I seriously doubt it was nothing but and exercise to deprive all political parties from utilizing there unaccounted money in UP elections except BJP. That is the one big agenda behind all this I suppose. What do you think ??
That was the politics behind it, of course. But there was also Class 6 pass economics involved, and a sycophantic Finance Minister who cannot win an election to save his life.
I did, most dutifully, and I have the following two comments to offer, which I shall put in different posts.
First, Bhalla has never made any bones of being a contrarian, and of being seized of a sense of grievance at being upstaged by the Amartya Sen school, the supposedly official economists, more or less aligned with Manmohan Singh. But that is a personal reflection, which merely suggests that he earlier discounted silver linings and looked for the cloud, and now ignores any cloud and looks for silver linings.
The defect with his analysis is that he addresses growth, and not poverty. If growth remains unaffected, the poor are bound to benefit - trickle-down re-packaged, in spite of its embarrassing failures under both Thatcher and Reagan. But that is not the point by itself. I was pointing to the rotten implementation; demonetisation by itself has some huge advantages in terms of currency security. Demonetisation is not and was never the problem; its faulty implementation was. It was the further pauperisation of the poor, and the most vulnerable sections of society. I have no quarrel with Dr. Bhalla, although if you wish, I can show you a contradictory analysis from the same M1, M2 point of view. I have a major quarrel with the RBI, with the Finance Minister and with the Prime Minister, in increasing order of seriousness.
As for my second point, during the reign of Philip II, the father of Alexander III the Great, he was seriously annoyed by the obduracy of the Spartans, and sent an ambassador to read them the riot act. The Macedonian ambassador duly went across and gave the ephors and the assembly a dressing down. If, he said, his sovereign were to cross the Isthmus of Corinth, and descend upon Sparta, woe betide Sparta. It would be a lesson as salutary as the one he had taught the other Greek cities.
At the end, he demanded their response.
The Spartans, being Lakonian, have given the English language the word 'laconic' and with very good cause. After a short pause, one of the ephors stood, and answered with just one word.
"If."
Read on, for Dr. Bhalla's punch-line. His words, not mine.
But, if other policy measures to reform India are not forthcoming (decline in personal income tax rates to discourage tax evasion, elimination of stamp duty and long-term tax rates on property, a clampdown on the extortion power of tax officials, and reform of election funding), then history will view demonetisation as a colossal failure of thought and reform. It would be so unlike PM Modi to stop here, and I am not betting that he will.
