VOX POPULI
by
S Kamat
as
Aam Admi
Issue: 180 Date: 19.12.2016
Contents:
1 1. India Should Go For Presidential Form of Government
2 2. Discount Opinions On Demonetisation From Those Not Affected
3. Modi Must Quit
4. The Rot in India Is Deep, Dark and Extensive
India Should Go For Presidential Form of Government
We have in the last week seen two important personages of our Parliament claim that they were not ‘allowed’ to speak in the House. One was the leader of the present government, Prime Minister Narendra Modi and the other was Rahul Gandhi, Vice President of the Congress party which is the principal Opposition party in the present House. Based on these claims which signal a clear threat to Parliamentary democracy since if these figures claim their being prevented from raising their voice on behalf of the people what of the lesser known MP’s. Thus the status of Parliament which should be the representative of the voice of the people through their elected legislators is clearly in danger. We have also seen in the previous UPA regime and in the present NDA dispensation how Parliament is held at ransom by MP’s who deliberately disrupt proceedings and do not allow the Houses to function. Each party whether they are in government or in the Opposition, blame each other for the paralysis of Parliament in a tit-for-tat manner. The majority of legislators around the country be they MP's or MLA's are not responsible enough and broadminded to work for the people since they are obsessed with feathering their own nests. Considering this background and the fact that the Indian people at large are known to prefer a firm hand on government, is it time for India to move into a Presidential form of government? Given that we have tried out Parliamentary democracy on the colonial British model for the last 70 years and are not sure whether it has worked or is working presently given the experience particularly over the last two decades, one thinks it is time enough to change to a Presidential form of government.
Discount Opinions On Demonetisation From Those Not Affected
There are a few issues related to the comments made by foreign entities on India's recent demonetisation. Some countries commended Narendra Modi on the bold decision but apart from the theoretical moorings of the comments wherein it is believed that demonetisation strikes at the root of the parallel economy (black money in India terms) and corruption these countries mostly from Europe had an inherent interest in keeping Modi occupied at home since otherwise he would be bothering them to give data on Indians who had stashed their black money in these countries. In another context we have had economists like Bhagawati & Co., the first named being the sounding board of sorts for Narendra Modi on economic matters with one of his protégés heading the Niti Aayog, who have been singing the paens of demonetisation and that the 'short term pain will lead to long term gain'. These people live abroad and have no idea of the 'pain' that the common people in this country are suffering because of the cash shortage and also have no stake in the 'gain', if at all, that will accrue. We should therefore take their comments with a large pinch of salt. Such eminent people one would presume would be careful in nurturing their professional reputation since by taking sides on parochial basis or on terms of 'you rub my back, I will rub yours' does not serve them any purpose. What these people fail to understand is that the demonetisation was desirable but the way it has been put through by Narendra Modi's government leaves a lot to be desired.
Modi Must Quit
Prime Minister Narendra Modi should resign not necessarily just for the demonetisation fiasco that he has inflicted on this country but also because he seems to be a compulsive liar apart from being a person unfit for the august office of the Prime Minister of India. This is being stated because of his comments at a Gujarat rally last week that he is not being 'allowed' to speak in Parliament. The first thing that we need to look at in this context is Modi's attendance in Parliament. You rarely find him present in either the Rajya Sabha or the Lok Sabha to which latter body he has been elected, intervening in debates relating to crucial and/or controversial matters that are before the House. The same pattern of absenteism from the Legislature defined his tenure as Chief Minister of Gujarat. The second thing is that in Parliamentary democracy the Prime Minister is given overarching precedence if he intends to speak in the House. This is a tradition established by custom and also by the respect that members of the House have towards the Prime Minister. Of the latter one does not know how much Modi commands from the Opposition benches but one must say that he has no dearth of sycophants in the Treasury benches. In fact on the issue of demonetisation as soon as Parliament convened within a week of the D-Day of 8th Nov 2016 he could have opened the winter session with a statement in both Houses. But unfortunately by that time the pictures of the queues in front of banks must have discouraged him for fear of being bombarded in Parliament. Thus Modi ran scared and retreated into his hole. This speaks of a personality that is afraid to face his peers and take criticism. This denial stems from a lack of proper education, a proper and rounded family background that has adequate emotional safety nets and the willingness to accept responsibility. In such situations these individuals tend to exhibit bravado which is evident from Modi's comments of a 56 ins. chest and the tendency to make immature off-the-cuff statements. One of these recently was Modi's statement that he shares a good relationship with Trump upon Donald Trump winning the US Presidential elections and that he 'knows him well'. Now the world has doubts whether Trump knows himself well given his penchant to make outrageous statements and subsequent retractions for Modi to say that he 'knows' Trump well! One of the delusions that people like Modi suffer from is that they tend to put themselves above the position that they occupy, in this case that of the Prime Minister of India . Most of the relationships that Modi shares with world leaders is because of his being the Prime Minister of India and not of him as an individual. The demonetisation fiasco that was launched by him on the country is part of the same bravado and is representative of the fact that he acts without thinking about the consequences. Another way of putting it is to remind him of the old adage - Act in haste and repent in leisure. Modi also needs to realise that his scale of operations has now expanded beyond Gujarat and what could work for a State may not work for the whole of India and the repercussions are on a much larger scale also. This latter fact he must have come to realise after the demonetisation fiasco though publicly he may not be willing to accept it. We can give Modi at least that much grace to him. There is also a certain amount of narcissism and a touch of megalomania in Modi's character as we have all seen. Thus being afraid of being pulled up for performance what with a stuttering economy, foreign policy initiatives with all our neighbours going wrong especially Pakistan and being afraid of being asked about the bringing back of black money, Modi jumped into the demonetisation measure. This was done essentially to pre-empt criticism but in the unfortunate implementation of the measure it has ended into a fiasco. Thus given the present state of affairs it is best that Narendra Modi resigns or as reported a few months ago, there needs to be a 'palace coup' engineered internally by the BJP or initiated by the Sangh Parivar to remove him from the helm of affairs.
