When Indian Prime Minister Narendra Modi announced demonetisation on November 8, 2016, the entire country was caught unaware and was shocked, not knowing what would be the outcome. Many critics predicted that demonetisation would destabilise the economy, lead to loss of jobs and there would be riots.
Several international journals and critics were also surprised that the Prime Minister of a large populated country like India could take such a bold decision, with 30 per cent of the country’s population consisting of daily wage earners or belonging to lower income group and 80 per cent of transactions in the country being carried out in cash. Economists and political observers across the world have been following the events in India with great interest and scrutiny.
Now, three months after demonetisation, things have become nearly normal in the country and the doomsayers are eating their words. No riots or serious disturbances took place anywhere, reflecting the fact that majority of the common man welcomed the initiative of Prime Minister Modi, in spite of the inconvenience experienced by them.
What is noteworthy is the fact that the common man in India have been hoping against hope that any Prime Minister would take some strong steps to curb black money and wipe out corruption in the country. People believed that Modi’s objective in ordering demonetisation was positive and praiseworthy and they further thought that Modi’s promises are genuine.
Many impartial observers across the world now wonder as to whether any other Prime Minister in India or government in any other developing country could have issued such massive demonetisation order and survived the wrath of the people, who were subjected to considerable hardships due to lack of cash for transaction.
Prime Minister Modi has come out of the acid test, winning admiration all round.
Prime Minister Modi has been repeatedly saying that demonetisation is only the first step in his onslaught against corruption and black money in the country. The people, by and large, have accepted this statement at face value and have supported him. They are now looking forward to know as to what further step Modi would initiate to take his anti-corruption drive to the logical end.
The opposition parties and pledged critics of Modi are now saying that demonetisation will not drive out black money and it would again start generating and Modi cannot stop it. Modi has to prove his critics wrong and people want him to prove it effectively.
Obviously, people are in a hurry to see the results of demonetisation. They want corrupt people to be hauled up and punished effectively to create fear amongst the corrupt and dishonest individuals and groups.
The problem for Modi is that the government machinery at his disposal is itself largely corrupt. This has become fully evident when it was found during the peak period of the demonetisation exercise that several bank officials themselves colluded with the black money holders and helped them convert black money into white. Some of them have been caught but more may have remained undetected so far.
Another problem for Modi is the slow progress of judicial proceedings in dealing with corruption cases and the capability of the corrupt people and black money holders to circumvent the law or misinterpret the law with the help of highly skilled lawyers, some of whom are politicians themselves.
The entire country, including the critics and pledged admirers, are closely watching the next step of Modi. The anxiety of the anti-corruption crusaders is whether the challenges before Modi in continuing his battle against corruption would become too formidable for him to tackle.
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