Surgical Demonetization? What Is Good And What Needs To Be Fixed?

I consider demonetization as a key policy that has reverberations with system wide impact and a potential to clean the swamp from decades of moral erosion and political ineptitude. It’s a defining moment of our century and for India, while it was long overdue. I so strongly wish this initiative to win! So, what’s wrong and how to fix the 2016 Demonetization? Those who don’t consider it as a misfired shot, should explain how these 600 million people should manage being cashless or cash strapped until Mid or Last December, 2016. Those who consider this as not a misfired shot, should also explain how this is salvo actually hits those who indulge in black money?

The situation is similar to surgery. I mentioned two fallacies with any surgery and let the readers choose options on how to fix those. By participating in the survey, you will see where you stand amongst those who are vocal on this issue. Polls are open until Dec 4, 2016. Visit after a few days to see how your peers have voted.

What Is Good And What Needs To Be Fixed?

Or, let us ask – What is wrong with Surgery?

Surgery is indicated for an existing abnormality that causes significant functional compromise and it cannot be managed conservatively because of the inherent limitations. The procedure removes acutely offending situation, an example would be an appendix, a tumor or structural abnormality. It does not however remove the root cause that resulted in the outcome mentioned above.

Two pertinent things though – It is done with best interest standards and, the probability of successful outcome is high with anticipation, planning and execution with precision. If a doctor has vested interest in operating an appendix that was never swollen, or if the procedure is accompanied impromptu with inefficient planning and execution, no doubt, the outcome would be compromised or fail to achieve the desired outcome.

Demonetization is a long overdue indicated surgery. No doubt. A system where parallel economy is the norm meant that this was long overdue. It was obvious earlier too but no one dared challenge the system. It was as usual pleasing populist politics. It required a leader, not just with a vision, mandate but also a character, that is so much devoid of our polity. It was hard to find a leader until Narendra Modi undertook that mission.

It’s definitely a radical move, in industry parlance, they call it radical change. That radical change has to be supported by underlying fundamental change in ethos and values. Simply changing overt artifacts is unlikely to change the ground realities. When radical change is implemented without fundamental change, the system has a tendency to bounce back to its original state.

At least two major fallacies with 2016 demonetization

Of the several fallacies with the 2016 demonetization wave, I will focus on the two, which I mentioned in my earlier paragraph.

  1. Logistics and planning were not envisioned, anticipated, planned nor executed
  2. Selected few were aware of the likely change in advance and had already capitalized on the possibility.

Is the media biased?

Every day, we get to hear dreaded news from Modi’s Demonetization, when we talk with folks from India or whether we read a news channel. Generally, outside newspapers don’t have any political stake or bias. Generally, i won’t believe the Indian media, because you get biased news either way, highly positive or highly negative.”, the same holds true with my folks back in India. So, I can take them without that pinch of salt.

Even if I am not reflecting system wide, I can say, it was planned inadequately and executed improperly or else, why do we have to roll back the changes for farmers, college tuition, hospitals, rural areas? If this was anticipated, why is the common man at such a misery? Any radical surgery is associated with post-surgical pain, but the managing doctors have a plan, will never ask you to wreath in pain unattended. It is wrong to say the pain is created by the media, media hype. Don’t we know that the same Modi was so much exalted by the same media?

Why do we care for JFK?

Often Modi supporters point towards his celibacy and character. To be true, celibacy and personal character has nothing to do with political character or political ideology. History is replete with anecdotes of successful kings and emperors having harems with multitude of concubines. What mattered was their feel of the pulse for the masses. These rulers kept the state above themselves. Their personal life was a relaxation and second only to the state or the subjects they ruled. Not long ago, it was revealed that John F Kennedy always had a lady serving him while he was flying abroad as leader of a great nation. We all know, his vision for US and the world order, as well as the value he espoused for the most downtrodden. We all know how decisive he was during the 1962 Cuban war in avoiding third world war. To many, he is credited with putting Man over the Moon.

Why we want Modi to succeed with this initiative?

Personally, I see this as a MUST and long OVERDUE correction for Indian economy, not because of emerging digital phenomenon but to starve or eliminate the parallel economy. A failure of 2016 demonetization will be sad. An astute and courageous politician is likely to face electoral rout in the upcoming state elections, not because of acting for a good cause but for lack of vision, planning and execution.

This is one core deliverable from Modi that is so highly regarded and appreciated. It was eclectic for its system wide impacts of transforming the ethos and economy of India. Yet, it was planned with such belligerence, neglect, logistic flaws and ineptitude of executioner’s vision. This is a lesson learnt while governing a country like India with its complex mesh work of distinct economic layers.