The Rot in India Is Deep, Dark and Extensive
The rot in India is deep, dark and extensive. This has been brought to the fore again post-demonetisation. Immediately after PM Narendra Modi's announcement that the Rs. 500 and Rs. 1000 were no longer legal tender, the whole of India got into the act starting from the night of 8th Nov itself to safeguard their money, much of it black and maybe some white. Phone lines across the country were jammed that night with people jabbering away to find out the best way out of the situation. Jewellery shops were ambushed across the country with people desperate to convert their demonetised notes into gold, a safer hedge against government intervention apart from being a good investment option.
Vultures descended immediately thereafter in the form of wheeler dealers, commission agents and influence peddlers on those possessing large amounts of the demonetised notes promising conversion to the new and legal currency at varying rates of commission ranging from 10 - 35%. In this process a large number of gullible possessors of the demonetised notes got cheated finding themselves in the predicament of not being able to seek the help of the police to recover their 'invalid' money.
Banks and post offices were swamped post - 10th Nov when they reopened after the bank closure on 9th Nov with people seeking urgent conversion of their demonetised notes to the abysmal low limit of Rs. 4000. The reason behind the impossibly meagre amount allowed conversion in the initial instance was a supply-side constraint of the new notes and logistics considerations of delivery of notes across the banking network spread across the country. With the crowds at the banks eager to exchange money, it was but natural to have confusion on the documentation required from the depositors which many black money hoarders took advantage of by having 'currency mules' do the rounds of the banks and post offices depositing bundles of old notes multiple times at the cost of honest, regular citizens who were wanting to exchange money for their day to day cash needs. With the rush at the banks and post offices, the staff was hard-pressed and one must compliment the staff at these establishments for their patience and tolerance in the handling of the massive rush of people. However, considering the infrastructure available at these establishments, one will have serious doubts on the integrity of the records and the ability of our investigating agencies to proceed on any meaningful investigation based on this data.
Even otherwise the ability of the investigating agencies to process such a large volume of cases to their logical conclusion is debatable. Even some bank, both PSB and private, post office employees and now even RBI personnel have been found wanting in integrity and in collusion with black money holders seeking to feather their nests in this once in a lifetime opportunity. Many have been arrested and find themselves cooling their heels in jail. In the course of time you will find that IT personnel will also be drawn to the temptation of making a quick buck from settlement of cases 'quickly'. Bank employees and unions have already expressed concern on the additional workload caused by the demonetisation exercise to which has been added the complaints from the IT Department employees about the lack of manpower to pursue the impending tsunami of cases. Thus every section involved and/or impacted in the demonetisation exercise is looking to take advantage of the situation and shore up their own interests. This situation should therefore not end up with shifting the goalposts from the objective of clearing black money to 'cleaning up' the internal system of government. In line with this RBI has announced that a vigilance team will visit each and every bank branch in the country to check the records of the accounting of demonetised notes! Exemplary aims, but is it practical? It will be like Narendra Modi asking all BJP MP's & MLA's to submit their bank statements from Nov 8th to Amit Shah. Unfortunately there is an eerie silence from Amit Shah on whether he has received any such statements!
Looking for reasons why lately so much new currency is being seized in raids particularly of the Rs. 2000 denomination is maybe because the Aam Admi in any case does not want the note in normal circumstances considering he finds it difficult to get change which some of our rogue bankers have sensed and have thus deliberately kept the ATM's bare of currency and have been diverting these notes to the black money hoarders where at least they, the bankers that is, are being covered for their pains. Are also the bare ATM’s because of the private contractors like Brinks & CMS and others not being given the cash or their inability to meet the stringent demands of the situation? Or is it because the banks outsourced this work to private operators rather than handling it themselves or in a centralized manner through the IBA since then the ATM’s of the banks could have been fed with some currency which would also ease the crush at the bank counters?
