VOX POPULI

by

S Kamat

as

Aam Admi

Issue: 179              Date:  12.12.2016

skamatblog.blogspot.com or aamadmivoices.blogspot.com

 

Contents:

1.      The Month Gone By On Demonetisation

2.      A Salute To Those Gone By

3.      Our Indian Navy Continues To Be Error & Accident Prone

The Month Gone By On Demonetisation

It has been a month since 8th Nov 2016 when the bogey of demonetisation was unleashed on this country by Prime Minister Narendra Modi. The aim for this measure was laudable considering it would be a major step in the fight against black money and corruption along with incidental gains against counterfeiting and funding of terrorism. The narrative has changed now considering the massive problems caused by the faulty and improper implementation of the measure which has led to massive cash shortages that has like a virus spread across the country and all sectors of the economy and slowed everything down. In terms of the original objectives of  hitting black money, it has possibly touched the tip of the iceberg while corruption continues to flourish unabated as signified by the seizures of new currency in recent raids. As far as counterfeiting the operators will need more time to replicate the new notes but then we have had our own brethren cheat their not so smart compatriots by exchanging the demonetised notes with photocopies of the new Rs. 2000 note! Terrorism funding has been impacted somewhat but even there some of the terrorists caught in Kashmir were found in possession of the new Rs. 2000 note. The new tack that Modi is taking on these problems is that these are the first baby steps we are taking towards a cashless economy! 

With the majority of the demonetised notes coming back to the banking system with more to come until the last date of Dec 30, it has shown that Indian households still prefer to hold a cash cache at home for contingencies or whatever and thus the salivation of our IT authorities that they could tax this money may not come true since a majority of this would be tax-paid money. With the chaos unleashed on the Indian public this last month this cash cache will only increase to ensure more comfort from 'what else this man Modi may inflict upon us'. This may be the reason why while RBI continues to claim that enough notes have been released into the system, there is not enough in circulation since otherwise the queues at the bank and ATM counters would have shortened if not vanished. 

Narendra Modi and his government continues to be in denial that the demonetisation exercise has turned into a fiasco to show their disconnect with the people. Modi on his part has shown some irresponsibility by not addressing Parliament and taking them into confidence on the bold measure of demonetisation that he was proud of. Instead of that he has gone to the people with an App that has a loaded questionnaire which supports the demonetisation measure. There is nothing wrong in going directly to the people in a referendum mode but then have an independent body like the Election Commission do it, which will clearly tell Modi no one likes the manner in which it was done. In the absence of this Modi continues to remain in denial mode clutching at straws like a drowning man desperate to save himself. This has been evident in the knee-jerk reactions to combat issue after issue as each sector of India gets hit by the cash shortage. These off-the-cuff responses have a cost to them like exempting toll taxes, parking fees, fees for credit card usage at other bank ATM's and the rush to install POS terminals across the country. Like rush purchases have a mark-up associated with them, thus like they say it is a bonanza or 'hari loot' for POS terminal makers where again maybe foreign manufacturers are being benefited like the Chinese or Taiwanese and for the common Indian it is a 'sar pe lathi' with no money to meet daily needs of family and business. A measure of statesmanship is what Modi should rise up to at this juncture and apologise to the people of India about his blunder. Everyone is liable to make an error in judgment and Modi after all being human is no exception. The people of India will then still forgive him otherwise it would have major repercussions for him and the BJP in the upcoming elections in the States leading up to the General Elections in 2019. 

After Modi's monumental misjudgment on the demonetisation issue no politician and/or government will dare to attempt any kind of demonetisation of currency in India at least for the next 100 years so those among the corrupt and possessing black money can rest in peace for the next 4 to 5 generations. There could be other measures to combat black money and corruption but if they are conceived and implemented as badly as the demonetisation measure then India will become the world's haven for the corrupt and those that specialise in parallel economies. Maybe this present charade of demonetization was played out for just this reason!

May God Help India!

A Salute To Those Gone By

The fortnight that has gone by saw the passing away of some of India’s stalwarts. It was M G K Menon who along with Balamurali Krishna died on the same day. The first was the pillar of India’s science and technology programs after Homi G Bhabha and Vikram Sarabhai had passed away. A man who with great grace and presence piloted India’s advances into indigenous technology in the atomic energy and space exploration fields. But for him we would not possible be where we are in these areas today.

