In a stinging criticism, a leading US daily has said the “atrociously planned and executed” demonetisation in India has made people’s life increasingly difficult with “little evidence” that Prime Minister Narendra Modi’s move succeeded in combating corruption and black money.
The New York Times editorial board’s critical piece stated that due to the currency swap, the Indian economy is “suffering”.
“There is little evidence that the currency swap has succeeded in combating corruption or that it will forestall future bad behaviour once more cash becomes available,” the daily said in the editorial titled ‘The cost of India’s man-made currency crisis’.
“Two months after the Indian government abruptly decided to swap the most widely used currency notes for new bills, the economy is suffering. 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,” it said.
“…The swap was atrociously planned and executed. Indians had to line up for hours outside banks to deposit and withdraw cash. New notes have been in short supply because the government did not print enough of them in advance. The cash crunch has been worst in small towns and rural areas,” the Times said.
The daily asserted that no economy can lose that much currency in a few weeks without creating major hardship and certainly not one like that of India, where cash is “used for about 98 per cent of consumer transactions by volume”.
“And while a growing number of people have debit cards and cellphones that can be used to transfer money, most merchants are not set up to accept such electronic payments,” it said.
“Many Indians have said that they are willing to tolerate some pain in the fight against corruption. But their patience won’t last if the cash crunch continues and the swap does little to reduce corruption and tax evasion, as many economists predict,” said the editorial.