India no longer speaks about the scourge of demonetization. Where now are the outbursts of rage of some politicians who sought to make capital out of the de-legitimization of high face-value currency notes? After the short period of four months, these critics have gone mute and all that remains of the sound and fury are the huge placards in Kolkata with pictures of the chief minister denouncing the ‘note ban’ and the dictatorship of the prime minister. Even the Cambridge-educated economists, led by a person who called demonetization loot and plunder, are to be heard no more on this subject. Nor are the claque of foreign financial and political experts who were eagerly quoted by the Indian critics, who were apparently unaware that those authorities never harboured any affection for our country which they have consistently denigrated, and predicted its imminent collapse.

The welcome silence that has fallen on this issue is not hard to understand. The improved access to cash post-remonetisation, better tax reporting and compliance have generated a positive revenue and fiscal impact for higher public investment. The government calculates a growth upturn of 7.4 per cent in 2017-18. Tax receipts for 2016- 17 of Rs 17.10 lakh crore have exceeded even the revised estimate and are up by 18 per cent with Direct Tax up by 14.2 and Indirect Tax by 22. Merchandise exports are expected to touch $ 275 billion, the best since 2013- 14. Sensex and Nifty indices have reached record heights. In March, Foreign Portfolio Investors placed Rs 31,000 crore into equities. In the same month, manufacturing rose to a 5-month high after a dip in December.

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Four months is all it took to move the economy out of the worst effects of demonetization. The effect was transient and limited mainly to November and December last year, and had dissipated by February. Taking the macro-economic scene first, alll from published sources that are by no means sympathetic to the government at the Centre, the Q-3 2016-17 GDP figures indicate a growth of seven per cent, with demonetization making a marginal dent on growth over Q- 2, despite the cash-intensive nature of consumption and industry in the unorganized sector. There was slowdown in financial, real estate and professional services, but increase in private consumption, fixed investment, electricity, mining and manufacturing. In fact the unorganized sector did fairly well, especially as the rabi crop was healthy. Agriculture, comprising 94 per cent of unorganized sector output, showed a 8 per cent increase. Banks, buoyed by liquidity, reduced their marginal cost lending rate, and spurred investment, while Small and Medium Enterprises opted for a wait-and watch attitude.

After demonetization, against 161 world currencies, the Indian Rupee has gained in strength over 143, including the US dollar, Euro, Swiss Franc, and Japanese Yen, weakened against 17 and on par with one.

Against the expectation that up to Rs 3 lakh crore ~ or 20 per cent of the demonetized currency ~ would not return, as of January New Delhi is resigned to the fact that only Rs 75,000 crore will not return to the banking system. Only Rs 14.5 lakh crore had been deposited, or 93 per cent of the delegitimized money, by that time. But this figure includes fake or counterfeit notes that will take time to identify. Rs 401 crore in defunct notes were seized up to 10 January. Four lakh crore of taxevaded income has been deposited during the amnesty window, and Rs 4,170 crore undisclosed money seized in November and December. Rs 25,000 crore in cash has been deposited in previously dormant accounts, 60 lakh bank accounts have each had more than Rs 2 lakh deposited in cash and Rs 80,000 crore has been repaid in cash against loans taken. Cash deposits totaling Rs 10,700 crore have found their way into various deposits in the North-east.

There has been a crackdown on 300 ‘shell’ companies which exist on paper and are used to launder money and evade taxes, with searches at 100 locations. At least 550 persons had laundered Rs 3900 crore through such companies after the demonetization decision.

As regards, digitization, the commonly used digital systems are credit and debit cards, mobile wallets, mobile banking and unified payments interface (UPI). There is upward movement in all these except debit cards, which were affected due to the initial lack of money in ATMs. Before demonetization, ATM withdrawals accounted for 90 per cent of debit card usage. From November to January UPI increased by 19 times.

A less-cash economy is dependent on mass adoption and focus on the base of the pyramid. A total of 125 lakh persons have adopted the new BHIM app which is backed by Referral Bonus and Cashback schemes to digitize everyday purchases. Aadhaar Pay will be launched shortly for those without debit cards, mobile wallets or mobile phones. Over 1110 million now have Aadhaar cards, and 490 million have bank accounts linked to Aadhar. Further financial inclusion is aimed at, with Aadhaar used for Direct Benefit Transfers resulting in annual savings of Rs 36,144 crore for the government. Steps are envisaged to enhance biometric authentication and to integrate BHIM with Aadhaar and to facilitate greater use of cards despite India having the worst point of sale terminal penetration in the world, at a paltry 693 machines per million users. Increased digital transactions will benefit SME to access formal credit by recording their transaction histories.

A top secret study that showed that Rs 400 crore of fake notes were in circulation and criminals intended to pump Rs 70 crore into the economy each year was the trigger for the move to deal with black money and fake currency. This was one of the major themes of the Prime Minister’s announcement last November. HDFC, ICICI and Axis are the banks with the best record of detecting these fake notes. Gurmeet Kanwal’s book, The New Arthashastra, draws attention to the serious menace to our security of counterfeit currency propagated by militant groups with the sponsorship of Pakistan. In February 2017, the government stated that the smuggling of fake currency had entirely stopped ~ but this is likely to be only a short-term relief. Counterfeit notes have been found primarily in Gujarat ~ the closest sea access for Pakistan.

The core reason for the silence that has happily descended on the chorus of opposition to demonetization is political. It is obvious from post-November polls that demonetization has not diminished Modi’s popularity or the BJP’s growing prospects of nationwide support. Local elections in Mumbai saw their support grow by 264 per cent, and 180 per cent in local elections elsewhere in Maharashtra. In Zilla Parishad polls the rise was 148 per cent. In Odisha, the increase in Zilla Parishad was 825 per cent. The same story was seen in Gujarat’s local polls earlier. The people regard demonetization with all its flaws as being a blow against corruption, bribery, the privileged class and politicians pedaling money power. In Uttar Pradesh and Uttarakhand, the BJP under Modi won an absolute majority. The wave was insufficient to overturn a 10-year incumbency in Punjab, but enough for government -formation in Goa and Manipur.

The UP election was a landmark victory for Modi but left a bitter taste for his opponents, who allege that the western media have been uniformly critical, India’s “international image took a severe beating”, and “Islamophobia as a state policy” makes the world take note in alarm. The UK Financial Times astoundingly stated that Modi’s government is “bereft of any substantive achievement … after three years.” As St Mark’s Gospel says, “Having eyes to see, see you not? And having ears, hear you not?” Indian politicians are known never to express regret, however much they misjudge the public mood. But for a start the huge placards that disfigure the Kolkata landscape and are a testament to folly, need to be removed.

The writer is India's former Foreign Secretary.