After PM Narendra Modi took a dig at Harvard University alumni during his election campaign, the university has responded with an insightful critique of demonetisation by looking at it in the context of the BJP’s resounding electoral victory in the recently concluded state elections. The article, titled ‘Early Lessons from India’s Demonetization Experiment’, authored by Bhaskar Chakravorti, was published in Harvard Business Reviewon March 14. Chakravorti, a public policy professor at Tufts University, was one of the first critics of demonetisation. In a paper published on December 14, 2016, in Harvard Business Review, Chakravorti had called demonetisation a “case study in poor policy and even poorer execution. Unfortunately, it is also the poor that bear the greatest burden.”
In his latest paper, Chakravorti says: “Four months passed. The country emerged with few obvious scars. Although the impact on corruption remains to be seen, Prime Minister Narendra Modi’s government was rewarded with victory in mid-term state-level elections, seen as a referendum on its unprecedented action. Short of any singing, dancing, and costume changes, this sequence could have been taken from Bollywood, a movie industry widely known for its fantastical flights of fancy.”
To his merit, Chakravorti hasn’t just commented on BJP’s electoral victories but also sought to analyse how demonetisation played out on the minds of the Indian voter who gave an overwhelming majority to a party led by Modi. After all, another Harvard luminary Amartya Sen had described Modi’s move as a “complex manifestation of authoritarianism” that “declared all Indians as crooks”.
Chakravorti makes a point that demonetisation hasn’t really helped curb corruption that was one of the prime objectives of declaring 86 per cent of all Indian currency invalid. The article states that Indians with black money found ingenious ways of putting back their money into banks, irrespective of whether it was illegitimate or not. His argument is as follows: Corrupt people don’t generally hold their wealth in cash. Read more