Did RBI annual report nail the government?

With the news that 99.3 percent of the demonetised notes of the denomination of Rs 500 and Rs 1000, the daggers are out at every nook and corner of this vast country. The draconian move by the Narendra Modi-led government came with a logic that it would help eradicate the hordes of black money that country has but the Reserve Bank of India’s (RBI) annual report says just the opposite.

Now let’s have a reality check on what we achieved through the process that was suddenly rolled out on 8 November 2016 at 8 pm sharp.

More than hundred people lost their lives due to paucity of cash countrywide for weeks after the demonetisation. The haste in which government dished out the process actually divided the country in terms of opinion. Many were of the opinion that it would actually do good to the economy but very few knew that it won’t serve the purpose that the government spelt out.

The Gross Domestic Product was wiped out by one percent which did cost 1.5 million jobs and failed to curb the black wealth in circulation, according to a report in The Guardian.

If former finance minister P Chidambaram is believed, he also said that the country paid a ‘huge price’ for the hastily rolled out demonetisation. “Indian economy lost 1.5% of GDP in terms of growth,” a tweet from his official handle read. “That alone was a loss of Rs 2.25 lakh crore (2.25tn) a year. Over 100 lives were lost. 15 crore [150m] daily wage earners lost their livelihood for several weeks. Thousands of SME units were shut down. Lakhs [hundreds of thousands] of jobs were destroyed,” the former finance minister said.

Though the draconian move achieved a little bit by increasing digital transactions, still the purpose for which the call was taken did faulter badly.

However, it proved one thing beyond doubt that government had no clue how to tackle the situation soon after announcing the ‘note ban’. The fact that the government made alterations of cash withdrawal and deposit limits 126 times in 43 days is a testimony of the government’s cluelessness regarding the issue.

Now, after almost two years, when the central bank came out with its annual report on Wednesday, it clearly didn’t praise the move and the dispensation is tight-lipped about the issue and hasn’t offered an official reaction to that. Are they preparing for a befitting answer to counter the opposition’s criticism or are they looking up to few experts to talk on their favour and dilute it as they have been doing for more than four years now?