When the government withdraws a report it had submitted to a parliamentary panel and replaces it with another report that directly contradicts the first one, issues relating to procedure, respect for, and handling of, facts and credibility are involved. The agriculture ministry had told the standing committee on finance two weeks ago that millions of farmers had been affected by the Modi government’s demonetisation of high-value notes two years ago as they were unable to buy seeds and fertilisers for their crops. But within a few days, the government revised the report and said that there was no adverse impact on agriculture. Three officials who had prepared the first report have been issued show-cause notices. The reasons given by the secretary to the department — that the earlier report had not been vetted by him and that there was a “compilation error’’ in it — only expose the government.
It is difficult to see how a compilation error could lead to an opposite conclusion on an issue on which facts are available and there have been discussions and studies in the last two years. The report was prepared by senior officials who are informed and knew what they were doing. The only reasons for reversing the report could be that it went against the public position of the government. Is it right for the government to present a wrong report to a parliamentary committee? When it twists facts and evidence and tries to whitewash an action that disrupted the economy and unsettled the lives of millions of people, it cannot claim any credibility. In retrospect, it has become amply clear that the demonetisation exercise was a serious economic misadventure which did not achieve any of its claimed aims but actually set the economy back. It caused human suffering on a scale and magnitude that no other government decision has caused in the recent past.
Reserve Bank of India Governor Urjit Patel told the same parliamentary panel last week that demonetisation had impacted the economy though, according to him, the effect has passed. The government’s first report only said what Patel said demonetisation did two years ago. The government’s former chief economic adviser Arvind Subramaian has now described demonetisation as a “massive, draconian monetary shock’’ which unhinged the economy for the next seven quarters. Subramanian’s silence then may be questioned, but his view is validated by the experience of those who were affected by the measure and the opinions of most of those who have observed and studied it. The government’s first report shows that truth has a way of emerging from the most unexpected places even in the most protected milieu. Damning it only confirms it further.