Stung by a biting piece in the prestigious UK-based Economist, dated December 3, the Reserve bank of India (RBI) under prime minister Narendra Modi favourite, Urijit Patel played the favourite dictator’s hand: simply kept the senior correspondent out of its daily briefings.
Stanley Pignal, the magazine’s correspondent in the capital took to twitter to express his sense of outrage, even calling this move as a farce on the government’s ‘claim of transparency.’
Pignal had in a biting piece in the prestigious international magazine, been critical of not just the de-monetization policy but the RBI governor not speaking to the media. On December 3, 2016, the Economist wrte:
The dire consequences of India’s demonetisation initiative
Withdrawing 86% by value of the cash in circulation in India was a bad idea, badly executed
SUPPOSE that one day the government of a large and fast-growing economy became convinced that its highest priority was to purge the country of black-economy millionaires hoarding piles of illicit cash. Seeking popular approval, it sent the printing presses into overdrive, hoping to inflate away the value of these secret piles of wealth. It worked: rising prices struck a blow against the undeserving rich, and by egging on others to deposit their money in banks (where it could at least earn interest), the shadow economy shrank. The government could plough the newly created money into tax breaks and public-works schemes.
Critics, rightly, would stand aghast. Inflation would affect everyone who held cash, law-abiding or not. Much of the wealth of those enriched by the black economy would be insulated, because lots of their lucre is held not in cash but in property, gold or jewellery. Such heavy-handed measures could undermine the credibility of important government institutions. Fear that they might be used again in future could weaken confidence in the currency as a store of value—paving the way for some broader institutional failure, like hyperinflation. Long-run trust in the judgment of the state might be threatened.
The rest of the sharp bit of journalism may be read here