by Meera Sanyal
RTGS and NEFT systems
Rupees 2,000 notes released after demonetization
Rupia
Sahu, Udit
SAIF Mauritius
SAIF Partners India Pvt. Ltd
Sainath, P.
Sales Tax
Santayana, George
Sarabhai, Mallika
Sassoon docks
savings and investment, impact of demonetization
Saw Maung, General
Sayyed, nazim
Scandinavian socialist economic model
Schacht, Hjalmar
secondary steel industry, impact of demonetization
Sen, Amartya
Sen, Pronab
Shagari, Shehu
Shah, Ajay
Shah, Amit
Shah, Jignesh
Sharma, Vijay Shekhar
Sharvan, a Dalit worker
Sheriff, S.K.
shipbreaking activity
Siddiqui, Mannan
Silk Road
Singh, Sukhdev
Sinha, Yashwant
small manufacturers
small retailers and traders, impact of demonetization
smuggling
Snyder, Scott
Sonar, Suresh
Song dynasty (960–1279 CE)
Soviet Union and Russia:
breakup
Demonetizations of 1991, 1993 and 1998
Specified Bank Notes Cessation of Liabilities Ordinance
Sri Lanka (Ceylon); demonetization
Standing Orders by Department of Economic Affairs (DEA)
start-ups in the telecom business
State Bank of India’s (SBI)
Ecowrap, April 2016
State Bank of Mysore
Steffeck, Fraulein
sting operations and raids
sting operations by TV channels
Stresemann, Gustav
Subbarao, Duvvuri
Subramanian, Arvind
Summers, Lawrence
Sundaresan
Suri, Sher Shah
Sutela, Pekka
Swamy, Subramanian
Tamaliya, Tejabhai
Tata Consultancy Services (TCS)
tax avoidance, tax evasion
Tax base, expansion
tax penalties
Taylor, Brian
tea gardens and workers, impact of demonetization
Terror Funding and Fake Currency Cell (TFFC)
terrorism
terrorist attack on Mumbai (26/11/2008)
terrorist financing
textile industry: cotton farmers, weavers, mills, looms and textile merchants, impact of demonetization
Thakur, Justices T.S.
Thengue, Anju
Thorat, Usha
Tirrihannah Tea Estate
Topno, Noel
tourism and those dependent on it, impact of demonetization
transparency
Transparency International
tribal communities, impact of demonetization
Trump, Donald
Tshisekedi, Etienne
Tughlaq, Muhammad bin
2G Scam
Tyagi, Mukesh
U Nu
under-invoicing and over-invoicing
Underprint series notes
unemployment
Unified Payments Interface (UPI)
United Forum of Reserve Bank Officers and Employees
United Front
United Nations
United Nations System of National Accounts
United Progressive Alliance (UPA), 135; II
United States: presidential election, Clinton vs. Trump, 2; terrorists’ attack, 9/11
Unlawful Activities (Prevention) Act
Uttar Pradesh elections
Vaidyanath Urban Cooperative Bank, Maharashtra
Vajpayee, Atal Bihari
Varma, Amit
VAT
Venture Capital Fund SAIF
Verveer, Melanne
Victoria Portrait series notes
Vijayakumar
Virmani, Arvind
Vishwanathan, N.S.
Voluntary Disclosure Schemes
Vyas, Mahesh
Wanchoo Committee
Wanchoo, Kailas Nath
weighted average lending rate (WALR)
Weimar Republic
West African Currency Board (WACB)
Wilhelm II, German Emperor
women’s self-help groups
World Bank
World War I
World War II
Yechury, Sitaram
Yelstin, Boris
Yuan dynasty
Zaire: demonetization
Acknowledgements
For this book, I owe many my thanks.
First and foremost, to my family, who took turns in encouraging me to persist every time I hit a writer’s block.
To my husband, Ashish, who would thoughtfully remind me every day, to get a little done and inspire me with the discipline he brought to writing his own book Heritage Retailers of Bombay. To my mother, Banu, for her unwavering support and encouragement, and her daily morning prayers that have blessed and protected me. To my brother, Manik, who gave me haven in his tranquil home by the river Pampa in Kerala, where much of this book was written – which sadly was submerged and badly damaged in the recent deluge – as also for his valuable inputs. And above all, to my children, Priyadarshini and Jai, who helped me edit and format the book, to make it both crisper and more comprehensible.
