When on November 8 this year, PM Narendra Modi announced that midnight onwards, the notes Rs 500 and Rs 1,000 would no longer have legal tender, there was shock and awe among the entire Indian chatterati, and utter despair among the pooer sections. But demonetisation was pitched as a moral crusade which must be undertaken to fight against corruption and black money.
However, the decision to demonetise has been branded as "despotic" by the economics Nobel laureate Amartya Sen and a case of "monumental mismanagement, organised loot and legalised plunder" by Dr Manmohan Singh, former prime minister and a noted economist who has been a former RBI governor. Moreover, Kaushik Basu, former chief economist at the World Bank too has expressed his concern over demonetisation in no uncertain terms.
In addition, Kenneth Rogoff, the globally famous Harvard-based cash scourge and champion of plastic/digital currency, too, has said that he has no idea how demonetisation would play out in India. Larry Summers, former US treasury secretary, has said that Modi's bold move "may not have lasting benefits". He also said "India has put in place the most sweeping change in currency policy in the world in decades", which in non-polite terminology means that this is a train-wreck scripted by the prime minister of the country.
However, in order to take on these world-renowned economists and money men, the Rashtriya Swayamsevak Sangh (RSS) decided to field their own financial expert, aka S Gurumurthy! The co-convener of Swadeshi Jagaran Manch and a noted RSS ideologue, Gurumurthy has been at the forefront of the dissent against economic liberalism, advocating the "swadeshi" brand of economic protectionism for the longest.
It is extremely ironic, therefore, that S Gurumurthy is not only advocating PM Modi's demonetisation, but in fact was consulted during the decision-making process itself.
|S Gurumurthy speaks to India Today's Rahul Kanwal. [Photo: Screengrab]|
In an exclusive interview to India Today's Rahul Kanwal, Gurumurthy - a key member of the Sangh backed Vivekananda Foundation - said that even the Rs 2,000 notes would be eventually phased out in the years to come.
What pray then was the logic behind demonetisation? Wasn't it to defeat black money in the first place? To defeat terrorism and corruption through the use of black money? To plug the use of counterfeit currency notes and the nefarious networks circulating them?
Gurumurthy tells India Today that the Rs 2,000 bills are like a "bridge" to meet the gap in cash, when 86 per cent of the cash liquidity has been sucked out of the system. Their eventual phasing out would be undertaken to keep faking them under check.
It is obvious that the point of demonetisation was never about either black money curb or fake currency bust, but in fact, it was undertaken to force all of India to switch to digital payments. This coercive step was taken despite mind-bogglingly humbling figures on banking reach, extent of smartphone and internet penetration, literacy issues as well as abysmal state of cybersecurity in India.
Yet, Gurumurthy seems to be brazening out all the coercion by saying that "nothing happens in India through persuasion which is why determined action by the government is justified".
In other words, Gurumurthy is saying that the slower, more participative and democratic process of parliamentary legislation is unsuitable for India, the world's largest democracy. Moreover, he's justifying state coercion on a move that every leading economist the world over, including Paul Krugman, another Nobel laureate, has trashed in every which way.
If the volte-face made by Gurumurthy on his economic standpoint - from a protectionist stance to a crazily and instantly cashless version of the economy - goes on to show that the rightwing in India has neither the locus standi, nor the brainpower to intellectually challenge the left-liberal schools of thought.
As historian Ramachandra Guha had said earlier, the idea of an Indian conservative intellectual would be only that, a good idea, with little substance to fall back on.