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Modi should have chosen 'war gaming' over surgical strike on black money

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Ajey Lele
Ajey LeleNov 15, 2016 | 16:35

Modi should have chosen 'war gaming' over surgical strike on black money

Prime Minister Narendra Modi took a bold decision for sudden banning of Rs 500 and Rs 1,000 notes from circulation mainly to handle the issue of black money. This decision has been welcomed by many as a harsh, but well-meaning exercise.

Within the initial few days, looking at the rate of deposits in the banks (in the form of 500 and 1,000 rupee notes) clearly indicate that a good amount of money (both black and white) is likely to come in circulation.

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Also, over a period of time it is expected that people would start depending more on plastic money leading to more transparency in the financial system as a whole.

The flip side of this decision are the hardships faced by the common people with regards to getting new notes as well as coping with the dysfunctional ATM machines. People are expressing displeasure about the after-effects of such a decision. Unmanageable situations have been reported from some ATM booths and bank counters.

It is obvious that the government machinery is not fully prepared to address the challenge. One reason for this could be that in order to keep the secrecy about the decision, it was not possible to undertake any preparations on ground in advance.

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There is a significant amount of dependence on information technology-based applications for developing and running such simulation exercises. Credit: Reuters

Also, it appears that possibly the government was not able to read the enormity of problem in advance.Particularly, for Modi administration, which is technology savvy and very keen to use technology for the betterment of the governing system, it would have been ideal if they had used modern techniques of forecasting the future collateral damage.

Various problems which the commoners are facing today owing to the banning of currency notes could have been envisaged had the techniques of modelling and simulation been used to appreciate the pattern of disturbance such a decision could bring in.

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In short, Modi government should have "gamed" this decision much in advance (taking proper secrecy precautions). Armed forces all across the world are known to use the techniques of "war gaming" to appreciate and understand the possible moves of their opponents and plan their countermoves accordingly.

This is not considered a foolproof technique which provides all correct answers, but definitely one useful to understand future trends.

Today, such techniques are also finding their way as tools in various other fields, to assist decision making mechanisms. Beyond militaries, such techniques are finding their utility in social/economic/political sectors. They are also known by names like crisis gaming or politico-military gaming exercises. Some offshoots of such techniques are known as net assessment and risk assessment.

Also, scenario-building techniques do find utility towards political and economic decision making. There is a significant amount of dependence on information technology-based applications for developing and running such simulation exercises.

It is obvious that all the important people involved in deciding the banning of more than 85 per cent of currency notes which are in circulation must have discussed various probable challenges. However, mostly such deliberations emphasis on "what to do", but modelling and simulation or crisis gaming techniques tell us "how to do" it.

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It was essential for someone to apprise the government of the challenges the ATM chains would face with the introduction of Rs 2,000 notes. Also, "gaming" this situation in advance could have indentified the need for additional security guards for delivering money to various banks. It could have highlighted the problems various industries would face, including tourism. Maybe, suggestions could have emerged to allow accepting the old notes at national monuments from foreign nationals (like cost of the ticket could have been restricted to say Rs 500 only).

Today, when the government is proposing "surgical strikes" in various sectors, it is important to forecast the future much before such strikes. Some decisions have already been taken in various sectors and it is also possible to game them now based on the situation of the day (like what could be the future for Make in India).

Also, in order to judge the possibilities of what may happen if a particular decision is made in future, some gaming initiatives could be undertaken. For example, a politico-military game could be played involving various concerned ministries and agencies involved to predict the future, say, if hypothetically, India takes a decision to dump the Indus river water treaty or its No First Use (NFU) status when it comes to nuclear weapons.

What Modi government needs today is to invest in methods of analysis, such as modelling and simulation and gaming techniques, which are applicable to forecasting, taking quick policy decisions and suggesting appropriate policy modifications.

Finding reasons to understand why there are queues outside ATMs is not rocket science, but knowing in advance the possible outcomes could have helped in easing the situation. Possibly, a simple gaming exercise played among the various stakeholders could have highlighted the enormous challenges.

Last updated: November 15, 2016 | 16:36
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