VOX POPULI
by
S Kamat
as
Aam Admi
Issue: 182 Date: 02.01.2017
Contents:
1. 1. Modi & His Demonetisation Ways: A Possible Alternate Method
2. 2. Modi Should Change Tack Aim At Politicians and Government Employees
3. 3. Modi Should Come Clean On Gujarat Corruption Charge
Modi & His Demonetisation Ways: A Possible Alternate Method
In the context of the demonetisation exercise launched by Narendra Modi from Nov 8th 2016, he has been asking the people if they accept demonetisation. There are no two things about it because to fight black money and corruption demonetisation is an effective measure and the people will accept the premise. In fact Modi's addresses to the public are nothing short of rhetorical questions which from the pulpit that he is speaking from, he obviously cannot get any answers and his speeches tend to be of the rabble rousing kind. The comment that you can make in this context is that Modi cannot be in electioneering mode when he has to handle matters of governance. Modi also questions the people on matters where they have little or not so complete understanding and then claims that the public are with him be it on demonetization or fighting black money. Even while touching upon the number of circulars put out by RBI on the demonetisation issue, he talks of sensitive government while the other side of the coin is a government which does not know what it is doing.
In reality, the question that Modi should have asked the people is whether the demonetisation measure
was implemented properly and whether the people are happy about it? Now that is an embarrassing question, is it not Mr Modi? There are a further number of simple questions which the people have on which Mr Modi should give the answers, like:
1. On Nov 8th 2016, how many new Rs. 500 notes were available with the RBI for distribution?
2. How much currency did the BJP party deposit in banks 30 days prior to Nov 8th 2016? Give a day-wise schedule of deposits.
3. Why have the BJP MP's & MLA's not submitted their bank statements for the period from Nov 8th 2016 till date to Amit Shah?
4. Who is the mole in Modi’s inner circle working for the black money syndicate who has sabotaged his demonetisation exercise? Reasons for the need of this clarification is that this person must have suggested the multiple id's for exchanging the demonetised notes and pushed for the demonetisation with only the new notes of Rs. 2000 and practically no Rs. 500 notes guaranteeing confusion and public uproar that has lasted close to two months now with cash drawals from banks being limited for which there does not seem any end in sight in the near future. By this measure the demonetization was kept that much ajar so that they could escape with little damage. This matter could be deliberate at the party level by the BJP whose upper echelons had full awareness of and for which the party would have been compensated since the State elections were imminent. Or the mole would have feathered his nest so that a thousand generations of his would not have to worry for their future.
Modi has been saying that he is not afraid to tackle tough issues. That's fine but Modi should he not set an example of practising what he preaches. Is he personally willing to face the consequences of his decisions? We are sure that Modi had some of the demonetised notes. Did he go and stand in line to exchange the notes like any other common citizen? To get the feel of the situation did he go and stand in front of an ATM to find that the cash had run out when he had been in the line for about two hours. That would have been the real way to show that Modi knows what the common man has been going through during this demonetisation exercise. It is easy to sit in air conditioned offices and claim that one knows what the man on the street feels or faces but it is yet another thing to be out there on the street with the common man. The problem is that we want to emulate the Western way of life and their leaders but still want to retain the Indian way of using the trappings of office to avoid the compliance to procedures that are required to be done by common people. Keep Modi aside, no BJP MP or MLA was seen in any queue across the country exchanging money or drawing cash from ATM’s though they made many newspaper headlines with many BJP leaders caught with large stashes of demonetized notes.
The answers to the above questions are from what is apparent from newspaper reports and the RTI’s filed with RBI is as follows:
1. On Nov 8th when the demonetisation of the old Rs. 500 & Rs. 1000 notes was announced, apart from the sample notes that Shaktikanta Das waved during the press conference immediately after Modi’s announcement, there were no new Rs. 500 with the RBI. That is the reason why the new RBI Governor, Urjit Patel’s signature is on these notes and not Raghuram Rajan’s, the previous RBI Governor. If as Modi’s claim this exercise was in the planning for 10 months then it is obvious that Raghuram Rajan’s signature would be on these new notes and there would also have been adequate quantity of these notes available for distribution. The printing of the new Rs. 500 notes in bulk started only after Nov 8th.
