Demonetisation of high currency notes, announced in the late evening of November 8 with the aim of freezing the moment, might have come as a stunning shock to those with piles of unaccounted money, but it has received an enthusiastic endorsement from citizens at large.
With economic growth, a `500 note had become familiar money in the hands of the common man, not the poor. Thousands of people queued up at banks to exchange even small amounts of currency for their running needs. On the whole, the transformative step has been seen by the public as a convincing measure of the Narendra Modi government against black money. Political critics have raised the question of inconvenience, which cannot be a standing argument. They have asked about the promise of “bringing back” illicit money hoarded in foreign banks by many Indians.
The demonetisation move is a total measure efficiently executed with flawless confidentiality. Informed Indians are impressed by the efficacy of governance shown by the regime in handling it. The new notes have a dozen design and security features that will make counterfeiting nearly impossible for a long time.
At the political level, the decision has demonstrated a combative boldness of the Prime Minister in dealing with matters directly linked to national interests and security in a country that had become used to a certain permissiveness about illicit money. Particularly during elections, demonetisation is a huge cleansing operation. Public perception is in its favour, and any insinuation that the move was attributable to the forthcoming Assembly elections does not hold water. In India, polls are so frequent that any major policy decision would appear to be proximate to some election somewhere.
Elimination of black money strengthens the cause of national security. Illicit money facilitates entry of dubious elements into the power structure, makes it easier for enemy agents to use the lure of money for their purposes and directly aids the funding of terrorists and drug trade. It was in the 1993 Mumbai train blasts that the collusion of Dawood Ibrahim with Pakistan’s ISI had been exposed. Since then, there had been a progressive use of black money/fake currency mix by Pakistani agencies in the proxy war with India. Black money made hawala transactions easy. With an effective curb on unaccounted money, our security agencies will be able to monitor unusual online communications and fund transfers that mask terror activity more effectively.
Black money and corruption hurt development by depriving the state of funds that would have gone into schemes. A clean economy restores faith in hard work, promotes social cohesion and adds to national pride. Demonetisation has cleaned up the slate, but anti-corruption agencies will have to stay alert.
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