Balamurali Krishna, the doyen of Carnatic classical music who passed away has left a void in Carnatic music that cannot be filled. Listening to him live was a mesmerizing experience being transported to ethereal levels that gave joy and exhilaration to the audience. Wherever and whenever Carnatic classical music will be performed an ode to Balamurali Krishna needs to be expressed.

Jayalalithaa (I’m not sure if I have got the spelling right!) a leader of the masses in Tamil Nadu and unquestioned supreme leader of the AIDMK passed away to great grief and loss to the Tamilian masses. In her own right irrespective of the flaws and blemishes in her political journey, hers will be a milestone that cannot be ignored in India’s political firmament.

The last to make the journey to the other world  was Cho Ramaswamy, the infant terrible of Tamil polity, writer, journalist and satirist whose voice could not be stifled by any political dispensation  and whose political journal – Tughlaq – set standards of social and political criticism which many contemporary publications even to this day find it difficult and hard to emulate. His was an eventful journey through life filled with controversy, dissent and filled with the belief that an opinion held should be exposed to the world at large so that a debate can shape the contours of informed opinion. A salute to a man well-lived!

Our Indian Navy Continues To Be Error & Accident Prone

With the accident of the INS Betwa in the inability of the Naval staff to right the ship, we have seen a culmination of a series of avoidable mishaps that the Indian Navy has seen in the last year or so. These errors in judgment or operational mishandling draw the attention to the fact that whether our Navy is up to the job in terms of its capability to handle its tasks particularly related to the handling of modern high technological equipment. One of the Chiefs of Naval Staff resigned taking responsibility from one such similar incident in the recent past. Thus at a time when we are talking of a ‘blue ocean’ Navy and patrolling the Indian Ocean and the South China Sea there is a need to take a thorough operational review to assess the competence of our Indian Navy personnel at all levels to see whether they are up to the task expected of them.

*****************************

VOX POPULI

by

S Kamat

as

Aam Admi

Issue: 178          Date:  05.12.2016

skamatblog.blogspot.com or aamadmivoices.blogspot.com

NOTE: There was no issue of the Vox Populi dated 28.11.2016. Considering that demonetisation has been at the forefront of our minds this last month, I am attaching a short story written by K G Mallya on the Rs. 2000 note and the reactions of Gandhiji to it if he were alive, to start this issue of Vox Populi. 

Contents:

        1. THE STORY OF Rs.2000/- NOTE by K G Mallya

        2.  Australia & England Are Bad Losers

       3.   Demonetisation Creates The New 'Normal'

       4.   Modi's 'New Normals'

THE STORY OF Rs.2000/- NOTE

By K.G.Mallya

When our Government had withdrawn the circulation Rs.500/- and Rs.1000/- Currency Notes with effect from the midnight of 8^th Nov., 2016, I was on a brief visit to Ahmedabad. During my visits to Ahmedabad every time, I usually pay a visit to the Sabarmati Ashram where Bapuji had spent a few years. And I am glad that during each and every visit, Bapuji would spare some time to talk to me clarifying certain points wherever I have doubts. When I reached the Ashram, I could see Bapuji at his spinning wheel as usual, to take the thread from the cotton piece. He was totally absorbed in the unending the task of spinning and taking the thread. To draw his attention I loudly said, “Bapuji, Namaste!” and before he could reciprocate I climbed the steps and reached him and sat before him on the mat meant for the visitors.  Bapuji adjusted his specs and looked at me and affectionately asked, “Brother, when did you come?” I answered, “Bapuji, I am here on some personal work and as you know, whenever I come down to Ahmedabad, I make it a point to call on you, see personally how do you maintain your health and after getting your blessings I take leave. This is going on ever since I came to know that you are the Father of our Nation.” 

“Well, I am happy!” Gandhiji expressed: “I am glad that at least there are some persons like you who adore me as the Father of the Nation! Now tell me what brought you over here?”

“Bapuji,” I slowly began, “you may be aware that the Government has cancelled the Currency Notes of Rs.500/- and also Rs.1000/- And in their place a new Rs.2000/- note has been put into circulation. There is a lot of confusion in the minds of the people who were used to Rs.500/- Nobody can get change of Rs.2000/- when the purchases are for goods and food-grains of Rs.500/- or so. ”….

