Demonetisation

Demonetisation to not trace corrupt money: French Nobel laureate Jean Tirole

Jean Tirole

New Delhi, January 6: French Nobel laureate Jean Tirole on Thursday raised doubts on how Indian demonetisation would trace black money as it is invested in real estate, gold and other things.

The Nobel laureate at a lecture organised by Presidency University said Indian demonetisation “can’t catch much of corrupt money” and the concept “cashless” should be attached to convenience and not to trace black money.

If India could successfully get rid of much of the unaccounted cash, it will make corruption more difficult in the future, the expert said.

Citing similar attempts in Scandinavian countries, Tirole cautioned that demonetisation in India is different.

“People want to get rid of cash for several reason and you see that in Scandinavia for example, Denmark and Sweden are trying to get rid of cash because it is more convenient. In India, the reason is to get rid of corruption,” he said.

He further added cashless economy, “is a good thing” but “it has to be ensured that poor people who are most dependent on cash do not suffer”.

The Modi government’s decision to scrap 86 % of country’s cash has been severely criticized by experts around the world. “This demonetisation may go down in recent history as the biggest example of firing cannonballs to kill mosquitos, with huge collateral damage,” said Maitreesh Ghatak of the London School of Economics.

Indian counterparts from Jawaharlal Nehru University in Delhi like Jayati Ghosh said that in the entire episode of demonetisation, the “government’s arrogance and insensitivity have been breathtaking”.

“But as the mess continues and the material damage grows, its ability to hoodwink the population cannot last for long,” she added.

Prime Minister Narendra Modi led demonetisation has crossed 60 days and cash crunch has become the order for the masses. Not only manufacturing and production, consumption and entire supply channel is affected post noteban. The situation is even worse at rural areas. Time and again, in past two months, several experts have criticized government’s aristocratic move to ban currency bills and hold back cash supply in a democratic government elected by people.

Experts believe that that cash clampdown is going to hurt Indian economy for at least two quarters and significantly hurts its position as one of the world’s fastest growing economies.

Wefornews Bureau

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