Anglo-saxon impositions and its implications

How can we be sure democracies work in Islamic countries?

Is India secular?

 Is liberal democracy the end of history or are we on our way to form communist societies anytime even in the distant future?

All the words in bold are not conceptualised by most of the nation states on their own. Yet, individuals of these nation states inspired by these western ideals have tried to imbibe these virtues on their fellow citizens or at times these have been forced on nation states sometimes ignoring their social-political-cultural context. This post will concentrate on the last question which I believe has had enormous ramifications in the countries and regions which either ‘tried’ or are ‘trying’ variants of Socialism or liberal democracy.

Both these Anglo-Saxon thoughts which dominate the world today come from some basic set of assumptions. This post will merely look at the assumptions that have shaped our worldview. Karl Marx asserted that economic forces are the primary forces that propel mankind through history as social classes interact. As economic forces develop (through technology/skill upgradation), class struggle intensifies eventually resulting in a ruling class (bourgeois) and a lower class (proletariat). Again from this ruling class, a new lower class emerges and new cycle of class struggle ensues till the end of history. In the current setup, capitalists are the ruling class and industrial workers are the lower class. The resistance of ruling class to prevent improvement of economic forces of the lower classes lead to revolution. The lower classes stuck in the role of wage labour prevents them from freedom to “do one thing today and another tomorrow, to hunt in the morning, to fish in the afternoon, rear cattle in the evening, criticise after dinner without ever becoming hunter, fisherman, shepherd or a critic”. He believed this as communism, a utopia one can achieve post-capitalism.

Thomas Hobbes on the other hand without getting into history of mankind or societies believed that humans by nature were animalistic with finite collection of needs, instincts, wants and passions. Other men came in their way of attaining these basic collection of needs. If man’s life was protected, he can set about reaching these material aspirations. John Locke took this forward and set about to conceptualise a liberal democratic state which guaranteed self-preservation and also provided rights to acquire abundant wealth (private property). This also sought man to be educated to subdue his desire for recognition and acquire all the material wealth he wants. This warranted a capitalistic economic system to facilitate production and a democracy to facilitate (re)distribution.

The sharpest critique of  liberal democracy came from aristocratic traditionalists like Nietzsche. Nietzsche despised a liberal democratic order that created a society of bourgeois (a rare agreement with Marx) which aspired for nothing greater than own comfortable self-preservation. In other words, he loathed the materialistic tradition devoid of any excellence in culture, art and stripping down man into shamelessness of purely desiring his wants.

I made a rough sketch (see below) to map the schools of thought and their tradition. These labels and their positions (and the clubbing of political and economic systems) maybe somewhat debatable, but they should be largely agreeable and are useful to make my point.

Slide1

As an Indian reading the thought process of their conception of man, I am often at a loss if any of these assumptions actually correlate with the Indian conception of humankind. A few examples in order –

  1. Our history and our people are rooted in Dharma, which is far from the materialistic tradition espoused by these scholars.
  2. Our history is not unidirectional, but cyclical, closest to ancient Greek beliefs (Aristotle, Plato).
  3. Historical process has not resulted in changing social or historical relationships. Rather, it has resulted in juxtaposition which is there for us to see – Caste system, feudal relationships, capitalist relationships, marginal tribal societies etc.
  4. Historical process is not as continuous as assumed in the western schools of thought, again there is a juxtaposition of various times within India.
  5. Individuals live their entire lives following religious and cultural traditions to fulfil their karma and attain moksha.
  6. While there have been social reform movements at different times, the ‘radical’ thought has been absorbed into the polytheist sanathan dharmic fold, rather than ‘resolution of contradiction’ process. Moreover, economic values have been subservient to morals in most of the oral traditions that one is aware of.

With these assumptions being questionable, one should have wondered if these political and economic systems which we have imposed on ourselves are valid or if the context made sense.

The result in my opinion is the wide distance between the four pillars in the sketch. Largely traditional society has to come to terms with modern urban society, modern state, modern constitution and disconnected Indian establishment represented by the elites in academia and media.  The forced modernisation program is still in progress, but the society trudges along in a perpetual flux.

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Fundamental Issues with Political consulting

Economic Times reported that an internal review was conducted by the Congress Party to understand its failure in Uttar Pradesh elections. I found one point in this report interesting.

