Stop blaming demonetisation for everything! Raj Kundra's losses, HT job cuts can't just be blamed on Modi

Yes, businesses have been affected by demonetisation but can it affect the market so much so as to bring down a company within 2 months?

The headlines on Sunday stated that celebrity couple Raj Kundra and Shilpa Shetty are staring at an uncertain future after the former resigned as CEO of the home shopping channel – Best Deal TV – owned by them. Kundra in his resignation mail quoted demonetisation as one of the reasons for the losses to the company. But some of the headlines claimed that the couple was “going bankrupt because of demonetisation”.

Yes, businesses have been affected by demonetisation but can it affect the market so much so as to bring down a company within 2 months? Yes, it makes for good headlines to hold the government responsible when the popular opinion is against it but is it not also sensationalism?

Kundra had written: “Demonetisation, whilst a bold and most needed step, unfortunately, came at a very bad time for our industry and we have been nothing but collateral damage.” The company had in December 2016, temporarily suspended operations after it saw a huge drop in business after demonetisation. But the fact that can also not be forgotten is that the company had not been doing well even before November 8 when the decision was announced. Its vendors had alleged that the company had defaulted its payments since January 2016.

Just a few days back, the Hindustan Times shuttered several editions – Bhopal, Indore, Ranchi, Kolkata, Allahabad, and Varanasi – and closed two bureaus. Demonetisation again was held responsible for the strong step taken by the company. Over 150 employees were rendered jobless but the fact is that it was not just demonetisation which forced the management to take the decision. Such huge losses cannot be accumulated within a month. The decision was part of a long-term plan to shut down some offices. The decision is also in line with the company’s strategy to move towards the digital terrain.

The reason that is said to have been given to the employees was that after November 8, retail sales had gone down as a result of which advertisements also went down. From what it seems, demonetisation was just an excuse for the management to take that decision and shrug off its responsibility.

Several deaths too have been misreported during the demonetisation decision. Picture this: A washerwoman in UP died of shock when she got to know that Rs 1,000 notes were banned; A 55-year-old woman in Telangana committed suicide after she thought her savings worth Rs 54 lakh were rendered worthless; A man in West Bengal murdered his wife because she returned empty handed from the ATM; A man died after falling off from the 2nd floor of a bank in Kerala while filling the deposit slip and died. These cannot be blamed on demonetisation. However unfortunate these were, they were due to misunderstanding or were accidents. Blaming Modi for them is not a logical argument.

How fair is it to blame Modi government for all demonetisation-related deaths?

No one is denying the fact that the economy slowed down due to deonetisation. There was a major cash crunch in the economy. What adds more to the worry was the fact that the services activity showed no signs of a recovery and employment decreased marginally even in December, a month after demonetisation was announced and implemented.

People whose livelihood depends on daily wages were among the ones who most affected by the decision. The ill-executed decision even led to a lot of chaos in the economy. It’s only after two months now that the situation has improved and at least banks are not seeing unending lines and the withdrawal limits from ATMs have also increased.

Companies have suffered losses but to claim that they have been pushed to the dirt due to demonetisation is too far-fetched a study. Holding the government responsible for what has gone wrong is legitimate but blaming them for everything is nothing but making a mockery of the system.