reflecting the fact that majority of  common man welcomed the initiative of Prime Minister Modi, inspite of some inconvenience experienced by them.

What is noteworthy is the fact that common man in India have been hoping against hope that any Prime Minister would take some strong steps to curb black money and wipe out corruption in the country. People believed that Modi’s objective in ordering demonetization was positive and praiseworthy and they further thought that  Modi’s promises are genuine.

Many impartial observers across the world now wonder as to whether any other Prime Minister in India or government in any other developing country could have issued such massive demonetization order and survived the wrath of the people, who were subjected to considerable hardships due to lack of cash for transaction. Prime Minister Modi has come out of the acid test, winning admiration all round.

Challenge before Modi :

Prime Minister Modi has been repeatedly saying that the demonetization step is  only the first step in his onslaught against corruption and black money in the country.

People have, by and large,  accepted this statement at face value and have supported him. People are now looking forward to know as to what further   step Modi  would initiate to take his  anti corruption  drive  to  the logical end.

The opposition parties and pledged critics of Modi are now saying that the demonetization will not drive out black money and black money again would start generating and Modi cannot stop it.  Modi has to  prove his critics wrong and people want him to prove it effectively.

Obviously, people are in a hurry to see the results of demonetization. They want corrupt people to be hauled up and punished effectively to create fear amongst the corrupt and dishonest individuals and groups.

The problem for  Modi  is that the government machinery at his disposal is itself largely corrupt. This has become fully evident when it was found during the peak period  of demonetization exercise that several bank officials themselves colluded with the black money holders and  helped them in converting black money into white money.  Some of them have been caught but more may remain undetected so far.

Further problem for Modi is the slow progress of judicial proceedings in dealing with corruption cases and the capability of the corrupt people and black money holders to circumvent the law or misinterpret the law with the help of highly skilled lawyers , some of whom are politicians themselves.

The entire country including the critics and pledged admirers are closely watching the next step of Modi.

The anxiety of the  anti corruption crusaders is whether the challenges before Modi in continuing his battle against corruption would become too formidable for him to tackle.

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