Mea Culpa, I got it wrong, says note ban supporting editor

June 14, 2017 14:32

On November 8, 2016, when Prime Minister Narendra Modi announced his demonetisation, a loud chorus went up on both sides of the aisle.

The critics, who were mostly Modi-bashers, saw it as a disaster.

And the supporters, mostly pro-Modi, saw it as a masterstroke.

Eight months on the figures are in and the facts speak for themselves.

And it takes a bold man to admit he called it wrong.

R Jagannathan, editor of the right-leaning Swarajya magazine, bites the bullet in his latest article, and admits to getting it all wrong, after having supported demonetisation when it was announced.

'It is time for a mea culpa,' he writes. 'Now, and especially after the farmer agitations for loan waivers, I believe that the negative side of the ledger on demonetisation (DeMo) is larger than the positive. It has failed.'

Further, he says, 'the bottom line on DeMo, seven months after Modi announced that he was withdrawing the legal tender status of Rs 500 and Rs 1,000 notes from 8 November, is that the costs are outweighing the benefits. And the rising demand for fiscally ruinous farm loan waivers surely has a direct link to DeMo.'

There's a link between the growing farmers' protests and the note ban, he points out. 'It can also now be clearly said that DeMo was the last straw that broke the farmer's back, leading to a cascade of farmer protests and political demands for loan waivers.

'DeMo will damage the fisc like nothing else before this. Two consecutive droughts did not do as much damage as DeMo. All the fiscal prudence shown by the Modi government in the last three years will be washed away now in one huge burst of state government populism.'

In conclusion, Jagannathan notes: 'It is great to be thought of as a bold leader who can take tough decisions to break the back of black money. But it is not so great to go about it in a ham-handed way and breaking the back of the Indian economy in the process.'

You can read his column here.

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