Demonetisation 2.0

February 1, 2017

In his February 1st, 2017 article, Professor Varshney reflects on his recent travel to India and makes the argument that economics does not drive demonetization; politics do. Varshney argues that the three most plausible hypotheses are:

1. The grave importance of UP elections, producing a desire to affect disproportionately the election finance of the main political rivals in UP
2. The need to re-fashion Mr Modi's grand political narrative, as swachch bharat (clean up India), achche din (good days) campaigns are faltering.  Attacking corruption could in principle be a new defining narrative
3. The need to reduce BJP's dependence on the RSS, which is organizationally fueled by religious and cultural themes, not by economic policy.  The BJP-RSS links can't be broken, but if the RSS overwhelms the BJP, it can hurt electorally. 

Read the full article at The Indian Express