‘The mismatch with Team PK has been cited as another key reason for the defeat. Most candidates complained that Prashant Kishor’s team gave little or no support to them, was absent in most constituencies and ended up complicating things for candidates where they turned up. Frontal organisation members said that Kishor and his team only worked to undermine Congress and had collected data that it could misuse in 2019.’

Prashant Kishor in the past has consulted the successful campaigns of the BJP and the JD(U). The USP of this breed of consulting is its ability to use specialised private sector tools like big data analytics on political space ranging from national to booth level. They facilitate messaging and campaigning across all media – electronic, print, door-door and social media platforms (whatsapp, twitter, facebook etc.). While these skillset requirements have brought in a wide array of specialists and technocrats into the political domain, question still remains to be largely fundamental – loyalty. Basic issue with political consulting is that this consulting by its very definition, political.

Closest analogy to this would be how a politician switching a party is treated (in this example, the politician is changing party due to its winnability and his short-medium term prospects). A politician though viewed with suspicion by his new colleagues does bring in cadre and core voters. He will need to spend a substantial time setting up his career in the new party and to get acceptance by his colleagues.

Same cannot be said the same about political consultants. Much like private sector consulting, there is no real ‘skin-in-the-game’ (read Taleb to know what I mean). In fact, in one of my interactions with a political consultant, I asked him how would he work with a party if there were sharp political differences? He replied that he worked with leaders for their leadership abilities and not with parties. No surprise then that party cannot fully support an outsider and vice versa.  While skills that are brought in are useful, they often tend to be very short term engagements, like say an election.

Downside to political parties are high. Consultants do not merely provide an agnostic service like streamlining operations etc., but often collect data, strategies and at times manage the entire election. These form trade secrets of the political parties. With minimal trade secret protection available in India for any sector (private as well), a mere contract may not be sufficient to instil confidence among both the consultant and the client.

In this backdrop, one more contradiction comes to the fore. Political party, normally bound by ideology and party line has singular organisational goal of improving party prospects. Consultants, on the other hand, might have a contradictory goal of increasing its clientele either to understand the space better or to hedge risks or simply to make more money.

A few options come to my mind. (very nascent thought process so far, so bear with me)

Consulting firms may want to provide some of its services as products and decision making tools that are party agnostic and reduce its involvement. Further engagement and intelligence may continue to be offered as a service. This may sound unrealistic as subjectivity remains high in a diverse country like India. But, separate projects and assignments dedicated to specific regions and micro-geographies can be achieved. (this is unlikely to happen as politics involves human element more than other fields)

Consultants may consider embracing a broad political or ideological stand. This is a useful signalling to political parties and its members and adds a layer of ideological security for parties before accepting services.  The flip side is that it reduces the possible number of clients. If not ideological, broad value goals need to be embraced and disclosed publicly.

Consultants will have to change the way they perceive politicians and deal with political parties. Quite rightly, the legitimacy of a consultant is and will be questioned continuously. To short circuit one’s way into politics may backfire and is not a useful strategy. Politicians are more than happy to acknowledge thought leaders of other sectors, but are insecure of their own and consultants should not appear to be usurping their raison detre.

I personally feel political consulting would do well for itself if it takes a political stand rather than garb of  apolitical neutrality.

New age cabs and road safety

Being a local helps in having lengthy candid conversations if you’re the chatty type and you happen to take a cab or a rickshaw in Bengaluru. Recently, I booked a cab through one of the 3rd party cab aggregator’s app and a young chap in his 20s shared his experience as a driver working for the cab aggregator. For starters, he could not boast enough about the money he made (ranging from 30-40k per month). This was quite heartening as I knew that drivers earlier made anywhere ranging from 10k-20k a month and this required them to dedicate their entire time on one customer 24×7. Also, as a consumer we did not have to haggle with them like we used to with auto rickshaw fellows. I was feeling good about this.

There were riders though. As he zipped through the city at usual ‘cab speeds’, he explained how this worked. Cab aggregator would take a cut out of each ride as they connected them to the consumers and this costed them infrastructure which was mostly built with VC’s capital, most plausibly in a financially unsustainable manner. However, if they managed to earn enough money (fixed from time to time by the aggregator) in a single day, no commission would be deducted. Most drivers would prefer meeting these targets in 3-4 days a week. This would ensure around 16k a week and excluding diesel, they can send home around 10k a week. He even joked about how his father would be suspicious of such quick earnings.

