Little evidence that demonetisation succeeded in combating corruption: New York Times
�Two months after the Indian government abruptly decided to swap the most widely used currency notes for new bills, the economy is suffering,� The Times said.
There is little evidence that the demonetisation has succeeded in combating corruption or that it will forestall future bad behaviour once more cash becomes available, the New York Times has said in its latest hard-hitting editorial criticising Prime Minister Narendra Modi’s move to withdraw 86% of the currency on November 8.
The daily said in an editorial on Monday that there was little evidence that it had identified black money hoarders or curbed graft in the country.
“Two months after the Indian government abruptly decided to swap the most widely used currency notes for new bills, the economy is suffering,” The Times said. It added that the manufacturing sector is contracting; real estate and car sales are down; and farm workers, shopkeepers and other Indians report that a shortage of cash has made life increasingly difficult.
“The government had said that people bringing more than 250,000 rupees ($3,660) of the old notes to banks would have to show that they had paid taxes owed on the money. Because of those rules, officials had expected that a lot of black money would never make it back to banks. Yet local news outlets are reporting that Indians have successfully deposited the vast majority of old notes,” the editorial said.
“That suggests that either there wasn’t as much black money out there as the government claimed or that tax cheats found a way to deposit their hoards of cash without attracting the government’s attention, perhaps with the help of money launderers,” the editorial further pointed out.