Calling Indian Prime Minister Narendra Modi's decision to demonetise Rs. 500 and Rs. 1000 currency notes as a 'bold move' and a 'gamble', the Chinese media said Saturday that the former has created a precedent with this move irrespective of the fact that the whole process succeeds or fails.
"The Western-style democratic system of India allows little room for such bold moves. However, he is really carrying it out, and will create a precedent no matter he succeeds or fails," said an editorial in the Global Times.
"Modi's move is very bold. We cannot imagine what would happen in China if the country bans its 50- and 100-yuan notes. To prevent a leak of information jeopardizing the implementation of the demonetization reform, the rollout of the plan had to be kept confidential. Modi is in a dilemma as the reform aims to render the black money useless but the process goes against the governance principle of winning support of the public before initiating a new policy," read the editorial.
The article pointed out that demonetisation can crack down on corruption and shadow economy but it is obviously unable to solve the deeper social and political issues that help breed the aforementioned problems.
As far as the root causes of corruption exist, the problems will always resurface. In other words, the Modi government wishes to turn a long and arduous reform into a one-off deal, it said.
"Demonetization is a gamble for Modi. He bet on both the execution ability of the government and the tolerance level of the Indian society, hoping that the benefits of this reform can outrun the negative social impacts and low morale," it said
The editorial said that even though Modi's demonetisation move came with good intention but whether it can succeed depends on the efficiency of the system and the cooperation of the entire society as pthe eople are growing pessimistic about his government's ability to control the process.
The editorial also said that China will draw lessons by observing India's reforms, which in turn would help the country understand its own reforms.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)