Integrity and Transparency: Why the Narendra Modi Government Refrains from Sharing Demonetization Figures

For the past few years, the transformation of India's economic landscape through the demonetization initiative has been a topic of intense scrutiny and speculation. Despite the gains filtering in through newspapers and readers having to piece together the narrative from various sources, the government, specifically under Prime Minister Narendra Modi, has not released comprehensive figures related to this massive financial reorganization.

The Current State of Affairs in India

Recent years have been marked by a series of strategic moves and policy implementations under the leadership of the present government. A set of technocratic and unelected bodies, such as the Niti Ayog, along with a smaller group of advisors closely aligned with Narendra Modi, have wielded considerable influence over the nation. This has resulted in the decentralization of power, akin to a "Decentralized Emergency" as critically described by veteran journalist Arun Shourie. Shourie emphasized that this is a result of a "pyramidal Mafia State" instigated from the capital, undermining institutional integrity.

The Data is Out There: Transparency and Its Lack

Despite the lack of transparency from the government, essential data points accurately reflect the changes and outcomes of demonetization. Here are a few key pieces of information:

Ratio of GDP Growth in Q3 of 2017: According to economists from a Reuters poll, India's quarterly gross domestic product (GDP) grew at 6.4 percent annually, significantly lower than the 7.3 percent growth seen in the July-September quarter. This suggests a slowdown in the economic momentum following demonetization. IT Identifications Post-Demonetization: Following the demonetization drive, the Income Tax (IT) department has identified over 1.8 million individuals where their deposits do not align with their reported income sources. This indicates a substantial number of individuals who may have been involved in tax evasion or illicit financial activities. Returned Demonetized Currency: Approximately 97% of the demonetized currency (Rs 15.4 lakh crore) has been deposited back into banks, either for exchange or deposit purposes. The RBI reports that only about Rs 40,000 crore has been discontinued, indicating that the actual impact on the black economy is minimal. Tax Revenues Growth: Net indirect tax collections grew by 16.9% compared to the same period in the previous year, showing a robust economic recovery from the initial uncertainty post-demonetization. Growth rates in net collections for Customs, Central Excise, and Service Tax have all outpaced their corresponding months from the previous year. Direct vs. Indirect Tax Collections: While direct tax data does not reveal all the economic impacts, indirect tax collections do. The absence of a significant decrease in indirect tax receipts over the period from November to the present indicates a resilient economy unaffected by the demonetization shock.

The Need for Transparency in Governance

The reluctance or failure of the government to share these figures with the public is a matter of concern. Transparency in governance is crucial to build trust, ensure accountability, and facilitate informed discussion and debate on critical economic policies. The current state of affairs, characterized by a lack of comprehensive data release, leaves many questioning the effectiveness and intentions behind the demonetization scheme.

Governments must recognize the importance of data and its role in underpinning public trust. By providing transparent and timely information, authorities can foster a sense of openness and honesty that is essential for effective governance and a healthy public discourse.