Not even an year back when Raghuram Rajan was at the helm of affairs at RBI, it was an institution which was looked up on, which was renowned across the globe as knowing what it was doing and it braved the recession like a champ.
But now with a puppet installed at the helm after removing Raghuram Rajan it has become unrecognizable and almost incompetent. So much so that it is now even credited with being the first institution which has successfully manufactured a recession and slowed down a fast growing economy.
Let’s just try and understand what transpired in the last couple of weeks in RBI
- They have admitted they have no clue as to how many notes were printed and circulated. And that was their one primary job in the last month. All they have are a handful of factories and they couldn’t keep track of even that much. The incompetence is appalling and the thought that they are safeguarding the economy is scary and fast becoming a frightening reality
- They have admitted the demonetization decision was taken after deliberation with RBI for one day. Nov 7th advised by government and Nov 8th approved by RBI, and hours after approval announcement was made. This is what happens when you don’t have a strong person at the helm at RBI. And this exactly is why RBI should be autonomous away from interference of the government
- This might make you believe that the government actually consulted some financial experts before taking this decision. Wrong again, another RTI has revealed PMO has no clue as to which financial experts were consulted
- The situation gets worse, the finance minister when asked about how much money is back in the banks has no clue about it. And that was his job. With real time tracking of money possible in all banks, it won’t take a couple of hours to know this. So its appalling incompetence. But no I believe it’s because all money has come back into system and accepting that would be a big disgrace to the entire demonetization process which was supposed to bring them windfall gains.
- And as for the planning part as per another RTI the printing of new 500 Rs notes happened two weeks after demonetization, again exposing the lack of planning of the entire exercise.
- And in other news, there are notes without Gandhiji. And latest notes with one side blank. And some officials claim there are 3 types of 500 and 2000. That’s some quality notes we are printing there, just makes it easier for counterfeiting.
- And the narrative which was fully on Black money on Nov 8th has now shifted to cashless, counterfeiting and terrorism. Guess what no Black money came back even after all the freebies and goodies offered. Because all the major black money holders were informed much in advance.
- And in latest news RBI governor was seen running away (literally) from the media, afraid to answer the queries or because he has no answers for the debacle that is demonetization
- And the RBI gave a reason threat to life to not answer questions about the preparations for demonetisation. One it could be from the ruling regime because they would look bad, other could be from the general public who would understand how unprepared they were for making the public pay such a huge price.
Ultimately it is saddening to see a once powerful and reputed institution becoming just another tool for the politicians. But hey its in good company of the CBI, Censor board, countless educational institutions which are being reduced to a shadow of their former self's.
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