Selected References:

I am in constant search of unbiased opinion. When I try Indian newspapers, they are either biased for Modi or vehemently against Modi. Either of which are inappropriate for understanding the ground realities. By extension, the same happens when I talk with my folks back in India. Thus, I am just disappointed gathering information from Indian Newspapers or those residing in India.

To me, established players from media from advanced countries offer better perspective. Generally, amongst India media, I choose to read Times of India, The Hindu, Financial Times, Economic Times. I prefer to read BBC, Bloomberg etc. for unbiased news about India. Below, is a collection of selected articles.

Demonetization and India’s Macroeconomy – Will Rupee Depreciate?

India: Demonetization and its Discontents

Jets Loaded With Banned Cash Draw India’s Ire in Graft Crackdown

Noted American experts divided over India’s demonetisation drive

The Economist | Free exchange: Paper pains

The Economist | India’s demonetisation: The ropy rupee recall

The Trouble With India’s Demonetization Gamble

IMF says Modi govt’s demonetization move needs to be handled prudently

How Narendra Modi’s demonetisation move brought Raghuram Rajan and Subramanian Swamy together

Did The Government Use Raghuram Rajan’s Exit To Push Through The Demonetisation?

Here’s What Raghuram Rajan Thinks Of Currency Demonetisation

Rural Distress Is On The Rise But Support Grows for Demonetisation: HuffPost-BW-CVoter Survey

Manmohan Singh Gave Major Burns To Modi On Demonetisation Today And Twitter Is Ecstatic

How India’s Cash Chaos Is Shaking Everyone From Families to Banks

India’s Modi Holds to 50-Day Pledge as Cash Chaos Intensifies

India’s Economy Grows Less Than Estimated Before RBI Rate Review

Modi’s Revolutionary Dreams

Noted American experts divided over India’s demonetisation drive

Can India’s currency ban really curb the black economy?

India rupee ban: Currency move is ‘bad economics’

Slew of U-Turns Blight Modi’s Cash Ban, Leaving Indians Outraged

What Will India Do With 23 Billion Worthless Banknotes?




Cataclysmic drift: What’s in for India?

Briefly, India would be preferred over China, India won’t get outsourced jobs as much as it had earlier, India based Global companies such as Tata, Reliance, Tech companies etc. will have to employee local white working and overall, he may possibly reduce Visa and Citizenship quota. We can’t have a war with China or Pakistan and take US support for granted. Coalitions built with Obama on fire.


The implications of Trump’s policies are still not clear but based on his election manifesto and speeches and his victory speech clamp down on immigration, renegotiation of free trade agreements, rebuilding infrastructure

Briefly, India would be preferred over China, India won’t get outsourced jobs as much as it had earlier, India based Global companies such as Tata, Reliance, Tech companies Infosys, Wipro, Cognizant etc. will have to employee local white Americans and overall, he may possibly reduce visa and citizenship quota beyond those reduced by President Obama.

If India goes for a war with Pakistan or China, they can’t take US support for granted. Coalitions built with Obama are very much on fire, if those are not consistent with policy.


  • Coalitions built with Obama Presidency will continue but with a reciprocal basis, only if that benefits US (under Trump regime).
  • You fight your wars, don’t bother us. All that means is, India and US can collaborate in South China but if it is Kashmir, you fight your war with Pakistan, if it is Muslim terrorism, we collaborate.
  • NATO and Other Military Coalitions likely to be downgraded


  • Seismic shift is likely to cause dollar depreciation. Rupee will likely appreciate. FDI in India to increase.
  • Current scenario favors India as one of the top destinations for (FDI ) foreign investment since growth projections are amongst the best and Governance is decisive.
  • Tech Buying Opportunity such as M&A likely to accelerate


  • Immigrant visas likely to reduce along with Citizenship applications.
  • Offshore companies working in US will have to employ locals, specifically hardware and software companies will be impacted
  • Outsourcing will be truncated, oversees jobs that propel US job market will be supported

Note: This blog will keep getting updated on a regular basis as new research trickles in.

Selected reading:

Trump Win May Lead to Tech Buying Opportunity, Mizuho Says

Market turmoil eases as investors weigh Trump’s plan for economy

Q&A: What does Donald Trump’s Presidential victory mean for the economy?

The Economist – World politics: Foreign policy – World-shaking

(This page is under construction. The blog herein is authors personal opinion, for any and all transactions, you are recommended to seek a financial adviser.)