Demonetization is fallout of ineffective Planning – Dr Subramanian Swamy
Udupi: Demonetization is a fallout of ineffective planning said Economist and Rajyasabha MP Dr Subramanian Swamy. He was speaking during a lecture series titled Impact of Demonetization on Indian Economy organized by the Manipal Institute of Technology as part of the silver jubilee celebrations.
The finance ministry had not drafted the contingency plan to overcome any crisis. The banks needed to have kept ample reserves of the currency notes of other denominations to tackle the need of currency notes in the economy. The uniformity of size had to be maintained in the new currency notes as the new currency notes were smaller in size and could not fit in the ATM machines. Since it was marriage season, the demand for cash was huge.
Demonetization has resulted in collateral damage to medium and small scale industries, where cash crunch has badly affected the labourers. The daily wage labourers from Bihar who had come to Tamil Nadu and Punjab were badly affected.
Demonetization was aimed at rooting out black money from the economy but the objective has not been achieved. The bank managers and touts managed to exchange demonetized currency with new notes on a commission basis. 
When you propose reforms you should make sure that the benefit reaches the people at the earliest while in this case of demonetization it resulted in a crisis.
Demonetization has played a vital role in national security, the counterfeit currency which was printed by the ISI funded agency to support terror activities in Kashmir and border areas was successfully tackled. Since the demonetization, there has not been any massive protests and violence by the people of Kashmir.
The black money problem can be tackled with the abolition of income tax, participatory note. Hawala traders should be arrested, governments go soft on hawala traders as they either are their relatives or belong to minority communities. Service tax is an idiotic reform proposed by people of low intellect. Arrest the top men involved in tax evasion so that the people of the country will become honest as they would fear of action by the government.
The exit of Raghuram Rajan was a good move by PM Narendra Modi as he kept on increasing the interest rates, even Obama had called on PM Narendra Modi to let Rajan continue.
70% of investment is spent on the production of luxury goods where 30% of people live below poverty line. The market is filled with sub-standard goods. There is a need for an effective policy to bring Rs 120 lakh crore black money to India. India will stand first in 2050 in GDP. Automation which will create jobs should be promoted.
You need to take risks to succeed, innovations should prevail, failure is the best teacher to go ahead, he added.
Pro-Chancellor Dr H S Ballal, Director MIT Dr G K Prabhu, and others were present. Later Swamy interacted with the students.
