PM Modi: The Architect of the disaster

“I constituted a small team 10 months ago to execute a big operation. It was a humongous task to print currency notes, distributing them to different banks: Narendra Modi in Goa on November 13, 2016. Through the note ban, in one stroke, we destroyed the world of terrorism, drug mafia, human trafficking and the underworld,” said Narendra Modi in December, 2016

Prime Minister Narendra Modi reportedly told a cabinet meeting on November 8, 2016, “I have done all the research and, if it fails, I am to blame." It bore his imperious imprint. The Reserve Bank of India informed the Public Accounts Committee (PAC) in writing that though the proposal was under discussion for ‘some months', it was on November 7 that the RBI received a note from the Government saying that the central bank might like to consider demonetising currency notes of ₹500 and ₹1000. The RBI board met the very next day, November 8, at 5.30 pm!

While it is now known who attended the meeting (RBI Governor, two Deputy Governors, the head of Gates Foundation in India, CFO of Mahindra & Mahindra and three bureaucrats, including a former Chief Secretary of Gujarat), what is still not known is how long the meeting lasted and what was discussed. Reserve Bank of India has consistently refused RTI applications to share details of the meeting. But the meeting could not have lasted for long because the PM was at 8 pm addressing the nation on Television, after briefing the cabinet on the decision. While circumstantial evidence points the finger to the PM, the following questions are yet to be answered:

• Who planned demonetisation of 86% of the currency?

• Why was November 8, 2016, chosen and by whom?

• On whose advice was the exercise undertaken?

Union Minister Piyush Goyal declared in Parliament that it was the RBI which ran monetary policy of the country and the government had merely acted on RBI’s recommendation. This, of course, contradicts what the RBI told the PAC in writing and what the PM himself declared in Goa on November 13 (see above). He is yet to disclose who the members of his ‘small group’ were.

Former RBI Governor Raghuram Rajan has gone on record to acknowledge that the government had consulted him on demonetisation and he had strongly but ‘orally’ objected to it.

On the other hand, a Deputy Governor of RBI, R Gandhi, who retired in April, 2017 told an interviewer that everything related to demonetisation had been planned in advance, that the fallouts were known and even the relaxing circulars notified after demonetisation by the RBI had also been pre-meditated.

RBI had started printing ₹2000 notes long before demonetisation was announced, confirmed R Gandhi. Strangely, when Rajan handed over charge to Urijit Patel in August-September, 2016, in his mandatory report to Patel on August 29, he made no mention of either demonetisation or of the ₹2000 note being printed.

Clearly, even two years after demonetisation, the country does not know enough of what happened before and after November 8.