2. 2. Apart from the Rs. 8 crores that the Bengal BJP deposited in banks in Kolkata even after the scheduled closing time on Nov 8th, there would have been deposits by the BJP party and their legislators who would have got prior information about the demonetization, in banks across the country. The country wants to know these figures. Additionally post – Nov 8th the BJP MP’s and ministers were given the facility of exchanging their old demonetised notes with new currency. In this exercise it is understood that Arun Jaitley, the Finance Minister topped the list with Rs. 68 Lakhs. Are these deposits being looked at with the same magnifying glass by the IT authorities wherein all deposits in excess of Rs. 2.5 Lakhs will be matched with their IT returns and known sources of income and if there is a mismatch, penalties would be levied as declared?
3. 3. There has been no news of any MP or MLA submitting his bank statements for the period from Nov 8th onwards to Amit Shah. To ensure compliance, should Modi not take the lead and submit his bank statements for this period so that other BJP legislators can follow suit.
4. 4. There is obviously a mole in Modi’s inner circle who leaked the news of the demonetisation to the black money syndicate who must be the same person who allowed for multiple ids to be used for exchange of demonetized notes at banks and post offices. If only people who had accounts at the respective banks and post offices been allowed to exchange notes only there then you could have easily segregated those with no bank accounts. For such people a separate counter could have been formed thus allowing the possibility that some of these people would be those exchanging money for the black money syndicate. Then it would have allowed the authorities to go after those among this bunch whom they consider suspicious and thus achieve some success in getting closer to the black money syndicate. For a pithy mistake by the authorities the IT Dept. are now suspecting a large number of people who in the majority may be innocent being questioned for their hard earned money and also increasing the workload of the authorities needlessly.
In summarising this entire demonetization exercise, one does not understand - Where was the reason to panic? Considering that over the last 2 years or more the money supply had been growing far in excess of the country’s GDP which indicated that the currency, mostly the large denomination notes were being used for other purposes either black money activities or for terrorist funding etc. etc. Note that the spurt in currency and its mismatch with GDP figures was mostly in the Modi era after 2014. Then in April – May 2015 the Gujarat daily had talked of demonetization of large denomination notes, then in July – August 2016 – there was talk of a Rs. 2000 note being launched and then in September 2016 – there was talk of a new Rs. 500 series. Putting all this together Modi hit panic stations end Oct and then spilt the beans on Nov 8, 2016. This was no way to go for a mature and rational individual used to the ways of large scale policy initiatives. What needed to be done was that to defer the demonetization to lull the black money syndicate into comfort, but introduce the Rs. 2000 note and then the new Rs. 500 note when it became available in sufficient volume. Then we would have three denominations of Rs. 2000, Rs. 1000 and the Rs. 500 but actually 4 types of notes since the Rs. 500 would be of two types. This would have set the black money syndicate at ease confirming their information that new notes were coming but the expected demonetization was not happening. Then about a year down the road or even later, since there was no emergency to start the fight against black money, pull out the Rs. 2000 and the old Rs. 1000 and Rs. 500 notes while launching a new Rs. 1000 note. This would have left the public with the denominations of Rs. 1000 and Rs. 500 as earlier. This process would have also given more than enough time to print the new series of Rs. 1000 which would not have set off alarm bells ringing since with new notes of Rs. 2000 and Rs. 500, a new note of Rs. 1000 was logical. When the new Rs. 2000 would be demonetized then it would have wiped out almost 90% of the black money held in cash since by that time the Rs. 2000 would have graduated to the status of preferred note for black money stashes and the pulling out of the old Rs. 500 would be of no consequence. This is what is called – riding the wave, changing things according to necessity but keeping the larger perspective in mind. Unfortunately these are aspects which Modi has not learnt since his approach is that if you see an ant go after it with a hammer!
