Note ban was valid

PITCHED by Prime Minister Modi as a fight against corruption, his decision to demonetise currency notes of Rs 1,000 and Rs 500 on November 8, 2016, hurt businesses and livelihoods across the country. The public anger, however, did not manifest itself in electoral setbacks for the ruling party. The need for carrying out such a gigantic exercise and the methods adopted were roundly questioned, but not the Prime Minister’s intention. It would be uncharacteristic for any political party to not seek mileage when the top court of the country upholds a controversial decision, that too one which has become a political flashpoint. The Constitution Bench verdict dismissing petitions against the overnight invalidation of high-value currency notes could provide a momentum to the BJP ahead of a series of Assembly elections.

The note ban led to untold misery, and the poor bore the brunt. Any celebratory tone would not be in good taste. The Supreme Court has ruled that the government’s move satisfied the test of proportionality, and that it cannot supplant the wisdom of the executive on the matter. That should put an end to the legal challenge, but an informed debate on the utility of demonetisation must continue. It’s important to remind ourselves that even the best-laid plans can go wrong, and reflect on the lessons learnt. The jury is still out on what was ultimately achieved. Demonetisation was supposed to flush out unaccounted-for money and end corruption, did it?

Justice Nagarathna’s dissent has been described by former Finance Minister Chidambaram as a welcome slap on the wrist of the government. The note ban decision, she concludes, was an exercise of power contrary to the law; there was no independent application of mind by the Reserve Bank of India. The ‘noble objectives’ notwithstanding, it could have been initiated through an Act of Parliament and not by an executive notification. These are points to ponder.