That is, the offshore money is beginning to move from tax evasion to tax avoidance which is indeed an advance in people obeying the law.
One way of thinking about all of the above is that I’m saying that demonetization is the side show, the public play if you like, while the important things about black money are going on elsewhere. And that is one way to read it if you wish. However, I regard it the other way around. I think it’s much more important that everyone thinks the game is roughly fair than I do worry about a few scofflaws not paying taxes. Thus it might well be the benami laws, or the Swiss banks, which are more important in raising tax revenues. But to me it is the creation of the confidence which leads to that chai wallah investing in the chapati stand which is what will grow the economy and thus the demonetization, precisely as that piece of public theatre, which is the most important part of the entire campaign.
It’s most obviously not perfect, demonetization, and there’s no way at all that sufficient notes will be ready by tomorrow (the Indian bank note printing industry just isn’t large enough). But correctly viewed it’s a vital part of India’s development path.”
I stand by all of that and will until either someone or the facts prove me wrong. The major value of demonetisation was that institutional one of convincing the average wallah in the street that Modi, someone at least, was going to go after the cheating bastards.