India News

Demonetisation hovers like a dark cloud

Published

10 years ago

January 31, 2017

[vc_row][vc_column][vc_column_text]Economic Survey points to the short-term costs which are visible and tangible

By Parsa Venkateshwar Rao Jr

In President Pranab Mukherjee’s address to the Joint Session of Parliament as the Budget Session kicked off on Tuesday, there was a passing reference to demonetisation, in Para 55, of the more-than-an-hour long and 80-paragraph speech. It seemed as though the government (the President’s address is written by the government) did not want to linger too long on the unpleasant fact of demonetisation.

But an hour after President Mukherjee’s speech and after Finance Minister Arun Jaitley laid the Economic Survey 2016-17 on the table of Lok Sabha, Chief Economic Advisor in the Ministry of Finance, Arvind Subramanian, took the floor at the National Media Centre, to explain to the media the salient points of the survey, which is the official assessment of the state of the economy of the year gone by.

The survey had to take the bulls by the horn as it were, and in this case the bull and its horns happen to be Prime Minister Narendra Modi’s November 8, 2016 announcement declaring that Rs 1,000 and Rs 500 notes will cease to be legal tender. Problems followed, and though the ordinary people bore with the acute inconvenience it had created which emboldened the Prime Minister to believe that the people will back his unpopular decision, the Economic Survey could not look away from the issue staring in the face of the economy.

While describing demonetisation in laudatory terms as “a radical governance-cum-social engineering measure”, and seeking to assess the short-term costs and long-term benefits of the move, the survey could not avoid noting that “the costs have nonetheless been real and significant” ; it also said, “The magnitudes of short-term costs remain uncertain, as do the timing and extent of long-term benefits.”

The survey also emphasises what needs to be done to cushion the hard-landing of demonetisation: “…remonetising the economy expeditiously by supplying as much cash as necessary, especially in lower denomination notes; and complementing demonetisation with more incentive-compatible actions such as bringing land and real estate into the GST, reducing taxes and stamp-duties, and ensuring that demonetisation does not lead to over-zealous tax administration.”

But then he places demonetisation as one of the many measures, including the passing of the GST Bill, the setting up of the Monetary Policy Committee (MPC) in the Reserve Bank of India to calibrate interest rates and to manage inflation, giving Aadhaar a legal basis by making the Unique Identification Authority of India (UIAI) a statutory body. The survey does not give demonetisation the status of a game-changer in itself.

In Chapter 3 of the survey, enticingly entitled “Demonetisation: To Deify or Demonise?” it offers a closer look at the decision. It says that “India’s demonetisation is unprecedented in international economic history” because “all other sudden demonetisations have occurred in the context of hyperinflation, wars, political upheavals, or other extreme circumstances. But the Indian economy had been growing at the fastest clip in the world on the back of stable macroeconomics and an impressive set of reforms. In such normal circumstances, demonetisations – such as the one announced recently in Europe – tend to be phased in gradually.”

And the survey tries to explain, if not explain away, demonetisation, in another way: “In the wake of the Global Financial Crisis (GFC), advanced economies have used monetary policy t stimulate growth, stretching its use to domains heretofore considered heretical such as negative interest rate policies and “helicopter drops” of money. In fact, India has given a whole new expression to unconventional monetary policy, with the difference that whereas advanced economies have focused on expanding money supply, India’s demonetisation has reduced it. This policy could be described as “reverse helicopter drop”, or perhaps more accurately a “helicopter hoover”.

It can be seen that the survey tries hard to understand and explain the inexplicable demonetisation move, and it has come to the hard conclusion that this would bring down the growth rate by one-fourth or one-half percentage points.[/vc_column_text][/vc_column][/vc_row]

Related Topics:APN Budget 2017 Demonetisation Economic Survey

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Air India sacks Phuket-Delhi flight pilot after failing drug test

Air India has terminated the Phuket-Delhi flight pilot after a confirmatory test found a psychoactive substance following the August 4 incident.

Published

5 hours ago

September 4, 2026

APNLive Desk

Air India has terminated the employment of the pilot-in-command of a Phuket-Delhi flight after he tested positive for a psychoactive substance.

The pilot was in command of flight AI2379, which was travelling from Phuket to Delhi on August 4 when the aircraft suddenly lost altitude over Odisha. The incident left 24 passengers injured.

Air India said the termination was in line with its zero-tolerance policy regarding safety violations and regulatory requirements.

Air India terminates pilot with immediate effect

In a statement, the Tata-owned airline said the pilot-in-command had tested positive for a psychoactive substance.

The airline said that, considering its zero-tolerance approach to violations related to safety, fitness and regulatory requirements, the pilot’s employment had been terminated with immediate effect.

Air India also said it continues to cooperate fully with the investigation into the incident and has provided access to relevant operational, maintenance and technical records.

What happened on the Phuket-Delhi flight?

According to the preliminary findings of the Aircraft Accident Investigation Bureau (AAIB), the Airbus A320 was carrying 145 people when it experienced the near-simultaneous loss of all three hydraulic systems while cruising at around 36,000 feet.

The technical failure resulted in the autopilot disconnecting and triggered a brief stall warning. The aircraft subsequently lost altitude, resulting in injuries to 24 passengers.

The preliminary report also noted that the pilot tested non-negative for a psychoactive substance in a confirmatory test.