“Well, well, well!” Bapuji laughed. Even I had felt that the one new note of Rs.2000/- is given in exchange of old Rs.500/-Note. I was really happy that it is a very good gesture of the people in Authority devising a simple method of poverty eradication! For the old note of Rs.500/- a new note of Rs.2000/- is given in exchange! What a grand idea! He laughed and added hurriedly: “My impression was utterly wrong. Now tell me what do you want to say with regard to this new note of Rs.2000/-“

“Bapu, I just wanted to know before printing your portrait on the note did they seek your permission by showing you the specimen? For example in this note also there is your portrait. In the old note your picture was on the right hand side but now it is in the middle in the new note.  On the reverse there is a picture of our Mangalyaan satellite going round the Mars even now, serving as our great achievement in the space science.  How do you like the new note?”

“Well, well, well!” Bapuji seemed happy. “Every time they come here and show me the note to be brought out and every time I tell them to print in bold letters, our Upanishad Dictum, “Satyameva Jayate” which means “Truth alone will Triumph” But year after year it is printed in microscopic letters and in this note also it is just (in)visible. I think our country has achieved almost the Honesty Level and if that is the case it need not be printed at all! In fact when they presented the first note to me I thought that it is a Ticket to the Mars to fly by our Mangalyaan the fare of which is only Rs.2000/- I thought that our people in power are very generous by not levying exorbitant fare thus enabling more and more people especially the people below the poverty line to fly to Mars by our home-made Mangalyaan!”

After this humorous discussion, I felt that I should ask a question that is relevant to all. So I asked, “Bapuji, going by the reports in the print media, the change of currency notes has created a lot of confusion in the minds of people, especially the common man’s category. What is your observation on this?”

Bapuji became thoughtful for a while and then seriously said, “Any change, good or bad, people will not accept unless it is gradual. Money touches everybody’s life and so one must be more careful when changes are going to be implemented. Our Narendra is doing a good job sincerely and people must bear initial inconveniences patiently. It is just like taking a medicine to cure illness. Initially it will be sour and bitter but later the result will be pleasant and sweet. People must give adequate time for its operation and should not jump to conclusion. Ten or twenty days are not sufficient for such a large country with a huge population to respond favourably or immediately.”

I appreciated Bapuji’s views and asked, “Bapuji, I am convinced. Now the last question: By withdrawing the currency notes of a particular value, will this action weed out the black market or black money completely?”

“I doubt! Because by nature it is not a one shot affair!” Bapuji expressed rather worried: “Black money or black market depends entirely on the honesty and integrity of the people at large especially those who are in the public life and public service. The people in power must lead others by example. This should be a part of education not only in schools and colleges but also in all spheres. This is a very slow process as the roots have gone deep into the society in which we work and live and we cannot expect the miracles over night. Yet, it must be taken up earnestly on an ongoing basis. For the time being let us wait and watch the outcome of demonetization that has taken place just now!”…

( K.G.Mallya, Opp. Janata Auto Works, Main Road, Kinnigoli-574150)

Australia & England Are Bad Losers

After losing two Tests in a row to South Africa, the Australians came up with the accusation that the Springbok captain, Faf du Plessis had been involved in ball tampering in the recently concluded Hobart Test. The charge was that Plessis was sucking on a lolly and the viscous saliva from his mouth to polish the ball on one side. In a me-too kind of charge the English after losing the Vizag Test charged the Indian captain, Virat Kohli similarly. The two countries, Australia and England used to be at the top of international cricket and at that time many a charge of bad behaviour on the field, sledging etc. used to be brushed off by them. Now that both countries cricket is on the decline, they are coming up with these frivolous cooked-up charges which they should avoid and concentrate on playing good cricket. That is what is best for the game.

Demonetisation Creates The New 'Normal'

If Narendra Modi is proud of the demonetisation move and in the manner of its implementation he should as a member of Parliament and respecting the status of it as one of the pillars of democracy in India, should address both Houses of Parliament. Avoiding going to Parliament is an insult to the august House to which he also belongs and in turn the constituency - Varanasi, that he represents and also the whole of India. Creating an App and seeking people's responses is not enough since to get a feel of the reactions it is important that he has a dialogue with the affected people and with their leaders. In a similar manner addressing public rallies without the option of a live feedback is also an infructious exercise and only serves to lubricate the speaker's opinions and satisfies himself that he 'has gone to the people'. Though the demonetisation move is desirable what it has ended up is having what used to be called the 'licence' or 'permit' raj in another incarnation launched across India where your own money you are asked to draw in trickles, for your children's wedding you are 'given' a certain amount and told how you should spend it and farmers are given money to buy seeds and not fertiliser. This is the highest form of interference in personal liberties and for a country like India whose name was counted as an example of a functional democracy we are slowly but surely eroding that image. All this because the demonetisation move was timed wrong. When Arun Jaitley says that Narendra Modi is creating the new 'normal', it is very much so considering that you can today have money like the new Rs. 2000 note which you cannot spend because you cannot get change thus giving you the feeling of being rich without actually being so.

