let us go back for a short while to fifties. a decision was taken to liquidate zamindars and jagirdars, appropriate their lands and distribute it to the landless. the constituion came inbetween but it was amended to read that no court will question the compensation to be paid. overnight the land owners lost their land with small amount of cash being paid as compensation.
there were many who urged that large farms are more conducive to productivity. partitioning out the land will make economy suffer. how much was the land which was appropriated. statistics will show it was pittance compared to what the government expected. some zamindars, to bypass the laws, dispossessed the tenants. they did suffer but the overall effect was positive. unfortunately except in west bengal, the authorities were not enthusiastic about the measures and land reforms were tardy. even so some positive effect was there.
it will also be recalled that in the name of industrial progress, a lot of land was taken away from the poor farmers. see the vast land with bhilai steel plant, appropriated from farmers in which three townships, not connected with steel plant, have come up. see the bhel at bhopal. the vast open areas which were once fields of the poor farmers. new townships have come up in acquired lands.
did the economy suffer as was predicted. it did not. new landowners were as vigilant as ever and we had the green revolution. by sixties the benefits were there for all to see but it took time.
compare it with the present situation. it is claimed by many economists that economy will suffer. only a tiny amount of cash held in black will come out. there are complaints by many that it is 'our' money and why does government stop us from getting it. they forget, or like to forget, that money is not being appropriated. only its payment is delayed. those who chasm at inability to withdraw more than 24000 per week should clarify how often they have withdrawn more than this amount in the past. transfer from one account to another is still not banned whatever the amount.
there are others who say that poor will suffer. maybe in the short run because those who have the money will not part with it, not being sure when they will get more. to that extent economy will slow down. purchase of luxury goods will be delayed. car sales have dropped, though a cheque can still cover the amount to be paid.
but the net effect will be that people will be reluctant to go in for ostentatious display of wealth. (you saw the criticism of janardan reddy and gadkari. many more will follow). that it is not likely to be one time measure, has already been stated by the prime minister. other measures will follow. he has shown his ability to do this and people now know that he means business. voluntary disclosure scheme has been there six times but with indifferent results. this time also it was taken to be a similar exercise but they are now disillusioned. generation of black money (and some call it black wealth) will definitely come down which will mean more money in circulation. this will lead to better job market. there may be some delay but a revolution may be on its way. take it in conjunction with other schemes like make in india or skill india. it is a multi prong move. it is likely to succeed.
(before you come up with that jibe that it is written by a bhakt - making it as if it is a despicable term - let me acknowledge that it is the truth).