Much of the pleasure in writing this book came from trying to unravel the mystery behind the unanswered questions of India’s 2016 demonetization. There was a wealth of information available – the challenge was to try and join the dots, to sift rumour from fact, and to identify meaningful data that could present a factual and objective picture of the events and outcomes of this move.
For this, I would like to acknowledge the individuals and institutions from which I drew much of my information and data.
First and foremost, my thanks to senior former officials of the RBI, whom I have taken the liberty of quoting: ex-Governors Dr Bimal Jalan, Dr Rangarajan, Dr Y.V. Reddy, Dr Duvvuri Subbarao, Dr Raghuram G. Rajan and ex-Deputy Governors Dr K.C. Chakrabarty and Mrs Usha Thorat.
I am just as grateful to the Reserve Bank of India for their excellent website, Annual Reports, Mint Street Memos, Macroeconomic Assessments, and data base, from where I was able to get a great deal of valuable information.
Data was also drawn from the Economic Survey 2018, MoSPI website and press releases, Workdbank.org, the ILER report for IHD, Investopaedia, AIMO, Research Unit for Political Economy (RUPE), The Quarterly Employment Survey prepared by the Ministry of Labour and Employment, Transparency International website and their CPI report, the National Crime Records Bureau, the South Asia Terrorism Portal created and maintained by the Institute for Conflict Management, the Central Board of Direct Taxes (CBDT) and National Sample Survey Office (NSSO) data.
My particular thanks to Soumya Kanti Ghosh and his team at State Bank of India (SBI), whose SBI Ecowrap reports were a very useful source of information, and to Mahesh Vyas and his team at Centre for Monitoring Indian Economy (CMIE) whose data was invaluable.
As the 2016 demonetization dominated media space, there were numerous excellent articles by journalists both in mainstream print media and online media. I owe sincere thanks to the journalists and publications from whom I have quoted in the book – Firstpost, India Today, Mint, The Indian Express, The Times of India, Business Standard, the Hindustan Times, The Hindu, Business Today, The Wire, India Spend, Scroll.in; to the websites of Village Square, PARI, LiveLaw, Perfectsourcing and Steelworld; and foreign publications such as The Economist, The Wall Street Journal, Forbes magazine and The New York Times.
Thanks are also due to news agencies PTI and IANS and TV channels TV Today, CNN IBN, ABP News and Zee News.
My special thanks to Salil Tripathi and Paranjoy Guha Thakurta for their valuab
le inputs.
I have had to draw from both the RBI archives and numerous foreign publications and authors. Articles and interviews quoted have been gratefully acknowledged.
The commentary on demonetization was made much richer by the expert comments of several distinguished bankers and economists. I have taken the liberty of quoting, with respect and gratitude, the words of the former Prime Minister Dr Manmohan Singh, Nobel laureate Dr Amartya Sen, Dr Jagdish Bhagwati, Dr Arvind Virmani, Dr Bibek Debroy, Dr Kaushik Basu, Amit Verma, Devangshu Datta, Ajay Shah, Dr Pronab Sen, Prof. Arun Kumar, Prof. Pulapre Balakrishnan, Captain Raghu Raman, Dr Ajit Mozoomdar, Neelkanth Mishra, and Prof. Himanshu.
Two experts to whom I owe special thanks are James Wilson and Vivek Kaul, whose detailed and insightful articles and blogs through the course of the demonetization period and its aftermath, helped to make sense of all the contradictory data that was appearing.
The demonetization had many tragic and unfortunate outcomes. The office of the Chief Minister of West Bengal had documented the deaths attributed to this move. My sincere thanks to Derek O’Brien, Member of Parliament and Chief Spokesperson of the All India Trinamool Congress, for sharing the list of the 120 demonetization deaths.
Despite the havoc wreaked by demonetization, India never lost its sense of humour. They say a picture speaks a thousand words. Cartoons by India’s talented cartoonists managed to evoke a smile despite all the chaos. My deep and sincere thanks to the many cartoonists who inspired me, especially Satish Acharya.
