PM's "Great Leap" Backwards
The former Chairman of the Communist Party of China, Mao Zedong's "Great Leap" led his nation into the Great Famine between 1959 and 1961. There are varying estimates of the death caused by the famine. One estimate puts it at 36 million.
In a similar way, our equivalent Chairman, called here PM has taken the country on an Indian "Great Leap". It is termed "Demonetisation" and the ostensible purpose is to purge the Nation of black money.
The PM cannot be expected to know the intricacies of national finance, even though he had four terms as CM of Gujarat, but one would certainly expect him to ask a few questions to understand the proposals before he gives the ‘go ahead’.
It does not require much acumen to see that demonetisation will not achieve anything, let alone reducing black money.
Firstly, the vast proportion of black money is in foreign accounts.
Secondly it is in properties.
Thirdly, political parties would / should know who has it, simply because they receive contributions in cash from those who have it.
Yet, he took the risk and responsibility all on himself. He tried to paint a picture of himself as a patriotic fighter against black money.
Hence, the sudden announcement on TV and a speech full of rhetoric.
There was no need at all for any secrecy. In fact, if sufficient time had been given for exchanging the notes those with unaccounted wealth would have become complacent and exchanged huge sums. These could easily be tracked and the culprits caught.
Even if the decision itself is a monumental blunder, the management of demonetisation is even worse.
How many victims would Chairman Modi claim as did the unfortunate victims of Chairman Mao’s – only time will tell.
One can only pray for the souls who would die of starvation and other causes directly as a result of ill-advised and ill-thought decision.
I am reading a book titled, “On the Psychology of Military Incompetence” by Norman Dixon. Indian demonetisation in 2016 would have given him interesting material if he wished to write on political and bureaucratic incompetence!
Here is a view point as expressed in the ‘Economic Times’ which, echoes my sentiments on the issue.