                                                               Modi's New Normals

Arun Jaitley has correctly said that PM Narendra Modi is setting 'new normals' in India. The first among these is that if even one has a definite opinion about any government policy measure and/or initiative then one should not express it since like in the context of the demonetisation measure, one risks of being branded one of three things, a mouthpiece for those having black money or having black money or being called anti-national or being against national interest. These were the same arguments in the case of cow slaughter and earlier to that, when  the intolerance issue was expressed over secularism.

The second 'new normal' is that Narendra Modi after ranting against those who looted the country for 70 years and amassed black money; he even shed crocodile tears on the issue twice while speaking publicly and then what did he go out and do but allowed the black money holders to continue amassing their ill-gotten wealth. How is that but by accomodating them to do it in the smaller size new notes of Rs. 500 & Rs. 2000, so that with the existing space they can store more black money! So for 'new' black money you have a 'new normal'. And now they are Modi's new black money holders!

It is important for our leaders and politicians to clearly know that any project, initiative or measure be it in the private or government domain has a cost associated with it which is two-fold - the economic cost and the human cost. Thus irrespective of the paramount importance of the measure to our society and/or country, we may have to give it up entirely or defer it depending on what is the cost of it and its resultant impact on the people. The quality of our leadership in normal times is determined by how they select such of these projects/measures which can be implemented at the minimal cost to the society and the exchequer. In the present demonetisation measure, Narendra Modi and his government has miserably failed on this yardstick. Even though Modi has been trying to clothe himself in the robes of a savior of the poor and the slayer of black money and corruption, the gains of the demonetization exercise has been minimal while the pain to the people has been the maximum. The unfortunate part is that the pain to the people because of the cash shortage is continuing with no end in sight for the next 5 months. Moreover more than 80 people have died in the queues in front of banks and in cases incidental to the demonetisation since 8^th Nov 2016 which the government is tending to ignore along with our Parliamentarians in the Opposition. The families of the people who died in these conditions should get a public apology from Modi for unleashing the tsunami of anxiety stress, chaos and confusion on them along with a promise for substantial compensation. Thus the third ‘new normal’ of Narendra Modi is that I will do what I like and the people of India be damned. These are signs of an immature, insensitive and incompetent government.

 The fourth ‘new normal’ of Narendra Modi is that ‘things will take care of themselves’. This is being stated considering how the demonetisation measure has been implemented. Any school kid in the primary school would have told Modi that without the new Rs. 500 note the exercise of replacement currency would not work. The reason being that the Rs. 500 given the inflation prevailing has become the old Rs. 100 note in purchasing power and with the Rs. 2000 note would have allowed people to change money. Thus the exchange of the old demonetised notes up to Rs. 4000 starting Nov 10th should have been done with 1x Rs. 2000 note and 4 x Rs. 500 note . And if the new Rs. 500 note was not available then the demonetisation measure should have been postponed. It could have been implemented later when sufficient quantity of the new Rs. 500 notes became available getting the same results as the present demonetisation measure but with considerably less pain to the people. Why did Narendra Modi go ahead with the demonetisation measure without the new Rs. 500 note? -  will be the Rs. 10 crore question in the next season of Kaun Banega Crorepati! It is not just that but the knee-jerk reactions of how much cash could be drawn by people from their own accounts and for what purpose show a completely amateurish unawareness and complete disregard of what happens on the street. The thing is continuing till this day some 30 days from Nov 8 when demonetisation was announced. And as one can see people have been left to manage by themselves as sector after sector of trade and business gets hit across the country and moves down to a lower level of activity. The cash scarcity has started pinching many of the embassies of foreign countries in Delhi and countries like notably Russia have threatened to impose reciprocatory restrictions on Indian embassies in their countries. However, inspite of this Narendra Modi and his government continue to remain in denial on the travails of the prevailing cash shortage. It is curious here that that while people are queuing  up at banks to withdraw currency and small businesses are being rationed cash, there are seizures of new currency running into lakhs and crores across the country mostly from people linked with the BJP. There obviously seems to be a leak in the currency allotment process by RBI and the banks where the ruling dispensation is getting preferential allotment of currency at the cost of the common people. One also wonders why this aspect has not been taken up by the Opposition political parties in Parliament?  

