Ten years ago, Indians were asked to surrender the use of their own money with just four hours' notice. It was a shock-and-awe operation. At 8.00 pm on 8 November 2016, Prime Minister Narendra Modi announced on television that existing Rs 500 and Rs 1,000 notes would cease to be legal tender at midnight. They represented about 86 per cent of the currency in circulation. Holders could deposit them in banks, but replacement notes were scarce.

The system was not ready. Many ATMs were yet to be recalibrated. The right to spend their own savings had effectively been suspended.

The hardship was immediate: long queues, strict withdrawal limits and a scarcity of notes. Workers lost wages while waiting outside banks. Small businesses struggled to pay suppliers and employees. Farmers needed cash for inputs and labour. A Rs 2,000 note, when available, was often difficult to use because nobody had change. Bank employees worked late into the night and for several weeks to administer a decision for which the system was inadequately prepared.

Yet many people enduring the suffering supported the exercise. They believed that somewhere, wealthy tax evaders were suffering far greater losses. Their inconvenience seemed a reasonable contribution to a national campaign against black money. Public trust in the prime minister's decision was very high.

Ten years later, however, we still do not have an honest accounting of what their sacrifice accomplished.

The original announcement identified black money, corruption, counterfeit currency and terrorism as its targets. Subsequently, however, the objectives kept shifting to greater tax compliance, formalisation and digital payments. Each offered a different standard of success. This expanding and changing list made it easier to claim achievement without establishing whether the original promises had been fulfilled.

The most dramatic expectation was that large hoards of illicit cash would become worthless because their owners would dare not deposit them.

In........

© National Herald