In Depth

How Modi kept the currency ban confidential

Varsha Roysam
19th Nov 2016
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Ever since PM Narendra Modi’s announcement of the currency ban, there has been much speculation on how such a hefty operation was executed in secrecy. Who knew about it? How did Modi plan it? How did it not get leaked? These questions are on all our minds. There has been considerable talk since the announcement, so we have pieced together for you, the story of what happened behind the scenes.

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Image : shutterstock

People in the loop

Modi began planning for this tidal wave about 10 months ago. According the report released by ET Now, the only people who knew were Raghuram Rajan, the former RBI Governor, and his deputy, R Gandhi. The current RBI Governor, Urjit Patel, became aware of the plan only after he succeeded Rajan as the Governor on the September 6. Finance Minister Arun Jaitley was roped in, and there is speculation that Modi even consulted he Secretary of Economic affairs, Shaktikanta Das, and the Secretary of Investments and Currency, Dr Saurabh Garg.

After several meetings and meticulous planning, the task of printing the notes began two months later, around March. Of course, a lot of hands were needed to pull off such a big operation. Many officials who were brought into the demonetisation plan were given only limited information so as to keep the matter locked in with higher authorities.

Planning

The timing of the demonetisation and the release of the new currency were of utmost importance as a lot of factors, including the economy, were dependent on it. The Government had to ensure that the move was made after the festivities and before the next parliament session. This meant that they didn’t have a large window of opportunity. The move was thus scheduled for November as it seemed most ideal, considering the situation. Modi also had to foresee and plan for many necessities before-hand to make sure that the citizens were as prepared as they could be to take the blow. Schemes like Pradhan Mantri Jan Dhan Yojana and tax disclosure schemes were the foundations that were laid prior to the move.

How the bomb was dropped

On November 8, at 8 PM, Modi addressed the public regarding the implementation of the currency ban. There were still many chances for a leak prior to the announcement, so appropriate measures were taken to evade it. Modi called for a cabinet meeting at 6:30 PM under the pretext of an official agenda where he disclosed the demonetisation matter to cabinet members who, until then, had caught no drift of it. Certain clearances had to be obtained from the law ministry and the RBI board in order to divulge such a high-security matter to the public, which Modi acquired before the cabinet meeting.

With the matter now known to all relevant authorities, Modi stepped ahead to address the country. While he was giving his speech, cabinet members and law ministry officials were asked to remain in the room until its completion. They were also asked not to bring their mobile phones to the meeting, in order to prevent chances of a leak. It was only the same morning that, at the headquarters of the RBI, currency division heads of all banks were given a double-locked currency chest with strict orders to not open it until authorised. They were told that these contained the new Rs 2000 notes, and it was only after Modi’s speech that the scrapping of Rs 500 came to light.

Modi’s currency ban, regardless of the impact it has on parallel economy, will find a place in history simply because of the nature of this operation. Meticulously planned and timely executed, it will become an exemplar of cloak-and-dagger operations of the future.

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