One would assume that an economic decision as important as de-monetization was based on, and is driven by, evidence and strong data.
One would assume that an economic decision as important as de-monetization was based on, and is driven by, evidence and strong data. It is however clearly appearing that this decision has been taken without any robust assessment of the proportion of black money held in cash, the quantum of notes with the public, and the number of notes actually in circulation. Even political decisions such as this one have to be taken in a scientific manner. This decision was so secret, and the decision making group so exclusive, that we might never know the basis for the decision. However, even during the very challenging and complex process of implementation , it is clear that the Government is in a knee jerk decision making mode consistently ignoring the use of evidence to implement its own flawed policy.
The policy of de-monetization has clearly failed to meet its initial objectives. What is unforgivably worse is the pain and inconvenience caused to the entire citizenry due to a complete failure to take data, facts, and capacities into consideration. When the Government knew that it is plugging out 15.3 trillion rupees from the economy, it obviously refrained from assessing the number of days it would take to pour the equivalent quantum of currency back into the system, given the finite number of printing presses in operation. Clearly no calculated logic was applied in the Prime Minister declaring that the situation would resolve itself by the 30th December 2016, when even the most conservative estimates show that the process would take up to 4 months even when all goes well.
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India has historically proven to be a country geared to implementing grand one time initiatives with skill and efficiency. A constitutional authority tasked with the critical responsibility of conducting fair and free elections every 5 years invests onerous amounts of time in scheduling poll dates, demarcating poll booths and fixing responsibilities on over 15 lakh officials based on a universe of factual information and data points. This is done with utmost precision to ensure that the process of voting takes place as plan without causing any duress to citizens. A decision like de-monetization that affects every single citizen of the country indicates not even a fraction of such discipline in its design and implementation.
In the context of de-monetization, as per the Government’s own admission it was unaware of the fact that nearly 50% of the ATMs in the country were not functional as of 8th November 2016. This is in addition to the consequences of the fact that 80% of the ATMs were located in urban, semi urban and peri urban areas.
Though the Government takes great pride in attributing the notification of nearly 60 circulars on de-monetization to a “responsive” administration, the truth is that this is a reflection of the complete absence of clarity in where they were heading.
Even though the Government did not base its own policy decisions on publicly available evidence, it continues to distance itself from its use even to evaluate progress and monitor implementation. Though the State and its institutions are duty bound to report on the impact, including unintended damages caused by its policy, there has been no official release made by Government on the impact of de-monetization in curbing corruption and eradicating terrorism. The drastic reduction in the public stature of the Reserve Bank of India by appearing complicit with the intentions of Government is also worrying. The RBI has resorted to making minutes of its board meetings secret citing “protection of the country’s security and integrity”. Such a move has not taken place in any respectable Central Bank in the world however deep a crisis its economy be in. Transparency in the process of decision making, especially of matters stated to be of a greater public good, is not an indulgence. It is a right.
Tools of thought and convenience, not evidence, are being used by the Government to evaluate success. The leaders and policy makers are busy building a discourse of convenience.
This is also reflected in the pitiable condition of opposition politics. Parties opposing this policy have not provided a platform for citizens to question and critique the dominant narrative by any fact based substantial counter narrative. A lot more than loud threats and puns in public speeches are required for building an effective mobilization against a policy that is turning to use of emotional connections like nationalism in order to suppress opposition and dissent.
People are suffering a range of consequences from this move- from death, to loss of livelihoods of agricultural labourers and migrant workers and enterprise shocks. But still the palpable reaction of
people is that of patience and hope. A vague carrot of poetic justice is being subtly communicated to the people, that the stick will be used on the affluent and corrupt and the fruits will reach the empty bank accounts of the poor.
The government’s ability to manipulate multiple streams of opinion creation, and the complete absence of a systematic and institutionalized mechanism for generation of research, has led to the indiscriminate use of a series of incorrect assumptions and promises by the government in its aim to propel a wishful narrative.
For all the talk on evidence based policy, it is telling that the current scenario of de-monetization is playing to the philosophy of policy based evidence. Beyond the crisis and shock of de-monetization, the recognition of an elected Government’s ability to craft, manage and dominate a discourse is a worrying sign for any rational policy making framework, and indeed for democracy itself.
By Rakshita Swamy