I am not an economist or a sociologist. These are my personal observations.
Ordinary citizen is not a monolith in India. Ordinary citizen can be subdivided into (with overlap)
1. Middle Class
2. Salaried Class
3. Farmers
4. Daily Wage Workers
5. Unskilled, Semi-skilled and skilled working in Unorganized sector.
6. ... and so on
Different people were inconvenienced to different extent. Middle class salaried category was inconvenienced to the extent that there was a cash crunch and India being a cash economy buying stuff became difficult for a few days.
The ruling party the BJP won a major state election with record margin just 4 months after demonetization. Probably a large majority was not too much inconvenienced. BJP also re-aligned with a political ally in another major state. Had ordinary people being inconvenienced as some stories in media and reports suggest BJP would have become a political pariah.
A lot of money has come back to the banking system. How it happened is another long story. This has reduced bank lending rates. Banks are offering housing, business and other loans at a lower rate.
>> Had ordinary people being inconvenienced as some stories in media and reports suggest BJP would have become a political pariah.
Chalk it up to the successful propaganda by the party. Anybody against it was either a corrupt/black money hoarder or unpatriotic or both.Nobody wanted to be labeled that with the growing nationalism. Of all the leaders of corporate houses only one spoke out against demonetization.
>> This has reduced bank lending rates. Banks are offering housing, business and other loans at a lower rate.
Yes, a major side-effect of this is that banks flushed with cash can show a reduction in NPAs(which is a major crisis India's banking sector is grappling with), and can freely lend again, which will lead to more NPAs down the line.
Yes - basically everything about this move was bad but BJP is so politically skillful that not only they came out unscathed but continued winning!
And nice try on using NPAs as an argument. Not denying it could have been a factor but simply saying that was the reason the govt made such a big move vs. potential tax benefits & getting ppl to open more bank accounts seems ignorant.
