Young Business Journalist Rubbishes Rahul Kanwal’s Claims About Pros Of Demonetisation

The damage that demonetisation has wrought on India’s economy, and especially its poor, is by now a topic so widely debated that it seems to have run its course, even though its repercussions are still being felt. But a recent ‘high level internal report’ by government officials seems to have reignited the debate. India Today journalist and television news anchor Rahul Kanwal, who has previously been accused of bias in his news coverage, made some tall claims in his coverage of the report. Citing ‘exclusive access’ to the report, Kanwal’s India Today article claimed that demonetisation has strongly boosted the income tax base in India, as well as the mobile wallet economy and debit card usage figures. “Senior officials in the administration say that demonetisation has sent a message that those who evade tax are engaging in a form of financial terrorism and that the law is now going to come after them,” says the report. But one of the tallest claims that Kanwal makes is that demonetisation has given India’s economy a ₹5 lakh crore advantage. He derives this from an alleged data point in the report that claims that at the end of April of this year, the total amount of currency in circulation in the economy was ₹14.2 lakh crores, as opposed to ₹17.77 crores at the beginning of demonetisation. This, Kanwal’s article claims, means that a significant amount of cash hoarded by citizens has been eliminated, thus boosting the economy.

If this strikes you as funny, you’re not alone – journalist Mayank Jain also feels that the figures don’t add up. Jain took to Twitter to explain, in detail, why he thinks Kanwal’s assessment of this internal report – summed up pithily in a tweet that trumpets the benefits received by the economy under the demonetisation scheme – is flawed and disengaged from the reality of the country.

Jain explains why the disappearance of this ₹ 5 lakh crore from the economy is not necessarily an advantage at all, but may, in fact, be a signifier of how the poor – who may have been affected the most by demonetisation – are not often even counted in such economic reports. Take a look for yourself at how Jain contests most of the major claims made by Kanwal:

On The Purported Growth In The Income Tax Base:

On The Claim That 2-3 Lakh New PAN Cards Are Being Issued Everyday Post Demonetisation, As Opposed To 1 Lakh Before:

On The Boost In Digital Transactions:

On Banks Reducing The Marginal Cost Of Fund Based Lending Rates (MCLR) Post Demonetisation, And Generally Being More Lenient Towards Consumers:

On The Claim That Demonetisation Has Helped Increase Cashless Transactions At Toll Plazas, Petrol Pumps, Etc, And Online Transactions For The Railways:

And, To Sum Up: