An Arthakranti Member Explains How the Government Should Have Implemented Demonetisation

23 November 2016
Anil Bokil, the founder of the think-tank Arthakranti, which was widely hailed to be the brains behind demonetisation, has repeatedly stated that the policy adopted by the Modi government is not in line with their proposal. Amod Phalke, a senior member, explains what Arthakranti's proposal suggested.

Even those from the Arthakranti Pratishtan, a Pune-based think-tank that has widely been hailed as the brains behind the demonetisation announced by Prime Minister Narendra Modi on 8 November 2016, appear to think that the move was hasty. “We acknowledge that the implementation has caused a lot of problems in the short term,” Amod Phalke, a senior member, told me over the phone. “But any attempt to correct such a flawed system will take time and some compromises will have to be made.” Phalke added: “Our stance is simple: we urge the government to be responsive and sensitive to all the problems being faced by the common people currently.”

Since demonetisation was announced, Anil Bokil, Arthakranti’s founder, has stated on several occasions that the policy adopted by the Modi government is not in line with the proposals made by his organisation. “The government has only taken one part of the five-point plan,” Bokil told the journalist Shailesh Menon, referring to Arthakranti’s proposed changes to the economic system, according to a report published in the Economic Times on 22 November 2016. “We had proper transition plan from large currency denominations to smaller ones... They should have stuck to our transition plan at least.” In a report that was published in the Business Standard on the same day, Bokil told the journalist Anup Roy that if the government had “prior knowledge that the high value notes were being used for an imminent terrorist activity,” then Arthakranti had to accept its “overnight banning of high value notes.” “I am saying accept, not that this is what we preferred,” he told Roy.

On 22 November 2016, I spoke to Phalke about the transition plan that Arthakranti had proposed. He explained that a key part of the Arthakranti proposal was not demonetisation, but “currency compression”—bringing down the value of the highest-denomination note that was available in the country. Arthakranti’s proposal, Phalke told me, emphasised the need to move away from higher currency denominations, and recommended that the highest currency in circulation should be Rs 50.

Bokil, a mechanical engineer, founded the Arthakranti Pratishtan—whose name translates to “economic revolution”—in 1995. “Most of us are entrepreneurs from engineering, finance or legal backgrounds that do our independent jobs and also collectively work for the organisation that we set up with a common goal in mind,” said, Adarsh Dhavan, a member of Arthakranti.

The common goal is an economic rejuvenation: Arthakranti believes that India’s current economic system is flawed. To remedy this, it proposes a five-point plan aimed at correcting India’s complex taxation system. The proposal suggests, among other things, the demonetisation of high-denomination notes, and a cap on cash transactions. “The Arthakranti proposal is a well-researched scientific approach designed to completely transform the current Indian socioeconomic scenario,” the think-tank’s website states. “This proposal is politically neutral, it is open for adoption by any political party at national level.”

Kedar Nagarajan is a web reporter at The Caravan.

Keywords: economy finance Cash money demonetisation Arthakranti