RBI the apex monetary authority in the country is continuing to not accept the responsibility of ensuring adequate amount of currency to replace the demonetised notes. In the first couple of weeks after 8th Nov the RBI was nowhere in the picture with the Finance Ministry officials calling the shots on the procedures post-demonetisation. It was only later that the RBI Governor, Urjit Patel surfaced with the lame statement that he supported the demonetisation. Thereafter we find the RBI personnel adopting a patriarchal approach in handling the cash crisis. Their spokesmen in true pedagogic style recount and reel out the numbers in billions of the various notes that they have put out through the banking system little realising that that effort is just not enough since the attempt and objective should be to ease and/or eliminate the cash shortage. This approach of the RBI indicates the way of their functioning since as long as the going is good and top-down instructions are the order of the day, they are kings of their domain. But the moment something goes wrong as in the present demonetisation scenario and the pitch becomes difficult to bat on, they find themselves completely out of their depth and fall flat on their face.
The government is indirectly facilitating this crazy rush at the banks/ATM’s by thrashing around in the manner of a drowning man clutching at straws with far-fetched alternate options like promoting cashless transactions to counter the cash shortage as the next 'great idea' to catch up with the developed world! Little do the authorities realise that for going cashless it is important to have a minimum level of education across the population to be able to understand the principle and the mechanics of the transactions. There is also a need to have proper and reliable coverage of the Net and the mobile networks across the country to have transactions go through with integrity and without interruptions. Because the moment a transaction does not go through particularly in the rural areas and among the urban poor, the bewilderment of the users goes up manifold and the acceptance of the process suffers. There can be no reversal of wrong transactions and therefore the user stands to lose the transacted amount is something that not all persons could afford. Already with the number of POS terminals on the increase, we have had server breakdowns jamming the smooth flow of transactions indicating that unless systems are not robust enough to handle large traffic you will only have more intention than any action to put through transactions. With cashless transactions not going through, the trade outlets would insist on their preferred mode of payment – cash.
As indicated earlier there are many to take advantage of the gullible and ill-informed public and swindle them. Like we have already in Goa just last week card skimmers being used under the guise of POS terminals at some trade outlets and claiming that the transaction not gone through, capturing the card details and presenting thereafter a regular POS terminal to complete the transaction. The skimmed card details were later used to prepare duplicate cards to draw money from the customer accounts. Here there was collusion between the trade outlets and the card skimmers. Who will be responsible for such malpractices? Does the account holder get reimbursed by the bank or does he have to fight the battle to get the money back himself? What happens if the account holder is unable to bear the loss – temporary or otherwise? Such problems coming to the rural areas and the urban poor could be very critical and affect common people severely. Thus in summary the government is tailoring their cashless programs for the urban elite and the upwardly mobile segments of the population at the cost of those that are less fortunate. Such people, actually the larger part of the population, will find themselves slowly excluded from the process of monetary transactions further accentuating the divide between urban India and the rural Bharat. A study commissioned by ASSOCHAM and done by Ernst & Young positions that mobile and card fraud is going to jump 65% in the next year considering the rising trend seen in the last 3 years. And this study was done prior to the demonetisation exercise which if you factor in the frauds could go up exponentially, potentially putting every other cashless transaction at risk.
There is also the issue of cost of the cashless transactions and banks have been asked by government to waive the cost of debit card swiping which the banks and even RBI are resisting saying the minimum cost has to be charged to trade outlets. There will also be then the preference of trade outlets to take more debit cards than credit cards since the former is lower cost for them. These knee jerk reactions in the rush to promote cashless transactions for essentially a gaffe of the government in creating an artificial shortage of cash is throwing up needless choices and alternatives. There is also no time being given for the usage of different cashless products to evolve in the normal course and get public acceptance. Adding to all this in the manner of a commercial establishment the government is said to be coming up with lucky draws for using cashless transactions which an amused public will watch from the sidelines akin to seeing a headless chicken with its head cut running helter-skelter in its last death throes. In these circumstances the user bewildered by choice will prefer to retreat into his shell and allow the prevailing dust on cashless operations to settle down before he decides on his option. The cost of cashless operations is around 1-3% among the various options which the trade outlets have to pay the operators like Paytm, e-wallets, payment gateways, banks etc. This amount will as is common in India will be recovered from the customers. Thus moving to cashless operations involves a transfer of resources from the common man to mainly the private operators running these operations. Hence some economists have opined that in this method and in the worst case scenarios 1-3% of the GDP will be transferred to a limited number of private operators making them richer. In this context one needs to note that the owner of Paytm just last week sold 1% of his share holding in the Co. for Rs. 325 crores! Was this boost in share value because of the push that Narendra Modi gave Paytm by appearing in their full page ads in national newspapers in the first few days after 8th Nov? Thus like they say for some it is chandi hi chandi while for others it is sar pe lathi. Some come with their Bhagya made for them by benefactors while others have to suffer their Bhagya alone.
In conclusion one must say that any measure has to be thought out in great detail and executed with precision which unfortunately has not been the hallmark of Narendra Modi's demonetisation measure.
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