Business

Note ban opens up new channels of corruption: Austrian economist

| | New Delhi

 Describing demonetisation as an attempt ‘akin to striking a rock with an egg’, eminent Austrian economist Heinz D Kurz has said it is ‘much too weak and misdirected an instrument’ to root out corruption.

Actually, he said, the Indian government’s move opened up new avenues of corruption.

“As far as I understand the situation, the policy of demonetisation has already been abandoned by the Government, because it turned out to be an attempt akin to striking a rock with an egg.

“I strongly doubt that the demonetisation exercise will root out corruption and engender more transparency. It is much too weak and misdirected an instrument to achieve these goals,” Kurz told the news agency in an interview.

“By introducing the Rs 2,000 banknote, a currency of twice or even four times the value of the banknotes that have been declared illegal, in the system... This can hardly be called demonetisation,” he added.

Kurz is a professor of economics at the University of Graz, Austria.

Noting that while the goal of fighting corruption is laudable, he said: “I consider it to be singularly naive to think that this can be done by banning some banknotes.

“There appears also to be evidence that the policy of demonetisation opened new channels of corruption.”

Kurz pointed out that whoever was informed about the demonetisation policy ahead of its introduction (sort of insider trading) could have used the information and laundered money.

Also, he further said Rs 500 and Rs 1,000 banknotes brought to banks were apparently counted, but not scrutinised as to whether it was ‘counterfeit money’.

Asked about impact of demonetisation on India’s economic growth, Kurz said that “first, it is much too early to assess already the impact of demonetisation, which will show up only later. Secondly, the data published are rough estimates that do not, and could not possibly, take account of this impact”.

“It would therefore be wrong to infer that demonetisation had no effect on the economy,” he noted.

The Indian economy is going pretty strong, Kurtz said, adding however that not well thought out policies such as the demonetisation project have the potential of affecting it badly.

He said rising social tensions between different strata of society and different religious beliefs, environmental degradation and pollution, unequal access to information, knowledge and learning, and a highly uneven distribution of income and wealth are the main problems India is facing, which all affect economic performance of the country.

“Policies that improve the situation in these regards deem to me to be favourable for a more prosperous and just society,” he said.                      

 
 
 
 
 

TOP STORIES

Sunday Edition

View All

Zuma’s downfall gives ANC a final chance

18 Feb 2018 | Gwynne Dyer

Now that Jacob Zuma has finally exited, the African National Congress, which has fallen a long way from its glory days, has one last chance to rebuild its reputation before next year’s election. Whether the ANC is the best bet for South Africans is a different question altogether As a passer-by in the upscale Johannesburg suburb of Saxonwold observed, the South African Police would never have raided the enormous, high-walled compound...

Read More

STATE EDITIONS

View All

Police recover illegal coal, seize five motorbikes

19 Feb 2018 | SURESH NIKHAR | Bokaro

A police team of Bokaro Thermal police station headed by inspector cum officer-in charge Parmeshwar Leyangi on Sunday morning conducted raids at Ganjutola in Armo forest area here and seized approx 2.5 tonnes of illegal coal along with their 4 motorcycles and 5 cycles,said Bokaro SP Kartik S...

Read More

Page generated in 0.3825 seconds.