At this juncture, he gave me the shocker. He had been on a shift for over 24 hours! His usual ‘cab speed’ suddenly started scaring me. I am not sure, any human can survive Bengaluru’s traffic throughout the day and remain sane. While we advised him its unsafe personally and got off at our destination, a friend reminded me of an incident involving a cabbie crashing into a British Airways employee who was cycling to work on Airport Road. I missed this news item at the time which does raise the same point I am trying to make. Even if I had read it, it probably would not have made any impact as the issue would still have remained somewhat distant.

I do not advocate any ban, but certainly, this issue should have come to the fore when the governments at national and state level decided to regulate this sector. In fact they did address this issue maybe not in as many words.

At the national level, Ministry of Road Transport and Highways released the ‘Report of the Committee Constituted to Propose Taxi Policy Guideline to Promote Urban Mobility’

Recommendation 14:

‘States may place appropriate cap on the duty hours of drivers in the interest of road safety and in consonance with labour laws.’

At the state level, Transport Department issued ‘The Karnataka on- demand Transportation Technology Aggregators Rules, 2016’ . This was subsequently upheld by the High Court of Karnataka.

10 (1) (i) of the rules state

The driver shall not be allowed to work beyond the maximum number of hours as stipulated under Motor Transport Workers Act 1961.(Central Act No 27 of 1961)’

Section 25 of the Karnataka Motor Transport Workers Rules 1964  states that maximum cap is 16 hours a day, 72 hours a week. The exceptional circumstances require chief inspector’s approval (10 hours a day is the norm, even 16 hours is exceptional).

There are some possible legal issues. Even though Motor Transport Workers rules are inserted in the rules that are to be followed by the aggregator, the rules written originally in 1960s was intended at taxi cab owners who hired drivers. In this case, the aggregator may claim that he technically does not own the cab and it is the volition of individual cab owners who themselves mostly drive.

Legal technicalities aside, I feel it is a public safety issue to allow ‘zombie’ drivers to ply the roads and I am not sure the cab aggregators are doing much to regulate driver behaviour although technology allows them to monitor the hours of work put in by these overworked drivers.

 

 

 

 

Initial thoughts on lake management

( Initial thoughts that came to my mind when I did some preliminary reading on Bangalore lakes, it eventually culminated in a newspaper oped coauthored with Shrimoyee Bhattacharya when I was interning at CSTEP  http://www.deccanherald.com/content/597409/reclaiming-blurus-natural-water-systems.html  )

 

A brief literature review of depletion of lakes and other water bodies in Bangalore informs us that this topic has been in popular discourse for quite some time now. Starting with Lakshman Rau Committee report in 1986, AT Ramaswamy Committee Report in 2007, NK Patil Report to the High Court in 2011 and BV Balasubramanian task force report of 2011, all of them expressed the ground realities, catalogued specific incidents of crimes and exposed governance faultlines. While these make for interesting and depressing read, they are significant due to the fact that they were commissioned by the state machinery (I am including Judiciary to be part of the state), there are also handful of high court rulings and plenty of reports from civil society organizations and academia, the latest being the doomsday scenario predicted by researchers from the Indian Institute of Science. One wonders, how is it that we are still discussing the same problem?

The basic premise behind each of these painstaking studies on top of the previous one is that government is intending to implement the findings. But what we fail to understand is that government is not a monolithic black box. It needs to be uncovered to understand why very few of the findings make it to policies in a piecemeal fashion. In addition to the understanding of governance machinery and its intricacies, there is a greater need to understand other agents in this demand of lakes which we hold so dearly.

For the sake of convenience and simplicity, I will unpack this system in an economic sense of supply-demand and introduce dynamics through causal linkages. The product we are interested in is lakes and its associated natural drainage system.  Since, it is essentially a public good, the supplier of this product to be the government. A starting point of supply side analysis would be to ask ourselves the question, which government?

This is where the first set of issues begin. There are no clear property rights assigned to a government department or a level of government. Currently, the agencies impacting lakes are – BBMP, BDA, LDA, KSPCB, BWSSB and KFD (There can also be additions – KIADB and KHB). This unclear demarcation while some might argue is a necessary instrument of the state to maximize rent seeking adds additional difficulties in our simple supply demand model – information asymmetry. This is the information asymmetry between government agency and the demand side agents – the citizens. Even a law-abiding citizen concerned about lakes often does not know who is the custodian of the neighbourhood lake easily. There is also information asymmetry within departments on the action one can or supposed to take due to unclear assignment of property rights.