My learnings and perspectives have been shaped by the experiences in my banking career and my two Lok Sabha campaigns. For these, I owe thanks to numerous colleagues, mentors, bosses, volunteers, supporters and friends, whom I request to forgive me for not mentioning them individually by name; my journey would have been incomplete without your encouragement, guidance and support, for which I will always be deeply grateful.
Last, but not least, my thanks to my publishers Sachin Sharma and Krishan Chopra at HarperCollins. The idea of this book was theirs, and from our first meeting in December 2016, they have been unwavering in their support. I would also thank my copy-editor, Nandakumar K., for his diligence and incisive comments.
Meera H. Sanyal
3 September 2018
About the Book
8 NOVEMBER 2016 WAS A BLACK SWAN EVENT IN INDIAN HISTORY.
At one stroke, 86 per cent of the currency in circulation was demonetized, causing confusion, chaos and endless misery to the common Indian. While the Modi government claimed that it was the silver bullet that India needed to eliminate many of its long-standing problems, such as black money, corruption, tax evasion and terror funding, the months that followed proved it otherwise.
The return of 99.7 per cent of the banned 500-rupee and 1,000-rupee notes showed that the idea of a Demonetization Dividend was nothing but a mirage. As a result of demonetization, livelihoods of millions in the informal sector were destroyed, causing enormous distress to farmers and traders and forcing many micro, small and medium businesses into bankruptcy. Economic growth slid to as low as 5.6 per cent in the quarter through June 2017. In fact, all claims by the government fell flat.
One of India’s most respected bankers, Meera H. Sanyal provides a comprehensive analysis of the policy, its execution and its pitfalls. The Big Reverse presents unprecedented insights backed by data, history and research. And answers the questions that still continue to haunt Indians on the what, why and how of demonetization.
About the Author
Meera Sanyal is one of India’s most respected bankers. She relinquished her job as CEO and chairperson of Royal Bank of Scotland, India, to enter public service in December 2013.
In a banking career spanning thirty years, Meera worked with ABN AMRO Bank/The Royal Bank of Scotland for twenty-one years in diverse roles. She was COO for the Asia Pacific region, head of corporate finance advisory for Asia, founder and CEO of ACES, the bank’s global ITeS company, and head of its investment bank in India. She mentored the bank’s micro-finance programme that financed over 6,50,000 rural women and chaired the bank’s foundation that provided livelihood assistance to 75,000 women-led households in threatened ecosystems. Her prior experience was with Lazard and with Grindlays Bank.
Meera is a member of the International Board of Right to Play, a board member of LiberalsIndia for Good Governance (a continuation of the Indian Liberal Group), and sits on the supervisory board of Jai Hind College. She is a founding member of APLI Mumbai, a citizens’ movement for the regeneration of Mumbai’s PortLands and a more livable Mumbai. Meera is also a member of Hillary Clinton’s International Council on Women’s Business Leadership.
She stood for the Mumbai South Lok Sabha seat in 2009 as an independent candidate, and in 2014 as the Aam Aadmi Party (AAP) candidate. She is a member of AAP’s National Executive Committee. Meera helped lead the Delhi dialogue which was the basis of the party’s manifesto for the Delhi state elections. The party would go on to win with an absolute majority in 2015.
Meera was awarded the Philanthropist of the Year award by FICCI, Woman Banker of the Year award by the Indian Merchants Chamber, the Woman of Substance award by the Rotary Club, and the Karmaveer Puraskaar, a national people’s award instituted by iCONGO, a countrywide confederation of NGOs, for her work in social development.
Meera is an MBA from INSEAD, France, and has completed the Advanced Management Programme at Harvard Business School. She is a fellow of the Chartered Institute of Bankers (UK).
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First published in India in 2018 by Harper Business
An imprint of HarperCollins Publishers
A-75, Sector 57, Noida, Uttar Pradesh 201301, India
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Copyright © Meera H. Sanyal 2018
P-ISBN: 978-93-5302-394-2
Epub Edition © October 2018 ISBN: 978-93-5302-395-9
The views and opinions expressed in this book are the author’s own and the facts are as reported by him, and the publishers are not in any way liable for the same.
Though every effort has been made to trace sources for quoted text, it has not been possible to do so in all cases. Any omissions brought to our notice will be rectified in future editions
Meera H. Sanyal asserts the moral right to be identified as the author of this work.
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