Modi Should Change Tack Aim At Politicians and Government Employees
Modi's demonetisation has not made even a minor dent in reducing black money and corruption. The whole exercise has been to exhibit misplaced bravado and hide adverse facts and promote those that seek to extol demonetisation. To give you an example NHAI has estimated that it will have to pay Rs. 922 crores to private toll booth operators across the country to compensate them for exempting payment of tolls by highway users in the period from the afternoon of 9th Nov to midnight of 2nd Dec. Similarly the operators who fill ATM's with cash are likely to send a bill in excess of Rs. 400 crores to the government for the loss in their operations because firstly, they are not being given enough cash to fill ATM's which activity has dropped from an average per ATM of Rs. 7 lakhs/day to Rs. 1.5 lakhs/day and secondly, most of these operators keep the ATM's functioning on a fee per transaction which has drastically dropped since the number of hours of ATM working has been drastically reduced and non-functional ATM's far exceed the ones that are working. Thus if you take just the Rs. 922 crores the NHAI has to shell out, it is far in excess of the aggregate total of all seizures made since Nov 8th of cash, both demonetised and new, gold, jewellery and what-have-you. The seizures made through raids etc. are puny and are nowhere near the estimated size of actual black money in the country. The continuous news in the media about seizures is only a publicity stunt to show that the demonetisation has actually worked.
Demonetisation was an excellent tool to get at the cash component of black money which Modi & his team muffed up as we have seen in the last 50 days. But the amount of black money kept in cash is hardly 10-15% of the total. Thus Modi has to go after the other ways that black money is kept. Black money in benami properties be it land or otherwise is another method which Modi says he is going to tackle next. And one is sure that his further target should be in bringing back the black money abroad. Modi was to bring back the black money from abroad particularly Swiss banks within 100 days of assuming office but now with more than 800 days having passed there is nothing in sight. To cover up on his lapse or inability to bring black money from abroad Modi embarked on his short-sighted binge of demonetisation which has brought day to day lives in homes and businesses, in fact every sphere of economic activity across the country to a near halt.
To fight black money apart from benami properties Modi has to show the will to tackle election funding by political parties. This is a major area where black money is deployed. In fact all political parties needs to be brought under the ambit of the CAG and their accounts compulsorily audited every year, failing which the Election Commission should de-register them.
As for the fight against corruption Modi needs to have the courage to attack two principal groups - politicians and government employees. Between these two groups more than half the corruption in India is accounted for. For politicians based on their asset filing with the Election Commission, IT assessments should be done to see whether their income matches their assets growth which irrespective of party affiliation has been growing astronomically each time they file a new asset form with the EC. When there is this very visible class of people who have been accumulating ill-gotten wealth staring Modi in the face one wonders why he is going after looking under each carpet to unearth black money hoarders? The question is will Modi have the guts to fight his own breed?
As for government employees where corruption is a way of life for the majority and nothing really moves without the lubricant of money, Modi should show the will to target them. Modi started with a lion's roar about making government employees work upon taking over in 2014 but over the 2 years since in 2016, we have found his approach to this class has been that of a mewing cat. What needs to be done is that Modi should withdraw the 7th Pay Commission already in place and implement a 'pay for work' salary system based on an incentive scheme. Set the base salaries of government employees at the levels prior to the 7th Pay Commission and let them earn the raises of the new scales as an incentive for better productivity. The Niti Aayog can work out the productivity norms for all classes of government employees which will be at least some 'productive' work that they would have done. The shock of demonetisation where some of their hoards would have been evaporated and the productivity based salary system should encourage the government employees to put their noses down into their work or in contrarian terms at the least get involved in finding ways to beat the new system.
Unless we do the above there is no future for this country and we will be turning the pages of the book of the saga of black money and corruption over and over again.
Modi Should Come Clean On Gujarat Corruption Charge
We are in a curious situation in India where scams are counted by size and it appears one party wants to outbeat the other by the number of scams and the value associated with them. Otherwise why should the BJP defend Narendra Modi against Rahul Gandhi's charge of having taken money from the Sahara group and the Birlas when he was the Gujarat Chief Minister by saying that the Congress has been involved in more scams. The scenario here is like when you are at the circus watching two competing trapeze artists trying to outbeat each other by going higher and higher, while you watch from your seat mouth agape in amazement. Is the BJP's lame defence an indirect admission of Modi's guilt in this corruption case? Also should Modi as Prime Minister not be interested in clearing his name of these charges? Therefore it is the correct time for him to come clean on this matter.
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