Noted US-based economist T N Srinivasan has cast serious doubts on the efficacy of the cash ban move, saying it will not help in fighting the menace of blackmoney. Srinivasan of Yale University, who at one point taught RBI Governor Urjit Patel, emphasised that the government needs to come out with a “well thought-out” policy to combat corruption.
“There was and is no well thought-out anti-corruption policy to combat corruption. Rooting out corruption and increasing transparency through a policy such as demonetisation as implemented in India are unlikely to come about,” Srinivasan, Samuel C Park Jr Professor Emeritus of Economics, Yale University, told PTI.
He further said, “Although understandably, the demonetisation was not pre-announced, the government’s implementation showed extreme unpreparedness and lack of thought.” Srinivasan also pointed out that the government chose to cancel notes of denomination Rs 500 and Rs 1,000, but it did not clearly come out with the objectives.
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“With all the technical manpower it had in the Central Statistics Office (CSO) and the Department of Economic Affairs in the Ministry of Finance, the government did not issue a white paper clearly laying out the objectives of demonetization,” he said.
Prime Minister Narendra Modi on November 8 announced the scrapping of the notes, pulling out 86 per cent of the total currency in circulation.