The fifth ‘new normal’ that Narendra Modi has established is to ‘change the topic and attempt to divert it desperately’. Thus in the unfolding days after banks opened on 10^th Nov 2016 post-demonetisation and Modi saw the chaos being generated across India he immediately started singing the paens of a cashless society and encouraged people to go cash-less. This knowing full well that the coverage of mobile ownership and mobile coverage not exceeding to all parts of the country. The attempt was to divert attention away from the cash shortage at any costs. Say anything, do anything but move the spotlight away from the queues at the banks and the woes of no cash. Asking people to move away to cashless transactions in a big way without actually testing these networks and systems for being strong enough to be true to deliver valid and correct transactions in large volume and resolute enough to prevent malpractices like hacking etc. was completely  irresponsible. We had lately seen how international gangs had hacked through the ATM network of some of our banks and withdrawn large sums of money which was the immediate past precedent of the risks involved. The original objectives of the demonetisation exercise announced on 8th Nov 2016 were to eliminate black money and corruption, fight counterfeiting and funding of terrorism. Now these are being de-emphasised to focus on cashless economy like in 'developed' countries etc. etc. since it has been proven that very little black money was impacted by the demonetisation, corruption continues unabated. 

The sixth ‘new normal’ that Narendra Modi has established is to - 'Associate with Industry and Blatantly Promote Big Business'. The links of Modi with the Adani group are well-known and the present demonetisation crisis has brought to the fore that the PM prefers to associate with Reliance Jio, Paytm and other Cos. in the communications sector like feature phone and smart phone Cos., the latter being essential for cashless operations. Not in the last 70 years has a smiling PM figured in full page ads taken out by corporates like Reliance and Paytm in national newspapers across the country. 

The seventh ‘new normal’ that Narendra Modi has established is to - Bring Back Inspector and Licence Raj In A New Avatar. The moment banks re-opened on 10th Nov 2016 to proceed with handling the demonetised notes, we have been receiving multiple advice which at times has been contradicting. Like all deposits exceeding Rs. 25,000 of old notes in bank accounts would need PAN nos. which earlier used to be Rs. 50,000, and then revised to Rs. 50,000. That any deposits above Rs. 2.5 Lakhs of old notes would be issued IT notices, revised later to Rs. 1.25 Lakhs. Just imagine with the volume of such notes coming into the banks and also as deposits, the huge amount of data will by itself encourage errors and then selective choice of certain individuals to be targeted. This is nothing but the old inspector raj in its new reincarnation of 'raid raj'. With just about a month of the banking system handling the cash shortage they are coming apart at the seams and the bank unions have been complaining that something drastic has to be done to improve the situation. In another quarter the same situation will be evident with the IT Officers Association who will be shouting from the rooftops that they are being saddled with unnecessary extra work. The reason for this is that almost all the demonetised currency has come back to the banks except to the extent of maybe 10% which as we go towards Dec 31st maybe also coming in leaving a miniscule amount left back. This would mean that most of it was legitimate money in the hands of the people, maybe with little amounts that was avoided in income tax. Thus the present crowing about tax recovery on these deposited amounts will add to the exchequer may also turn out to be a wrong hill that the authorities are barking up since a large part of it may be already taxed which the IT Dept. will realise at the end of the day. This leaves only the amounts that have come into the Jan Dhan accounts. Now these amounts will get locked in litigation either way and it will take many years before this puzzle is resolved. Thus with almost all demonetised notes coming back into the banking system Modi will not have the moolah to give to the Jan Dhan account holders as their bonanza  and he will not also be able touch the deposits in the Jan Dhan accounts due to legal reasons. Thus what would have the demonetisation achieved but minimal gains than that expected making it the biggest political scam for the last 70 years just for bad planning and implementation. Hereafter in free India no government will ever dare to  demonetise any currency any more for the next 100 years after Narendra Modi's blunder and fiasco that he set off on 8th Nov 2016. 

