Home Business Politics As demonetisation doubts rise, so does Uday Kotak’s voice

As demonetisation doubts rise, so does Uday Kotak’s voice

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Criticism of the implementation of the demonetisation — more or less silenced for two years by the fear of retribution — is now trickling in from business folk who had been considered the Narendra Modi government’s most ardent supporters.

The latest to speak out is Uday Kotak, banker extraordinaire and corporate governance expert, who was recently asked by the government to head a group of independent experts to sort out the mess at shadow bank entity ILFS.

Kotak has now said the outcome of the demonetisation programme would have been “significantly better” had it been planned well.

“I think we would have had significantly better outcomes if we had just thought about simple things. If you are taking out Rs 500 and Rs 1,000 notes, why would you introduce Rs 2,000 notes?” PTI quoted Kotak as saying at former chief economic adviser Arvind Subramanian’s book launch here over the weekend.

The same basic inconsistency that underpinned Modi’s surgical strike against black money was first pointed out by Kenneth Rogoff, former IMF economist and currently Thomas D. Cabot professor of public policy and professor of economics at Harvard University.

Rogoff had stirred a cauldron of ideas a couple of years ago with his best-selling book, The Curse of Cash, in which he urged the US government to scrap the $100 bill immediately and then gradually phase out the $50 and $20 bills, turning the world’s most advanced economy into a cashless society.

But Rogoff, who had never intended middle-income countries like India to shred their high-denomination notice, had written in a blog on November 17, 2016, just days after Modi’s shock announcement: “India’s approach is radically different, in two fundamental ways. First, I argue for a very gradual phase-out, in which citizens would have up to seven years to exchange their currency, but with the exchange made less convenient over time…. https://www.telegraphindia.com/india/as-demonetisation-doubts-rise-so-does-modi-s-critics-voice/cid/1678305?ref=top-stories_home-template

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