Ex-chief adviser unburdens

LESS than six months after quitting as the Chief Economic Adviser (CEA), Arvind Subramanian suddenly realised that the demonetisation that took place under his watch was actually a draconian move by the Modi government. Late realisation is worse than no realisation, especially if the person involved was a key functionary when the event took place. The DeMo controversy has been stoked again after Subramanian’s soon-to-be-released book, Of Counsel: The Challenges of the Modi-Jaitley Economy, claimed it was ‘a massive, draconian, monetary shock’. In fact, his U-turn in the upcoming book amazes because when in saddle, he was at pains to justify the move. The ‘draconian’ measure was announced when Subramanian was technical counsellor and the way he assessed the government’s policies had the potential to make or mar the fate of millions. It is obvious he could not avert the crisis, the least he could do was to have registered his protest then to enable the government to embark on a course correction.

Subramanian fell short on two counts — despite holding a responsible position, he failed in his duty by not opposing demonetisation two years ago. And then, he gamely defended the same government for over 18 months giving no indications that all the while he was disenchanted with the initiative. Though only he can accurately explain his compulsions during that period, prima facie, it appears that Subramanian was either too naive to get swayed by the narrative of the political leadership or like many bureaucrats, kept his counsel.

Recently, RBI Governor Urjit Patel confessed in front of the Parliamentary Standing Committee on Finance that demonetisation had adversely impacted the economy, even if its impact was transient. The move had upturned the informal sector along with the lives of underprivileged millions. In one stroke it forced millions of tiny entrepreneurs to become daily-wage earners. In fact, the lawmakers need to quantify the damage done to the informal economy post-demonetisation, and take remedial measures. Subramanian’s outburst should have served some useful purpose besides being an author’s attempt to market his book.