If we were to relax this proposition of information asymmetry between departments, a reading of legislations and the reports commissioned by the government convinces any reader that there are sufficient legal powers to ensure protection of lakes, storm water drains from encroachments and its pollution.  There are twin problems with implementation that come to the fore – priorities and principal-agent problem. Regarding the former, Government has to tackle tradeoff between housing for new urban migrants and lakes. This would mean despite laws, government machinery at the top of the ladder does not care about the implementation relating to the protection of the lakes. The latter is the converse of the former problem, government machinery at the top is benevolent towards lakes and implementing new legislations to protect the lakes, but the low rung machinery or the agents are resisting these changes for reasons ranging from conflicting command-control messages or self-interest.

There may be truth in both and one might concede that public goods like lakes cannot be protected by the government at all and be inclined to privatize these by assigning property rights to private developers like in the case of Hebbal Lake by the then toothless LDA. Government may also occasionally blame the users of services – citizens of the city who need behavioural change. Political functionaries may not see merit in protecting lakes as it may not bring in any political currency i.e. votes. This brings us to the important question of citizens. Are citizens a monolithic block? Do Bangaloreans really want to protect lakes?

Is there a demand for lakes in Bangalore?  Real estate as an investment instrument has meant, constantly try to purchase multiple properties and if this leads to lock in land, then this reinforces property price increase and other agents will mimic behaviour. Alienation is common in urban lives where there is no real stakeholdership unlike rural areas and commons typically fall victim in this setting. It is also possible that migration and temporary residentship would reduce the stake of citizens in this cause. Sometimes, it is possible that minimal exposure can lead to lack of conceptualization of how a city should grow. While these are behavioral, there are two systemic effects – hysteresis of corruption and lack of information. First, there is a good possibility that most of us are living in an illegal dwelling. The system perpetuated this behavior making us easy targets for discretionary state power. Lack of information can be handicap for an urban citizen. We take water for granted as if we have a piped water connection. We find alternatives like water tankers run by the mafia when we do not have access to it. We expect low prices without wondering about the cost of the service. The same goes for sewerage disposal, sometimes into lakes, tanks and storm water drainage.

The last point is pertinent and can act as an important signaling mechanism to the demand side agents. Pricing of water supply might be incorporating cost of pumping either from underground or Cauvery, but does it incorporate the risks of drought, opportunity cost and future impact of lake depletion due to occupying the tank bed? Does it make sense to legalize more groundwater pumping by tanker companies which are anyway operating in black market, but ensure the pricing? These questions are worth pondering when there is a clear case of widespread governance failure. The signaling can have far reaching consequences. It will be interesting to test the hypothesis that water usage when delivered by tankers is more restricting and conserving compared to piped connections. This should not discard the equity considerations. But a true pricing can remain a precursor to other schemes. This will be an attempt at driving the point about the acute water issues facing the city. True demand of water when priced appropriately makes citizens stakeholders and not free-ride on public resource. This also places citizens as stakeholders as opposed to lake or environment. Compared to other systemic changes for governance models which are elaborated in detail in various reports, this does not require multi-agency rejigs, but accurate accounting and political will which in my opinion is less than other recommendations. At the very least, accounting and measurement of this is a necessity before implementation.

To summarize, there are three major verticals along which the fight for lakes should be rerouted:

  • Information relating to agencies responsible for water bodies etc., regulations, violations.
  • Assignment of property rights of water bodies, water networks, associated extended perimeter and its maintenance (including treatment of polluted sewage, desilting etc.) to single agency which is supplier, maintainer and regulator.
  • Accounting for unsustainable path of water supply, lake management, sewerage, drainage and disclosure of the costs. Pricing water on the basis of the same.

Right Wing Ecosystem Paradox

I am a self confessed sympathiser of the right (culturally and economically). Lot of it had to do with my relatives and my own upbringing. However, this did not deter me from being critical about politics and the policy space, right or the left. There were inconsistencies, back-tracking, outright lying in politics. In the last 7-10 years, I have been observing the policies, particularly the economic policies. All was fine as long as my day job was of an engineer. It helped really. I did not remember what history was taught (barring major events) in my school. So, unlearning was fairly simple when there is access to the internet and twitter (especially the smart handles).

