Demonetisation can have substantial benefits that are not visible in the short run The problem with the somewhat fuzzy thing called reform is that while it pays off in the long term, its short term benefits are less visible. In fact, there could be significant costs. Economists and the media routinely criticise governments for lacking far-sightedness and attribute this myopia to the compulsion to eke out quick political gains. Decisions are routinely described and dismissed as political since they avoid short term costs and give the future short shrift.Thus it is somewhat ironic that the same critics have given demonetisation, undoubtedly a 'reform' in the textbook sense of the word, just 12 months to prove its mettle. Its first anniversary has seen a raft of opinion of how quite definitively it has failed to do any trick. In fact, some have been less patient.Quarterly capitalism, a phrase coined by Hillary Clinton to describe how fund managers are gauged, took on a new meaning altogether when DeMo bashers pounced on the April-June 2017 quarter’s dismal GDP growth to wag their fingers and accuse note-bandi of economic homicide. To use a somewhat distasteful analogy this was a bit like how the police behaved in a couple of the recent headline-grabbing murder cases ­ get a quick conviction on the most easily available evidence, never mind the 'little grey cells, mon ami'. This is not to say that DeMo did not have its problems. It certainly could have been implemented much better, particularly the process of refuelling the banking system. Communication between government and RBI on the one hand and the banks and general public on the other was poor to put it mildly and this led to immense confusion and uncertainty. There is also no doubt about the fact that businesses and markets that operated largely on cash (mostly in small and medium sector) were hit and this appears (we do not have entirely reliable data on this) to have led to significant job losses. What are the benefits? This is where the critics have a field day since there are relatively few hard numbers to build a case for DeMo's defence. This, to belabour my point, is inevitable since one has to be much more patient for its payoff to manifest. There are some 'tasters'. Tax return filings have gone up by around 17% this October over last year with individual filings rising the most. 35,000 companies were forced to channel Rs 17,000 crore through the banking system as a result of the de-legalisation of notes, revealing their identities to the tax-man in the process. A similar story holds for digitalisation. It, predictably, picked up sharply after DeMo and has declined since though it is still substantially higher than October 2016. However the key change is that DeMo has strengthened the digital payments backbone permanently . To take an example, data from the National Payments Corporation of India shows that point of sale terminals have doubled to 3 million since demonetisation.