Done Right Demonetisation Will Prove Early Election

If the execution of the decision goes well it will be like Modi won the 2019 election before it was even held, with his opponents like Mamata and Kejri utterly vanquished.

It has been a big, bold move. It had to be done at some point if the Indian rupee was ever going to become a credible global currency, like the dollar, euro, yen.

12 lakh crores have been deposited into the banks. That is massive.

Gold is another major drag. And it is cultural. That is so much capital sucked out of the economy.

As for the anti corruption drive I am sure Modi knows this can only be the first step. Benaami property has to be one of his New Year resolutions.

T N Sheshan cleaned up elections in India. Modi is out to show corruption can be controlled across India.

Anti corruption moves are indispensable to robust economic growth rates. Done right this will catapult India to double digit growth rates early next decade.

The biggest concern of course is the cash crunch. I have noticed Ambani is giving three months free on his new data network. There ought to be a massive push for digital money. They do it in Kenya. It is called mPesa.

America should similarly recall the 100 dollar bill to empty the wallets of the druglords around the world.

Modi's Demonetisation: Differing Opinions

India's demonetisation: 'Modi didn't think of the poor' 

In a strong editorial, the Economist said Modi's "perceived need for secrecy (to take cash-hoarders by surprise) fed into the innate sense he has of his own infallibility and his misplaced faith in his technocratic skills."

Kaushik Basu, a former chief economist at the World Bank, said in an op-ed in the New York Times that demonetisation was likely to cause the economy to nosedive. "Demonetization may have been well-intentioned, but it was a major mistake," Basu wrote. "The government should reverse it."

Assessing the impact of demonetisation four weeks later, TN Ninan, the editor of the Business Standard, wrote that Modi's move "at this stage looks like a bad idea, badly executed on the basis of some half-baked notions."