Concluding one must say why no one be it in government, RBI, trade or industry has had the sense to advise Narendra Modi on this demonetisation and similar governance matters that these may be wrong and not in the best interests of the country and its people, but just stand around and nod their heads like 'yes-men'. If this continues a day will come when the Prime Minister will walk into a prestigious function only in his underwear and we will all be in praise of the Emperor's new clothes!

MODI'S NEW NORMALS:

1. Stifle Public Opinion. Restrict The Fundamental Right of Free Speech.

2. New Black Money & Their Holders Are Welcome.

3. Ignore Public Sentiment & Impose Needless Pain On The People.

4. Avoid Confontation of Issues In The Belief That Things Will Take Care of Themselves. 

5. Keep Changing The Dialogue Since Public Memory Is Short.

6. Associate With Industry & Blatantly Promote Big Business. 

7. Bring Back Inspector & Licence Raj In A New Avatar. 

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VOX POPULI

by

S Kamat

as

Aam Admi

Issue: 177              Date:  21.11.2016

skamatblog.blogspot.com or aamadmivoices.blogspot.com

Contents:

1.       Tipu Sultan: The Man and his Jayanti

2.       The Demonetization Mess Continues Unabated

3.       India Reduced To A Banana Republic & Under Authoritarian Rule By Demonetization

Tipu Sultan: The Man and his Jayanti

The legends of Hyder Ali and his son, Tipu Sultan are etched in our minds through the history books that we read in school. The fact that Tipu outshone his father is also common knowledge. That Tipu Sultan was a thorn in the flesh of the English in their quest for establishing the British Empire in India is acknowledged by his sworn enemies, the English themselves. That Tipu was a master strategist and a brave warrior is recorded in the annals of many a historical battle. His principal aim was to consolidate and expand his kingdom in the South. For this his principal enemy were the English in their aim to add India to the burgeoning British Empire. To fight them Tipu Sultan reached out across the seas to ally with French, traditional enemies of the English at that time. As an administrator he was known for implementing an efficient and sympathetic revenue system. Tipu Sultan also encouraged industry to be established in the Mysore kingdom and the advances in rocketry that he achieved was used by the English in later years. Those who criticize historical figures like Tipu Sultan should remember that the times in which these people lived were different, the value systems were also different. We cannot view these figures through the lenses of present and modern times since it would be patently unfair to them. Another thing that those who raise their voice against Tipu Sultan should remember that for whatever reason people still remember him some three centuries after his death, for good or for bad which may not be the case for these people since most of them after their death will not be remembered for any equivalent span of time. Men like Tipu Sultan stride on the canvas of history painting it with their exploits and achievements which are relevant for that day and age which lesser mortals should not try and undermine. Give the man his Jayanti since Tipu Sultan fully deserves it.

The Demonetization Mess Continues Unabated

The senior ministers in the BJP like Rajnath Singh are toeing the instructions of the PM to defend the demonetization measure but the way they come across to the media, everyone seem very defensive about the whole thing. They proffer lame-duck arguments which from their sheepish manner it is apparent that they are not convinced about the benefits and the manner in which the whole thing was done. While quoting the thousands of crores that went into terrorism and counterfeiting that has been now saved by the demonetization measure, they are missing the point that the country is losing at the rate of Rs. 25,000 crore a day in GDP and this figure is increasing as the days pass by with more and more sectors of the economy facing the cash crunch. A loss in GDP means people’s productive output is coming down which translates into livelihood issues for the people. As we glance across India the non-availability of cash is hurting all sectors and as time goes by the impact will be more widespread and go deeper and deeper. By conservative estimates it is indicated that the cash situation will take at least 6 months to normalize given the production capacity of our currency printing presses to print new notes. By that time one does not really know what India’s economic position will be? It is going to be uncertain times.

On the back of drought in two consecutive years the Indian economy was looking up a bit with the better than normal monsoons across the country this year. The farmers with better crops were looking at more money in their hands. But then on Nov 8^th the ‘manmade drought’ struck on the instructions of PM Narendra Modi and 87% of the notes in circulation at one stroke became worthless pieces of paper. The people were nonplussed with this development that was projected as benefiting the poor by eliminating black money. But it is the poor and the weaker sections and the villagers in rural India who have been the hardest hit.  They actually do not know whom to turn to.

