CHENNAI: Explaining that the current economic situation did not warrant a major operation like demonetisation, Sanjaya Baru, former Advisor to then Prime Minister Manmohan Singh, described the note ban exercise as “political intervention in the economic system.”
Delivering a lecture on “Demonetisation: a gamble or game changer” here on Sunday, he noted that it was a preemptive action to take the opposition off guard ahead of the crucial Assembly polls in UP and Punjab. “Demonetisation is a political intervention in the economic system. It is aimed to deprive the opposition of access to cash in the run-up to elections in UP and Punjab,” he told the gathering.
He said demonetisation suddenly hit the political parties that accumulated cash. “They have been demonetised now,” he noted.
The second thing about demonetisation to be noted is the generation of a certain “class consciousness” between the wealthy and the poor.
According to Baru, Prime Minister Narendra Modi, who is, by and large, known as a pro-rich leader in the northern part of the country, is able to portray himself as a man for the poor through the demonetisation exercise, despite the visible unhappiness among the rich.
Affirming that demonetisation is an economic gamble and a political game changer, he stated the real test of the outcome is the polls in UP and Punjab.
Recalling the frailty of the economy that prevailed in the early 90’s which eventually led to the reforms, Baru who had penned the popular book The Accidental Prime Minister, said, “We have never had a situation where demonetisation could be done and the withdrawal of legal tender character of high denomination notes has “shaken the well functioning economy.”