On the evening
of 8th November, 2016 PM Sri Narendra Modi announced the
demonetization of Rs 500 and 1000 from the midnight. Some called surgical
strike on black money, some called bold move, some called good for the economy,
and some called pro-poor and anti-rich move. However, it might have been
confusing, none of their views were substantiated with facts that how come it
will hit black money hoarders, how it will help the people, and how it will
resurrect economy. It was all speculation belying the ground reality in open
and the misery of the people to begin. Nobody is sure what it means and what it
is aimed at. All are throwing their hats speaking what they want to speak.
These Rs. 1000 and 500 are no more a valid tender in India. |
Amidst all the
guess, sermons, claims, chest beating, criticism, and propaganda, some
bewildering factual trends emerging out which might have been off guard over
looked by the govt or they might have considered it as part of the policy.
Nothing is clear as yet – its all speculation and to everybody’s guess that we
might have to live for sometime in speculation and guess.
One of my
wife’s friend and relatives were on Vaishnab Debi Temple visits and while they
were coming back on 8th evening the demonetization took effect and
since then they all had to preserve their smaller currency and rationed for
food till they survived the tour and arrived home safely.
A man in
Mumbai goes to hospital to admit his wife in labour pain and the hospital
refused admission because he had only Rs. 500 and 1000 old notes. He came back
and left his wife at home and went to exchange the money. When he comes back,
his wife had delivered and the baby was dead.
A lady sold
her landed property worth Rs. 60, 00,000 and was supposed to buy another
property the next day committed suicide because the currency what she had was
no more valid.
All across the
country, the ATMs of all the banks became dry with Rs. 100 notes within an hour
and became non-functional from midnight of 8th November. From 9th
morning, the queues of the people for exchange, deposit and withdrawal of their
own money has been the story of desperation, uncertainty, wait, and mental
agony. The queues of the people continue and will continue until they feel
their money is safe and they have enough in hand for their expenses.
In the due
course, some people waiting in the queue suffered heart attack and left to heavenly
abode. Many dead bodies waited for cremation because crematorium refused
accepting old 500 and 1000 notes. Several unwanted deaths committed due to non
availability of money. Daily labourers and office goers spent time in queues to
collect money for their expenses. No earnings for the day for them. The
miseries have not ended yet.
Medias were
biased, unbiased, and confused lot and calling people to explain the situation.
As intimidated and perturbed in shaky situation, hardly any of the people threw
light on the negative part of the move.
But the visuals were enough to understand the immediate impact it has
created on the common man. And the stories on the social media said the truth.
When this was the scenario in cities and township, a visualization of the rural
India could be the truth of anybody’s speculation. A bewildered disbelief has appeared in front
of people that a harsh decision could be implemented for the business of
government of India. Is government for business Or welfare of the people?
However, the
narratives of the government remained defiant and attacking on the opposition.
The mockery and pleading continues to be government’s tactics to manage the
poor planning situation of the chaos their decision has created. The move was rated for the good for the
future of the country while the present have been royally ignored and
mismanaged. As usual, congress is denounced and chest beating is done for their
own bravery. However, their bravery has layers of hidden truth that they may
not be able to answer.
While the
debate is on – several questions crosses one’s mind and the argument and
counter arguments are both in the public domain for consumption. Its our own
understanding (that is so complex), intelligence (more of emotional than
logical), and belief (rather blind and ill) that will work as pain bam for the
time being.
As government
claims, no one had idea about this sudden move of the government. Not even the
ministers and opposition leaders – anyone. Whereas on twitter, the BJP chief
has tweeted the new
Rs 2000 notes on 5th of Nov 2016. Evidently
entire political circle knew about this move that is why so far none of the
politicians, Industrialists and so called black money hoarders came to bank
rather common man haplessly standing days together to exchange and withdraw
their money. That too they can not withdraw whatever they want. There is no enough cash. Possibly all Rs.100 notes were taken out by
those who are sitting quite in their official bungalows and the mansions. There
is no urgency for them because their work is already done and they do not need
to panic. Ironically, most of the people got Rs.50, 20 or 10 from the bank. Rs
100 ran out in no time. I got 4 bundles
of Rs.10 notes for the first time in my life from the bank. Question is where
are the Rs.100 notes gone?
More news from
the bankers suggests that they had ideas of Rs. 2000 coming in circulation but
the time was not announced. Around 15 days ago the calibration and programming
for vending Rs.2000 notes were done in leading banks ATM. However, still it was
a short time to complete the job in all ATMs of all the banks. That is why few
ATMs could dispense this currency in couple of days time.