In all this exercise there seems an ulterior motive to benefit certain lobbies. With the scarcity in cash and the Rs. 2000 note a decorative piece in the hands of consumers, small traders like grocers, fruit and vegetable vendors essentially small businesses have been hard hit. Where perishables are involved the sellers are reducing their stocks for fear of the stocks rotting. The same applies for grocers who have reduced their stock holdings by 50% to match the number of customers coming in with spendable money. Thus if the cash crunch continues for another 6 months, there will not be many of these small businessmen around having been forced to shut shop. Where are the customers going that used to go to these businesses? They are going to the big departmental stores and shopping malls where they claim they are able to get change for the Rs. 2000 note or who continue to accept the old Rs. 500/1000 notes. Thus the demonetization has sounded the death knell of small traders and businesses who will find it extremely difficult if ever things become normal again in the trade. Thus is Narendra Modi cultivating the big stores and mall promoters lobby at the cost of the small businessman?

On 9^th & 10 th Nov full page ads were taken in national newspapers by PayTM and others suggesting the alternative to no cash in people’s hands. These ads carried the smiling visage of Narendra Modi indirectly asking people to support PayTM and other cashless money providers and electronic wallets. On the back of a similar ad by the Adani group a few months back this is the first time in free India that the Prime minister is plugging for a private operator and obviously seeking acceptance and contributing to his profits. This was clearly bad form and Narendra Modi should have avoided these ads irrespective of how much he can re-iterate that he cannot be bought but people will think otherwise. The cashless operation will work in metro centres where the people are IT savvy and comfortable in using PayTM or mobile wallets. In the rural sector where literacy and education is deficient and street savviness is non-existent, these mechanisms will not work. Moreover the network coverage is not reliable for assured transactions that will go through. Moreover Indians prefer a paper trail for any on-line transactions to avoid the deniability of the payment receiver. If acceptance of cheques has not taken off for payments within cities because essentially the trust factor is lacking between the buyer and the seller, how wil higher orders of transactions work. From statistics of cheque bouncing and comparing this with developed countries you can get an idea of why cashless transactions of the simplest variety of cheque payments has not worked in India. 

The  demonetization has not been able to curb the black money since many of those who possessed whatever little they had of it in cash have been able to transfer it to gold or have had it converted through ‘currency mules’ and or deposited it in the banks either their own or benami accounts or Jan Dhan accounts. What demonetization did was to make counterfeiting void and wiped out funding of terrorism , both cross-border and local Maoist inspired. But both are temporary phenomena since these people will find a way to duplicate the new notes though given the better technology used, it may take them more time. The same applies to terror funding where again they will find a way. Even black money will rear up its head again in an uglier avatar since the present measure has not been able to dent it much.

But the major unanticipated benefit which Narendra Modi and his financial advisors did not expect is the bonanza of money flowing into the banks as deposits. This amount at last count was Rs. 5 Lakh Crores give or take a few Lakh crores which would have been taken by way of conversion of old notes. Even then this remaining amount is a sum that is bringing a smile to every banker’s face. This amount also shows how much cash cushion each Indian keeps with him for a rainy day not wanting to trust the government or its banking system. There is a credulity gap in the system somewhere. In any case with these funds available with the banks they are looking at reducing the interest rates. Thus the benefits of the demonetization has been to the banking system which were reeling under losses because of NPA’s have suddenly turned profitable. The higher capitalization requested by the banks to the government which the latter was hesitant to provide has arrived now like manna from heaven. The banks can clean out their books of the NPA’s now since the amounts of deposits received and the NPA’s are equivalent.  Thus like we saw lately that the Rs. 8000 crores owed by Kingfisher Group to SBI was ‘written off’, we will have other NPA’s being written off also. This will mean that industrialists benefited from the demonetization and not so much the poor and the weaker sections of society contradicting PM Narendra Modi’s position on the issue. This therefore requires that the PM’s promise is restored and that is why these rumours now floating around that Rs. 10,000 will be deposited in each Zero-Balance Jan Dhan accounts. That is if Modi can find any Jan Dhan accounts with zero-balance since a couple of months ago the bank personnel were putting Rs. 10 into these accounts from their pockets to show that these were operative accounts and the rest of the accounts would have been used by the black money holders to launder their ill-gotten money. But this kind of a gesture will go well in the run-up to the Assembly elections in UP & Punjab and should wipe out the travails suffered by these people in going through the process of exchanging the demonetised note. Again it fits in with the counter to the jibes aimed against Modi by the likes of RJD’s, Lallu Prasad Yadav who has asked when the PM is depositing Rs. 15 Lakhs in each Indian’s account that he was supposed to bring back of black money stashed abroad. Modi can now say that the first installment is paid to some of the most needy people and the rest will follow!

