Across the aisle by P Chidambaram: Spin doctors at work

Of the top 5 bowlers of IPL 2023, four are spinners — Rashid Khan, Y Chahal, Piyush Chawla and Varun Chakravarthy. To a lay person, that is surprising because one thought that T-20 was made for hard-hitting batters who loved to hit the spin bowler out of the ground.

Perhaps taking a leaf out of the IPL, spin doctors are in great demand in the current BJP government and the institutions under its governance. The latest crop is in the RBI and among the ‘economists’ bowling for the government. A made-in-heaven opportunity presented itself on May 19, 2023 when the RBI announced that it would ‘withdraw’ currency notes of Rs 2,000 denomination. The spin doctors argued that it was not ‘demonetisation’. Recall that in 2016 also, the notifications and circulars used the word ‘withdrawal’ and not demonetisation.

Also read: Across the aisle by P Chidambaram: Rebuff to centralism

Our minds raced back to November 8, 2016. On that day, the Honourable Prime Minister announced dramatically on national television that currency notes of Rs 500 and Rs 1,000 were no longer legal tender. In one stroke, 86% of the currency in circulation was declared illegal. The consequence was CHAOS. No useful purpose will be served by recalling those horrendous days.

Defying logic

On November 8, 2016, the government also quietly slipped in the decision to introduce the Rs 2,000 note. The spin doctors called the decision ‘remonetisation’. The people were learning a new word, demonetisation, and the other new word — ‘remonetisation’ — blew their minds. Why would government scrap the Rs 500 and Rs 1,000 notes and simultaneously introduce the Rs 2,000 note? Why could the old notes not be replaced by new notes of the same denomination but of a different colour and size and with new features? The Rs 2,000 notes made no sense when tested against the three declared objectives of demonetisation: to eliminate fake currency notes, to unearth black money, and to stop the funding of drug trafficking and terrorism through fake notes. The hoarders, drug traffickers and terrorists happily welcomed the Rs 2,000 notes because it made their jobs easier.

Despite the government, the people shunned the Rs 2,000 note. It was utterly useless as a ‘medium of exchange’. Few shopkeepers and fewer service providers were willing to accept the Rs 2,000 note. Within a few weeks, the Rs 2,000 notes practically vanished from daily, routine transactions. Yet the RBI continued to print and issue the Rs 2,000 note until 2018. It has now transpired that the bulk of the Rs 2,000 notes continued to lie in the currency chests or vaults of the banks. The remainder lay, not in the hands of the millions of people who used cash, but in the hands of a fraction of the population. Why the Rs 2,000 note was introduced in the first place has elicited no logical answer so far.

Why withdraw in 2023?

The logic-defying Rs 2,000 note also defies the next logical question: why was it withdrawn in 2023? According to the RBI’s letter to the banks, the Rs 2,000 note was introduced to “meet the immediate currency requirement of the economy” and had served its purpose! The ordinary people of India did not “require” the practically useless Rs 2,000 note. They met their requirements by using lower denomination notes and the Rs 500 note that was re-introduced, inevitably, shortly after demonetisation. There was no explanation why so many crores of Rs 2,000 notes were printed when the people had shunned such notes. The RBI’s further justification was that the shelf-life of the Rs 2,000 note was only 4-5 years. If that is so, the shelf-lives of the lower denomination notes (Rs 10, 20, 50 and 100) must be shorter. Just as they are replaced with new notes from time to time, the Rs 2,000 notes could also be replaced periodically. More the spin to the story, the more the spin doctors are trapped in their own web of lies. And in the process, there is less faith in the integrity of the Indian currency.

Mr K V Subramanian, India’s nominated Executive Director at the IMF, had the most amazing explanation: it was to lure the black money hoarders to keep their unaccounted money in Rs 2,000 notes and, seven years later, to swoop down upon them and unearth/seize their black money! That deserves the ig-Nobel prize for the most bizarre story spun by the doctors. Mr Subramanian’s true calling may be as an author of science fiction.

Also read: Across the aisle by P Chidambaram: Silence is spurious golden

Red carpet for hoarders

Unfortunately, no sooner had Mr Subramanian presented his outlandish theory than the SBI announced that the Rs 2,000 notes could be exchanged by any one without proof of identity, without filling out any form and without proof of the source! Many banks followed suit.

It is now absolutely certain that like 99.3% of the Rs 500 and Rs 1,000 notes had been returned in 2016, nearly every Rs 2000 note in ‘circulation’ will be returned to the RBI. The tribe of spin doctors will spin the story that after 7 years of Herculean efforts, the almighty Government of India has successfully unearthed all the black money in the country, put an end to corruption and vanquished the drug traffickers and terrorists and their financiers!

The spin doctors are smacking their lips and waiting for the next grand opportunity to prove that theirs is the best business in town.