With common sense, general awareness, and societal upbringing, there was a clarity in terms of what the society should look like. However, it was when I entered social sciences through public policy masters that I realised that social sciences was in a sense ‘disconnected’ from the mainstream understanding. I do not mean ‘disconnected’ in a pejorative sense yet,  just that all my old friends, my social circle could not relate to or endorse any of the views shared by most of my peers. At an individual level, this was brilliant! It helped me meet a diverse set of students, majority who would not share my opinion. This helped me strengthen my opinion when I found the counter-arguments to be unconvincing and soften my stance when I was on a weak footing.

The former though, the cases where right leaning arguments were strongest in my opinion were missing in the academic discourse altogether. For example, the standard suggestion for a good research periodical would be the Economic and the Political Weekly (EPW) in India. Even glancing the titles of the papers would fairly give you an idea that the writings were heavily oriented towards the left. Well, initially I felt maybe it was an academic bias by the professors. I was wrong. EPW is a solid periodical when it comes to political and economic issues and there was nothing to match on the other side of the spectrum. The positive qualifier is purely because the periodical covered a wide range of social issues and the research at least had rigour albeit following questionable methodology at times.

The questionable methodology (overbearing marxist historiography, social construction taken to logical madness!) did not attain its ‘zenith’ overnight. The discourse suited the political class as class and caste divisions helped them maintain power relations.  Such a reputation could have been made possible only by nurturing an ecosystem for a long time. The Congress party, though far from the marxist ideology today maintained state patronage to a barrage of historians, economists, sociologists etc (Arun Shourie has gone into painstaking details regarding this in Eminent Historians). Speaking of history, primary commentators of the time  were no more interesting. Citations moved from Sarkar, Kane to Kosambi, Panikkar, Thapar and in some time Doniger. Court historians ‘exaggerated’, but their own political economy conjectures were more real.

We are taught in class that feudalism is juxtaposed with capitalism in a country like India, I can totally buy that since I can see these traits in their eminencies where they are gleefully accepting state patronage like vassals. In this context, BJP which won overwhelming majority in 2014 despite wanting to build a right wing ecosystem cannot undo this. For starters, with a voter base which comes from  poor and middle classes and  elite technocrats and NRIs do not have a day job of writing social science textbooks or teaching history.

This is the paradox where this government cannot find  historians who can correct our histories and upgrade our social sciences pedagogy in general. And any correction will be seen as a disruption by the establishment ‘scholars’ and all we are left with is ‘Award Wapsi’.

So where do we stand today? We are at a point where a significant number of youth are learning that mammary glands are social constructs, Aurangzeb was a pious human being forced to do untoward things due to the political economy and that democratic mandates are not acceptable when the candidature is not approved by intelligentsia. It is fine really! such universities have become universes disconnected from the ones we live in. What choice do these kids have? Their bread and butter is largely going to come from academia as it is almost compulsory for them to do a post grad and a PhD before any contribution to the society even in academia. This requires persistent subservience to the intelligent masters who dictate fellowships and scholarships.

As far as the right is concerned, it is almost mandatory to rebut in a fact-based manner at least in quasi-academic domains by writing non-fiction books, media etc. There has been some headway here, but a lot needs to be done to free the gulags disguising as universities.

Political notes after UP elections 2017

This marks a milestone in the current administration’s tenure and here are a few pointers.

1. It marks a truly presidential form of campaigning for state elections. The form  isn’t really presidential in the sense that a state leader isn’t asking you to vote for him/her to lead your state, but asking you to trust him/her with a political appointee. This screws up local political dynamics and equilibrium and this is akin to high command culture instilled by Congress during Indira Gandhi era. Th positive from this change is that  voters  are coming to terms with structural change that has been happening in local geographies where national capital affects day to day living in municipalities(e.g. an sez comes due up central govt initiative and this demands land reallocation involving citizens in an urban or periurban area). The negative is this continues the confusion among voters regarding who provides them services. Will the voter be in a position to demand answers from the Prime minister when municipal or state service is not delivered?

2. Narendra Modi and Amit Shah lead the new era of ruthless leaders whose breadth  of ambition is unsurpassable. People often ask why modi campaigns so much in state elections and these questions are high pitched when the Bjp loses election. I would say that the Bjp doesn’t want to give any seat, National, state or municipal freely to the opposition. This level of ruthlessness is unseen in the recent past.