However, the report did not establish that the pilot’s drug-test result caused or contributed to the hydraulic system failure or the subsequent loss of altitude.

AAIB recommends action over psychoactive substance finding

The AAIB described the confirmation of psychoactive substance use as a serious concern and recommended that the Directorate General of Civil Aviation (DGCA) take appropriate action against the pilot on priority.

The investigation into the technical and other aspects of the incident is still underway.

The preliminary report also noted that the co-pilot was flying the aircraft when the incident occurred and attempted to bring the situation under control.

Air India said safety remains its highest priority and that its pilots undergo training, proficiency checks, medical examinations and other regulatory assessments in accordance with applicable requirements.

India News

India offers forensic DNA support to identify Nepal flood victims

India will make forensic laboratory facilities available for DNA profiling of first-degree relatives of people missing after Nepal’s August 26 flash floods.

Published

10 hours ago

September 4, 2026

APNLive Desk

India has offered forensic laboratory support to help identify people who remain missing after the devastating flash floods in Nepal.

The Ministry of External Affairs (MEA) said central and state forensic laboratories in India will make their DNA profiling facilities available for first-degree biological relatives of people missing after the August 26 flash floods in Nepal.

DNA samples can be provided by relatives in India

According to the MEA, first-degree biological relatives living in India can have their biological samples collected and DNA profiles prepared.

The relatives can include a person’s father, mother, son, daughter or sibling. DNA profiling can be carried out at Central Forensic Science Laboratories (CFSLs), State Forensic Science Laboratories (SFSLs), laboratories of the National Forensic Sciences University (NFSU), and NABL-accredited laboratories with DNA profiling capabilities.

The initiative is intended to support Nepal’s ongoing process of identifying mortal remains recovered after the flash floods.

DNA profiles to be compared with unidentified remains

The MEA said the DNA profiling may use Autosomal STR DNA profiling, as advised by Nepal Police, subject to the technical requirements communicated by the Nepali authorities.

Once prepared, DNA profiles and the preliminary information required by Nepalese authorities can be sent to Nepal Police by email for comparison with DNA profiles obtained from unidentified mortal remains.

The Indian Embassy in Kathmandu will also facilitate coordination, with copies of the DNA profiles to be shared with the embassy for this purpose.

Nepal flood death toll rises

The death toll from the flash floods has risen to at least 1,259, according to Nepalese authorities, after rescue workers recovered additional bodies from affected areas.

More than 12,000 people have been rescued, while around 5,000 people remain missing as search and rescue operations continue.

The flash floods, which followed an ice-rock avalanche near the Nepal-Tibet border, caused extensive destruction across towns and villages in northern and central Nepal.

India News

PM Modi hails ISRO after successful GSLV-F17 launch, calls it proud moment

PM Modi congratulated ISRO after GSLV-F17 successfully launched EOS-05, calling the achievement a proud moment for India.

Published

15 hours ago

September 4, 2026

APNLive Desk

Prime Minister Narendra Modi on Friday congratulated the Indian Space Research Organisation (ISRO) after the successful launch of the GSLV-F17 rocket carrying the EOS-05 Earth observation satellite, describing the achievement as a proud moment for the nation.

The GSLV-F17 lifted off at 2:55 a.m. IST from the Satish Dhawan Space Centre in Sriharikota, Andhra Pradesh. The EOS-05 satellite was subsequently placed into its designated sub-geosynchronous transfer orbit.

PM Modi praises ISRO’s growing capabilities

In a post on X, PM Modi said the successful mission reflected the excellence, innovation and expanding capabilities of India’s space sector.

Yet another outstanding achievement by ISRO and a proud moment for our nation.

The successful launch of GSLV-F17 carrying EOS-05, India’s first-ever imaging satellite from Geosynchronous orbit is a reflection of the excellence, innovation and growing capabilities that define… https://t.co/fXzwnSmwAF
— Narendra Modi (@narendramodi) September 4, 2026

He also highlighted the growing partnership between ISRO and Indian industry, saying it was strengthening India’s space programme and expanding capabilities across the wider space ecosystem.

The prime minister described the successful launch of GSLV-F17 carrying EOS-05 as another outstanding achievement by ISRO and a matter of national pride.

EOS-05 strengthens earth observation capabilities

According to the report, EOS-05 is India’s first-ever imaging satellite from geosynchronous orbit. The satellite is designed to provide continuous observation of the country from an altitude of nearly 36,000 km above Earth.

The mission is expected to strengthen India’s earth observation capabilities and support advanced imaging and observation applications.

ISRO Chairman Dr V Narayanan expressed satisfaction with the mission, saying the satellite was precisely injected into its intended orbit.

Mission Director Thomas Kurian described the launch as a significant milestone for the GSLV programme. He said it was the 19th flight of the GSLV and noted that EOS-05 is the heaviest satellite the launch vehicle has placed into a geosynchronous transfer orbit or sub-GTO orbit.

GSLV-F17 launch vehicle details

The GSLV-F17 stands 51.7 metres tall and has an approximate liftoff mass of 420.5 tonnes.

Science and Technology Minister Jitendra Singh also congratulated the ISRO team following the successful mission. He described EOS-05 as a state-of-the-art Earth observation satellite capable of advanced imaging across visible, infrared, multispectral and hyperspectral bands.