So far this whole demonetisation thing has been like a combination of two fables: Rashomon and The Six Blind Men of Hindostan.
In Rashomon, a 1950 film by Akira Kurosawa, there are different versions of reality depending upon the narrator. In the other story, as they go round it blindfolded, no one can tell what the animal is.
Annoyingly, however, everyone is right for about three seconds. This allows them to cry victory and run, which only causes confusion.
What Captain N D Modi, a la Captain M S Dhoni, has done is to lift the ball over mid-on: It is high up in the air, spinning madly in a headwind and going towards the boundary. Everyone is wondering if it will be caught inside the rope, or sail over it for a six — and a win.
Right now, Skipper Modi is holding his breath because even if he isn’t caught, he could still lose the match if the ball falls inside the line. He needs a sixer, not a four. It is not clear if he is going to get one.
As Sunil Gavaskar and Ravi Shastri often tell us, shot selection is crucial. Trouble is you don’t know if you have selected correctly till the very end, one way or another.
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And that precisely is the problem with Modi’s adaptation of Dhoni’s helicopter shot: we will not know if he chose the right shot for a long, long time — and maybe never even, if the scores are level — which may well happen if all the money he withdrew from circulation comes back.
All are sc*****
For the moment, whichever way you look at it, India and Indians are well and truly sc*****. There’s not enough cash to go around and no one knows if there ever will be. Chances are that a third of the number of notes that were withdrawn on November 8 will not be replaced.
That’s okay, I suppose, if you want to push for digitisation but how soon will the rest be replaced? The Reserve Bank of India (RBI) says soon. But after 31 days of queuing in front of banks, no one believes anything any more.
Jaitley is more honest. He says he doesn’t know.
The idea, he keeps saying, is to hugely increase the percentage of electronic transactions. So we could have a very long shortage indeed, designed to push people into going digital. On Thursday, he announced some subsidies to nudge people along.
So after the stick he has announced some carrots as well, 11 of them so far.
But guess what? Electronic transactions are currently less than five per cent of the total number of transactions. Imagine how long it will take to get up to 25 or 30 per cent.
But, yes, there is no doubt that when it does get up to that level, India will be better off. So will the government as it sets about collecting more taxes.
Meanwhile, no or less cash means less buying. Less buying means less selling. Less selling means less producing. Less producing means more sacking — which means everyone (except those who receive salaries)
is sc*****.
Doubly sc***** actually, because the RBI says it is not going to get any extra money from this Great Modi Manoeuvre. Had it got that, a portion of it could have been deposited in the Jan-Dhan accounts by the government, giving aggregate demand a real boost.
Unfortunately for the Prime Minister, the opposite may well have happened. There will be a sharp drop in the level of economic activity for about six months.
Thus, while he may have crippled the Opposition, in the process has he crippled the Bharatiya Janata Party, too? It is beginning to look like it. We will know in a few months’ time.
Unique style
In the meantime, we can only watch helplessly as the Prime Minister governs India in his unique style, and hope that he gives up this habit of taking everyone by surprise every now and then.
Remember Christmas 2015 when he dropped in on Nawaz Sharif? That one backfired. Almost exactly a year later, so could this one.