‘About 60-plus budgets announced sans leaks’

It has the potential to usher in several positives to the economy, if the government rolled out several other measures in tandem with demonetisation to root out black monies comprehensively. He, however, wondered if the move was well-thought out, issues discussed threadbare and implementation details worked out before the demonetisation move was announced. 

Denying that secrecy was a major constraint, Sivaraman said nearly 60-plus budgets have been announced since independence and there was absolutely no leaks whatsoever witnessed (save probably one instance when a topic of little impact probably became known before pronouncement) over the years, despite several attempts to get access to budget papers before pronouncement by many operators across India.  

“There is never a right time for a move of this magnitude”: Ashok Malik, Distinguished Fellow, Observer Research Foundation opened his address with a light-hearted comment that had every one in splits. He said at a recent engagement with overseas financial experts, he was amused to hear this rather interesting point of view: “In the past, most people including foreigners often complained of slow progress by the government in almost all matters. But, this government since inception in May 2014, seems to move too fast for everyone’s comfort”. 

“There have been remarks that the timing was wrong, considering this is the sowing time for winter season crops. India has either festivals or agrarian seasons and hence, in my view, there is never a good time for the initiative. With this demonetisation, the government probably hopes that upto 15.5 per cent of the currencies in circulation will end up at the banks or get destroyed. Those ending up at the banks could probably add to the tax kitty of the government. The singular benefit that the move is expected to achieve is that the cash to GDP ratio is expected to come down from 11.5 per cent to a more acceptable 7 to 8 per cent of cash to GDP”. 

He compared the demonetisation move as akin to a recall of cars by an auto manufacturer. “The move is fraught with serious consequences and has to be planned diligently” he concluded.