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'India's central bank doesn't decide anything, Modi does'

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Inserted: 16:28, Wednesday 11 January 2017 || Updated: 12:00, Thursday 12 January 2017

'India's central bank doesn't decide anything, Modi does' - World
Nobel laureate Amartya Sen during a shooting for a documentary film on him, at Visva-Bharati University, Santiniketan in Birbhum district of West Bengal on December 29, 2016. (PTI)

New Delhi: Two months after Prime Minister Narendra Modi's demonetisation move, world renowned economist and Nobel laureate Amartya Sen spoke to India Today's Karan Thapar about the aims and achievements of the move and its consequences, reports The Hindustan Times.

"It is a gigantic mistake, both in terms of its objective of dealing with corruption as well as the objective of one rapid jump of getting into a cashless economy," Sen said while talking about note ban.

The Nobel Prize winner asked if it was fair to demonetise 86 per cent of all currency to tackle black money.

"These statistics were known to everyone and it must have been known to the Prime Minister as well. So if there is only 6 to 7 per cent of black money in cash, how do you expect to have a major victory? It is puzzling to me," said Amartya Sen.


The economist feels that the policy has affected a large section of people in India as it was taken unilaterally by the Centre.

"It was indeed not even the whole of the Central government, it was a very small group around Modi. So the biggest question here, with the State Assembly elections approaching, is there an issue of federalism that needs to be addressed?," Sen asked.

When asked about why the support towards Modi's continues to soar Amartya Sen said, "Modi is a very good political leader, there is no doubt about it. He can certainly convince people so the Modi magic is there. But this is Modi's Napoleon moment."


The 19th century French conqueror Napoleon is known for cultivating an infallible image through his propaganda. He garnered immense public support by capitalising on his victories. During his tenure he floated literature and various publications that exaggerated his accomplishments.

"Napoleon after his attempt to raid on Russia, on his way back, said that actually he did not wanted to do anything , just wanted to do an excursion into the snowy mountains of Russia," said Sen.


Further emphasising on the role of the Reserve Bank of India, the noted economists said that RBI was simply following Prime Minister Modi's order.  He said that while the government failed to eliminate black money, it leaped towards digitisation from corruption. According to him the Modi government changed its focus midcourse.

The economist said that corruption continues to worry the nation. He added that black money creation will continue.

The demonetisation decision was taken by small group of people, he said, adding state governments should have been consulted as India has a federal polity.

The government in a surprise move demonetised Rs 500 and Rs 1,000 notes, which constituted 86 per cent of the currency, from midnight of November 8.

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