Demonetisation rollout ‘deeply flawed’, says Nobel winner Richard Thaler


We finally know what this year’s Nobel prize winner for economics thinks about demonetisation. After the BJP’s IT cell had initially trumpeted Professor Richard H Thaler’s ‘support’ for the exercise, the Nobel laureate has now made his views clear by re-tweeting a screenshot of his response to a student’s query on demonetisation.

“The concept was good as a move to a cashless society to impede corruption but the rollout was deeply flawed and the introduction of the Rs 2000 note makes the motivation for the entire exercise puzzling,” Thaler said.

Thaler’s initial tweet on demonetisation last year in which he appeared to praise the exercise became the BJP’s prized weapon to silence any opposition for the government’s move to devalue old Rs 500 and Rs 1,000 notes. However, the tables have now officially turned after the celebrated economist cleared the air saying that although demonetisation is the first step towards a cashless society, the execution of the process in India was poor.

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In a surprising turn of events, when a student Swaraj Kumar mailed Thaler to end confusion regarding his last year’s tweet on demonetisation, the Nobel prize winner not only answered the query but confirmed its veracity via his official Twitter account.

This is what @R_Thaler told @swarajkumar224 on demonetisation. Those sharing an old cherry picked tweet of Thaler’s do take note.
— Rupa Subramanya (@rupasubramanya) October 15, 2017

Kumar sent a mail asking, “After the announcement of Nobel committee, your tweet on India’s demonetization got a lot of attention and many people are quoting it to support the whole exercise.I know that you have suggested in the past to demonetize higher denomination to reduce corruption and to move towards a cashless society. But I was wondering what’s your thoughts on the execution like demonetizing 86% of the notes in circulation and only 50 days for the note exchange?”

In 2016, when Narendra Modi had announced the rollout of demonetisation, Thaler had extended support via a tweet for the concept of demonetisation. However, the move to introduce a big denomination note of Rs 2,000 didn’t go down well with the Nobel laureate and the proof of this is his reaction on Twitter when one of the Twitteratis pointed it out to him.
This is a policy I have long supported. First step toward cashless and good start on reducing corruption.
Thaler’s tweet had become highlights of election speeches for many BJP leaders and one of them was Uttar Pradesh Chief Minister Yogi Adityanath who had recently praised demonetisation in a rally in Amethi. He had said, “The Nobel Prize for Economics was awarded to the economist who was the first one to welcome demonetisation.”

The BJP’s IT cell head Amit Malviya had re-tweeted Thaler’s initial reaction to demonetisation soon after the economist was announced as the Nobel winner, but did not mention his subsequent clarification.