The RBI's review of monetary policy on 7 December came as a fitting tribute to the culmination of one month of tumult throughout the country brought about by the sudden demonetisation of Rs 500 and Rs 1000 notes.
Bank notes and most decisions about them fall in the RBI's domain and therefore the central bank faced a lost of flak over the past 30 days for what was essentially a government decision.
The RBI's decision to not cut key interest rates punctured yet another argument that was hailed as one of the many promises of demonetisation, a month ago, that interest rates will be cut and loans will become cheaper.
This is the latest in a series of false impacts that had been projected when the move was announced and have now been falsified beyond doubt.
These included breaking "the grip of corruption and black money" and strengthening the hands of the common man in the fight against corruption, black money and fake currency", quoting from the Prime Minister Narendra Modi's fateful 8 November speech.
"The Rs 500 and Rs 1,000 notes hoarded by anti-national and anti-social elements will become just worthless pieces of paper," he had also said.
The fact that most of the money that was in circulation at that time has been deposited in banks in this one month clearly says that it did not become "worthless pieces of paper", as Modi predicted.
The right questions
It is also widely being interpreted as an indication that none of the money that has been deposited was dirty. There is another school of thought that says that only scrutiny will reveal whether all of this money was accounted for or not.
The government is not very sure what it believes on this count, as it is no longer talking about the subject. The focus of government communication has cleverly shifted from black money to going cashless or a 'less-cash' economy.
As for fake currency, it accounted for only 0.02% of the total currency in circulation. The government is yet to answer the question that does it make sense to do away with 84% of the currency in circulation to remove 0.02% of it.
A month down the line, experts are nearly unanimous on branding the exercise as a failure, as far as the avowed objectives are concerned, and not the best strategy, as far as the incidental benefits being cited are concerned.
According to professor of economics at Jawaharlal Nehru University, Ravi Srivastava, demonetisation has been the complete opposite of a Robin Hood-scheme. Srivastava explained that it has not just led to compression of the income of the poor, a systematic and consistent transfer of income from the poor to the well-off is also taking place.
Srivastava said that the informal sector has been hit the hardest and it employs over 90% of the country's workforce and constitutes 45% of the GDP.
He concluded that the move has already had a damaging impact on people and the economy and that the negative repercussions will continue in the short, medium as well as the long-term.
Nitin Desai, former chief economic adviser, was clear in his opinion that judging by the numbers that have come out so far, black cash hoarders indeed appear to have found a way out and all of the dirty money is quite likely to surface again.
He said that the biggest outcome has been that cash transactions have taken a hit, but these were legitimate as well as illegitimate transactions. What will be of importance now will be to watch how the government follows up after this, i.e. whether tax evaders are apprehended and action is taken against them or not, he added.
Desai also said that when one talks of black economy, funding of political activity very central to it and that is another area where a follow-up action from the government is required.
Count it right
Another former chief economic adviser Ashok Desai said that the best parameter to judge the 'success' of the exercise one month later would be to ask what proportion of the scrapped currency notes did tax evaders of the past hold and could not convert into new notes or bank deposits.
It will also be important to know what was the ratio of those notes to the tax that those evaders evaded, he said.
But, Ashok Desai noted, that neither figure can be known or reliably estimated, and anyone can make his/her own guess. His view was that most of evaded taxes are held in undervalued property, and are quite unaffected by demonetisation.
The RBI is right in saying that the effects of demonetisation are still "unfolding" but it is also being dishonest in hiding the real assessment of the damage that is already visible to independent economists.
The government is at least consistent from day one in its appeal that the move should be assessed after 50 days. However, it does not seem likely that these assessments will turn any rosier by then.