3. While Bjp would have been mighty pleased if Congress didn’t win Punjab and AAP ate into it’d vote share, there are some positives. AAP like anarchist outfit is too risky to have for a border state (esp as AAP has been making pro-khalistani remarks). Secondly, good that Bjp hasn’t broke its alliance with akali, the bonds have been forged during difficult times  and one election should not change that. This relationship has provided important stability and balance to the region in terms of checking subnationalism and maintaining Hindu Sikh bonhomie. They’re out for other reasons and that’s fair enough.

4. Demonetization is a mighty popular move among the poor as I’ve pointed out before and some attribution is possible in this election.

5. This round of elections gives plenty of rajya sabha seats(in the last year of Central government term)  and bjp has a unique opportunity in terms of pushing long lasting reforms (GST type) whose short term costs are not short enough affecting 2019 elections.

Demonetisation – short post

I will not dwell into details as most of us have kept ourselves abreast with the happenings and has impacted our day to day life. A few thoughts I would like to share.

  1. Gutsy – Super gutsy. Mr. Modi clearly posturing as a variant of Lee Kuan Yew without any institutions to support him. His belief from the Gujarat days has been to make things work albeit using a cracked system. He continues this problematic path taking citizens into confidence.
  2. Political victory – Long term political implications yet to be seen as this depends on how long the costs are likely to lasts – impact is not merely on personal disposable income, but microeconomies nationwide. He will lose out on several voting blocs if tax administration goes after the trading class who also like to fashion themselves as middle class like us the IT crowd. He is hoping to gain new constituencies likely from the poor who perceive this as anti-rich at the moment and if this is followed by a few rich behind bars. Coming to other political parties, they are headless chickens right now not able to gauge the mood and the BJP has somewhat successfully again created binaries of us v them, them being black money hoarders.
  3. More state –  Many of us may feel queasy about this new development, especially for the first time, my generation had to move away from private life and stand in long queues because of a policy as opposed to living in the silo of private sector urbanism. This is also the kind of state which does not mind imposing great costs for external gains on political, economic and behavioural front. I have not yet made up my mind if that is a good thing or not especially since things are woefully slow in our country. One thing for sure – there are two groups that come to my mind who should think twice before complaining -Marxists : They have gone into great pains in thought control and cultural revolutions using state power and should not have any pain in standing in queues (remember Venezuela?) and its a tad bit ironical when they are worried about property rights etc at this point in time. Fellow Policy enthusiasts and budding advocates: This is for a few of my friends who are complaining about short term costs, but aren’t policies done looking into the future and that vision. Is it not part of policy process 101? There are other issues with this policy, but this should not be one of them. Every policy instrument has pain and gain like an interest rate change or inflation which has high impact and at times crippling for businesses and the poor likewise. In this context, found Pratap Bhanu Mehta to be absurd and confused.
  4. Is it pro-poor: Depends. How long is economic shock likely to last. It is definitely not Dec 31. I am inclined to believe that the poor can dispose off 500/1000s conservatively in 2-3 queues and time poverty effect is not very high. It is the economic shock and freezing of markets that is a concern. It looks like exceptions after exceptions are coming into fore to protect them. Moreover, it is definitely likely their efforts are going to be compensated by some splurge in public spending before election years which are tangible if estimates of revenue gains that are floating around hold good.
  5. Shoddy Implementation – There is no sugar coating around this. The rusted frames of bureaucracy comes into full glare when we take monumental decisions like this. Day after day new notifications often unclear are coming about. One might say this is the maximum planning possible given the circumstances, but there is lack of coherence in the daily notifications by RBI as well.
  6. Policy Issues – This is the biggest criticism one can lay at this move. There are lot of assumptions about black money which is likely to be incorrect and can prove risky. There is also unclear intent – Was the intention to accrue one time revenue ? Was it to move to less cash society as the PM suggested ? Is it just an income declaration scheme?  If it is black money, then why this sudden fetish for less cash society ? This has to be an extremely costly thing to do for promoting less cash society.
  7. Positive externalities – Policy may not prove to address the problem of black money at all, but there will be significant spillover which will make economy more efficient by bringing into the system. As pointed out, this is an extremely costly way of doing it. But we cannot discard the benefits from such a move.

To conclude, wait and watch. My feeling is its a political victory, a one time wealth tax on black money hoarders, lots of economy wide behavioural change for the good and a windfall revenue for populist schemes in the coming year (Not a big fan of this though). Black money as pointed out umpteen number of times is still very much there and lots more to be done.