In all of India's economic history, it's hard to find anything quite as indefensible as demonetisation. In fact, its irrationality is world-beating - Narendra Modi promised to put us on the world map, and he has - just not the way we expected. Even bad economic policies, most of the time, "succeed" in some way or the other - they may achieve some of their aims, even if at a very high cost. It's truly rare to come across a policy that fails on every possible yardstick, including those imaginatively invented well after the decision was taken.

But demonetisation seems to have achieved this near-impossible feat. Of course it didn't wipe out black money. We know that now the RBI has confirmed that 99.3 per cent of the demonetised cash was returned. No giant windfall gains accrued to the government thanks to people refusing to return cash. Gautam Adani or Anil Ambani did not have to stand in ATM lines to withdraw spending money. The growth of digital payments has not seen a structural, sustainable increase. People are still throwing stones in Kashmir. And morally, I doubt that we are a significantly more honest nation now than we were on November 8, 2016.

It's true that Arun Jaitley and others repeatedly stress that direct tax revenue has increased sharply - but they compare this to the NDA's poor performance in the two years prior to demonetisation. Go back a little further, to 2013-14 or 2010-11, and the growth in direct taxes over the past two years doesn't seem unusual at all. In fact, as NIPFP's Rathin Roy, a member of the PM's Economic Advisory Council, has put it, "the growth and buoyancy of direct tax revenue in the 2014-17 period is lower than in any sub-period this millennium." This is just another example of the government choosing its base years cleverly in order to claim incredible success.

On November 8, 2016, Prime Minister Narendra Modi had announced the demonetisation of high-value currency notes (File photo)

It may be natural, now, and look back at all those pathetic attempts to rationalise or defend an obviously irrational step with contempt. But spare some pity for all the columnists, economists, CAs and assorted experts who were convinced that, after all, any decision must have some positive fallout if they could just find it. How were they to know that this was that one special policy which would actually have nothing good about it at all? Let me confess that I was among them: while thinking that demonetisation was an awful step, I thought it would at least get people to put more of their money in banks. But, as the RBI also confirmed this week, Indian households are holding more of their savings in cash and not less. In fact, they haven't held this high a proportion of cash for six or seven years. So, yes, I was wrong. I assumed that taking people's cash away meant they would not want to hold so much cash again. But in retrospect, it seems obvious that in fact it is now banks that people will not trust, and not cash. I guess that's what happens when you tell them that they don't have access to their own accounts any more unless they stand in lines longer than first-day-first-show at a Salman Khan movie.

The one argument left for defenders of demonetisation to trot out - since it depends entirely on things that haven't happened yet and may never happen - is that now we know which accounts cash was deposited in, and we will be able therefore to track down people with giant hauls of unaccounted cash. First of all, this is unlikely to work. Think about it - people clever enough to come up with a system to change all their cash under those circumstances are mostly going to be clever enough to not do it under their own names. And secondly, even the attempt to chase up the cash will have a dangerous effect on the economy.

Seriously, the only defence of demonetisation left for the BJP's WhatsApp economists is that it opens up the potential for a raid raj. This is such clever economic policy-making that not even Indira Gandhi came up with it, and I thought she had found every way possible to harass taxpayers and reduce growth.

Congress party workers protesting against demonetisation on the first anniversary of its announcement

So, where's the accountability for the worst economic policy decision of all time? The Governor of the Reserve Bank who signed off on demonetisation - although management of the currency is the RBI's domain - has redeemed himself by clearly revealing the size of the demonetisation disaster. The Finance Minister - who may not even have been in on the planning of the measure - is reduced to writing angry blog posts defending demonetisation. And the government just appointed S Gurumurthy, one of the intellectual giants behind this brilliant plan, to the board of the Reserve Bank of India - so no accountability there either. As for the Prime Minister himself, whom all of us heard saying we should hang him or set him on fire or something if he was proved wrong about demonetisation - well, it joins the long list of things - being tough on China, 'Make in India', the Ganga clean-up, bringing back black money from abroad, and so on - that the Prime Minister never seems to talk about any more.

So, I ask again, where should we look for accountability? Whom can we blame this extraordinary disruption, this bizarre decision, on? I know - perhaps we should wait a few years. And then we can blame it on Nehru.

(Mihir Swarup Sharma is a fellow at the Observer Research Foundation.)

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