ArpitGarg's Weblog

A lot of us would be discussing the unprecedented move in recent Indian politics. I was born in mid 80’s and have not been witness to a full majority PM. Now I know what decisions look like when majority Govt is in power.

I would like to discuss the political aspect of Modi’s move to illegalize 500/100 currency notes. There are profound economic and social aspects too, but will discuss those some other time. Of late Modi was being questioned about 15lac rupees he promised to put in every citizens account. Given the man of high integrity that Modi has created his persona on, it was becoming embarrassing for him and his party. ‘Jumla’ excuse was falling short.

What Modi has done to answer all of the criticism is affirmative action. It’s not that Modi never took steps previously to curb black money. Jan-Dhan, Direct Debit, Income declaration, were some of the steps he took. But they were not that perceptible to general public, who voted for Modi in huge numbers in 2014. This current decision will be perceptible to all and sundry. Most of the voters will have to go to the bank to exchange old 500/1000 note. All of us will know that Modi has done something regarding black money. It is a perceptible action. No more talk of 15lac.

Hence I call it a political master stroke. With the Trump win today, the bull run of outsiders continues unabated, resulting in such out of the box decisions.

I personally feel that Govt. will recover much more than the 15lac per person that Modi promised. By the time the dust settles on 31st Dec, even a 10% non-return of currency notes, leads to huge profits for the Govt. Each note not returned due to it being black money, means that much earning for the Govt. I would like to see RBI calculations in Jan. Knowing Modi, we know those figures will for sure be made public.

Modi was given a presidential mandate, and his performance equals that.