Demonetization Reactions

Two and a half weeks into the Great Indian Demonetization, public support remains high in the cities (as does schadenfreude) and nobody really knows what is going on in the villages. But then, whats new about that. I googled “impact of demonetization on rural India” and got 3 types of answers:
1. Statistical: Did you know there are more ATMs in Delhi than the whole of Rajasthan or that the average rural bank branch services 12,863 people compared to 5,351 served by the average urban branch. What that implies I haven’t the foggiest since bank penetration is non-uniform as is the population density, but there it is.
2. Anecdotal: A reporter travels to a remote village in fact only 33km from Delhi to find out that most people aren’t too badly affected.
3. Speculative: Most speeches in parliament.

Quora, the favorite water cooler site for Indian gossip is notably silent. Nobody understands what is happening and for once people aren’t declaiming despite that.

Most people are still recovering from the shock that it is possible for an Indian government to act firmly and decisively on a policy that is likely to be controversial. At the same time, we have seen the inevitable incompetence and mismanagement associated with any government initiative. Policy has changed faster than the weather in the past 2 weeks with every day producing some concession, tightening or limit adjustment. It is clear that nobody understands the full extent of the consequences we are likely to face, least of all the government which has shown complete surprise at every stage.

For now, I remain cautiously optimistic. Narendra Modi for all his faults is not a fool. He entered this process knowing that if it did not yield results it would be an albatross around his neck at the next election. But the window of opportunity is shrinking.


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