An Academic Clairvoyant
The other day I read a report (Harvard talks back to hard work: Professor finds Modi’s election victory like a Bollywood blockbuster) in The Economic Times on the remarks made by Bhaskar Chakravorti, a Tufts University public policy professor, on Narendra Modi’s latest election victory. The report also contained comments about what the author considered a ‘policy failure’, namely demonetisation. The most intriguing comment on the effects of demonetisation that the professor made is, what I would consider, a rash and sweeping statement involving every Indian: “Every person living in India had to experience some form of dislocation or inconvenience.”
Bhaskar Chakravorti must be a clairvoyant, a person gifted with the ability to perceive matters beyond the range of ordinary perception or how could he know about the experiences of ‘every Indian’? Can he read the mind of others? Ever since the Indian government announced the cancellation of higher denomination banknotes, some ‘intellectuals’, here and abroad, opposed the move that was primarily an attempt by the government to identify people who hoard cash. Why should you hoard cash unless you are dishonest or corrupt? Why, in today’s world, should most of your liquid wealth be in your personal possession rather than in a bank? The most obvious motive of hoarding cash is to hide income and evade the tax net. Indeed, demonetisation should hurt the dishonest and the corrupt the most, those who do not pay tax despite earning a sizeable income, those who do not contribute to nation-building.
Admittedly, such a measure will cause some inconveniences to some people but to say that everyone has faced disruption is a blatant lie. Does a poor Indian need banknotes of Rs. 500 or Rs. 1000 on a regular basis? There are villagers in India who have never seen those notes. The lower denomination notes of up to Rs. 100 are adequate for their daily needs. A large section of the urban population, especially the younger generation, would face the least disruption because most of them can efficiently use the digital modes of payment. Yes, there are many Indians who can’t use digital payments, but those who have the most, those who carry large transactions are all well-equipped to do it! Even poorer people like this translator here can do with a little cash!! The government never said that it is aiming to have an entirely cashless economy, which is not possible any way. It was a measure to compel people to do with less cash so the corrupt can’t hoard cash and hide their wealth. I do not know why an honest man, especially those who have some education, would oppose it. But professors from the haloed institutions of the West, some intellectuals here, and many who opposes the central government had only negative things to say about the move. Shall we say that all these critics have some personal (vested?) interest in cash?
India reels under corruption and nepotism. Would this professor tell us if he has any ideas how to remove those ills? No, they won’t offer us any solution to the problems that this country faces. Only when some positives steps are taken, they would oppose it.
How would a relatively cashless economy restrain corruption, you may ask. The fact is when you do a digital transaction, you always leave a trail and the tax authorities can find it. If you and I exchange millions of rupees several times between us and do business, the government may not have any means to know about it unless we do the transactions through a bank. Professionals –doctors, lawyers — would ask for their fees to be paid in cash. Big purchases are made in cash. Bribes are paid in cash. Recently I visited a local court with someone who came from another country. What she saw at the court premises made her dumbfounded. Every payment needs to be paid in cash because things won’t move if you don’t pay bribes and no one would accept the bribe if you use a credit or a debit card to pay the bribe, would they? I asked a young lawyer, ‘What if I pay your fee using my credit card?’ The young man said, ‘Then your job won’t be done!’ That is the real India!
I don’t know if this Tufts university professor visits India. He needs to go to a government office, a police station or a court in India with a personal errand to understand the meaning of the word ‘inconvenience’! He should then remember that an Indian citizen faces it daily and perhaps feel ashamed to compare that daily harassment with the small ‘inconvenience’ of demonetisation that perturbed him so much.