I came across
a labouerer who got Rs.2000 in exchange from the bank yet he could not buy his food for two days
because no one was ready to give him change until he buys Rs 1600 worth food.
At last, a good Samaritan offered him a free meal for the day.
India is a
cash rich economy and we do not transact until necessary through the bank. Bank
is only used to keep extra cash which is not in use. The farmers, the small
traders, and the small venders all depend on the cash transactions. It’s a big hit for them and they might be the
bigger losers with the move. In fact, they are the largest tax payers group too.
Farmers have been committing suicide for non-payment of their loans and this
misery will suck them dry.
Imaging a
cashless economy without ample arrangements is a utopian dream. But our FM is
more pragmatic and he wants India to beat even US economy.
The argument
that runs positively is curbing counterfeit notes. Counterfeit notes have
always been in circulation and no sooner the new notes will be in the market it
will have counterfeits too may be little later. However, largely the
counterfeit notes have been denied by traders, business owners and banks
because of the new checks and mechanism of identifying the fake ones. Hence, how far this argument holds good is
anybody’s guess.
Again, how
good will it be to reintroduce Rs.500 back and a higher denomination of Rs.2000
in the market. Later on Rs.1000 may come back too. Will there not be any accumulation of black
money? Will it not increase more
corruption?
If you listen to the experts on black money front, some economists
say the move will have a limited impact as people will simply begin to
accumulate black money in the new currency as soon as that becomes available.
But the government hopes this will bring cash worth billions of dollars in unaccounted wealth back into the economy. The two notes accounted for more than four fifths of the currency in circulation. However, the demonetization economics is complex and the collateral damage is likely to far outstrip the benefits.
Prof Basu, who was chief economic adviser to the previous Congress government, said – “This "demonetization" just witnessed in India is at best, a one-time flushing out of the system and the return of black money is likely if not inevitable.” Many economists also say the costs of such a one-time "flush" will be huge.
PM said –“Honest and poor people are happily sleeping and rich and black money hoarded looking for the sleeping pill.” This rhetoric is brilliant to create a divide between poor and the people which have got little more money and might or might not fall into rich category, but certainly may not fall in super rich category. This is real psychotic pill and negative move to make poor be his voter because he has attacked the rich with demonetization. But the super rich and the political class remains his friend. This is the tactics Indira Gandhi had adopted and so she ruled for so long. He is also aiming to position himself for long innings.
But the government hopes this will bring cash worth billions of dollars in unaccounted wealth back into the economy. The two notes accounted for more than four fifths of the currency in circulation. However, the demonetization economics is complex and the collateral damage is likely to far outstrip the benefits.
Prof Basu, who was chief economic adviser to the previous Congress government, said – “This "demonetization" just witnessed in India is at best, a one-time flushing out of the system and the return of black money is likely if not inevitable.” Many economists also say the costs of such a one-time "flush" will be huge.
PM said –“Honest and poor people are happily sleeping and rich and black money hoarded looking for the sleeping pill.” This rhetoric is brilliant to create a divide between poor and the people which have got little more money and might or might not fall into rich category, but certainly may not fall in super rich category. This is real psychotic pill and negative move to make poor be his voter because he has attacked the rich with demonetization. But the super rich and the political class remains his friend. This is the tactics Indira Gandhi had adopted and so she ruled for so long. He is also aiming to position himself for long innings.
What looks
more obvious with the move of surprising demonetization of Rs 500 and 100 is
that BJP has finally decided to move away from its core vote bank which kept
them floated for nearly 6 decades. The traders, business owners, professionals
and working class are the ones who have witnessed stripped in open. The poor
and marginalized people have been suffers, while the rich and one who are in power
corridors are taken care. The 2014 parliament election in reality was also the
upsurge of this middle class (upper and lower) young, old, committed and
educated voters that ascertained Modi to be PM of India. The vote of the lower
class was bought by the false hope and promises that anyways he will continue
doing.
The current
demonetization is clearly a move towards squeezing more tax from the middle
class. It’s the class who pays tax and
getting forced to pay more tax in future too. The faulty taxation system of
India is screwing middle class to its maximum.
Further decoding
the fact reveals BJP has positioned itself as cash rich political party with
cash rich funding business houses what Congress earlier used to be and they
consider poor and marginalized to be their vote banks that turn in large
numbers to cast vote irrespective of any situation and no apprehension
whatsoever. This shows one class who will fund the election and another who
will vote for them. Congress sustained on this principle for 7 decades. So, PM
and BJP is following congress to be in power and they used middle class as steps
to climb the power stairs. And now, they
do not need them any more – used and dumped – a surgical strike to outcast
middle class.