India Reduced To A Banana Republic & Under Authoritarian Rule By Demonetization

Politicians and administrators should understand that public inconvenience should be minimised while implementing any measure. This is what Narendra Modi and his team should have realised in the context of the present war against black money and the demonetisation of the high denomination notes. The BJP has to comprehend clearly that no one is or very few are against the demonetization measure. It is in the manner of implementation which everyone is unhappy about. Could the process not have been better managed is what is on everyone’s lips? Re-emphasising secrecy to explain away the problems is not going to work since on such matters secrecy is vital but it does not mean that you implement and then ham-handedly go about solving whatever problems emerge or come forth. That essentially has been the government’s response - very much reactive rather than be top-down and driven by the government. Thus you will see that the limits for exchange were raised by a mere Rs. 500, the weekly bank withdrawal limits were raised by Rs. 4000 and the one time withdrawal limit of Rs. 10,000 was withdrawn. These are just very cosmetic changes. Then again the exchange limits for the old notes was reduced to Rs. 2000 for Sat, 19^th. There are rumours like the ATM withdrawal limits going up to Rs. 4000 from the existing Rs. 2000 from 19^th Nov is not going to happen. That one will be marked with indelible ink at the time of exchange of the demonetized notes, that one can draw Rs. 2.5 Lakh one time for a wedding by a family member. Little do the authorities know that the marriage funding will again be misused. What is the proof that is required to be shown to avail this facility? If it is printed wedding invitations, it is quite cheap to print cards so that one can obtain Rs. 2.5 Lakhs in cash. Thus you will have a spate of weddings that will not be performed but created to just avail the cash facility.

That farmers considering this is the sowing period will be allowed to draw Rs. 50000. against a sanctioned loan. If you see all these latter measures are absolutely reactive confirming that the policy makers at the time of the announcement of the demonetization did not take all this into account. That is the general story that for not doing their homework properly the government has to run around haphazardly like a chicken with its head cut.

Gujaratis are known to be street smart and resourceful persons thoroughly familiar with business But Narendra Patel, Amit Shah and Urjit Patel do not seem to be of that ilk since otherwise we would not be in this unholy mess. One needs to say here that if Raghuram Rajan had continued as RBI Governor maybe nothing like this would have happened and/or this process would have been managed better. It does not need a mathematician to tell Narendra Modi that the exchange of demonetized notes set at Rs. 4000 initially should have been given with 1xRs2000 + 4xRs. 500 which would have ensured that people had spendable money in their hands and this cash crisis would never have emerged or it would have been there to a lesser extent. But where was the new Rs. 500 note?  It was not there then and even after more than a week having passed 8^th Nov, it has not been seen to sufficient volume. In the answer to that question is the solution to the chaos that has been spread across the country.

Consider how the exchange of the demonetized notes was implemented. People were asked to go to the banks with an id and allowed to exchange up to Rs. 4000. Though it was clarified that the exchange facility was being given only once until Dec 31, the loopholes of multiple ids specified that the same person could go to different banks using one id card at a time and exchange a total of Rs. 20,000 or more. The banks were also helpless since they had no clue if the person exchanging notes had availed of the facility earlier. This lacunae was exploited by common citizens as well as the black money holders. The latter employed currency mules to convert as much of the old notes as they could. The government had in fact made it easier for the black money holders since with the Rs. 2000 notes their storage space had been more than halved! Also the fact that a huge number of Jan Dhan accounts were available whose holders were ‘willing and purchasable’, black money was pumped into these accounts with the philosophy that – Do it for now, we will look at the consequences later! (Ab ke liye karo, baad me dekha jayega!) Thus where these accounts should have been used as an advantage to implement the measure, they facilitated the black money holders to exploit them.

Consider the chaos that was witnessed during the first few days and which to a degree is still continuing. If people had been asked to report to the branch of the bank where they have their accounts where the exchange of the notes would be done then the rush at the banks would have been less. The exchange of the demonetized notes could have been done on the basis of the account holders id, his passbook and a declaration that in case of his possessing another account with another bank he would not avail of the facility to exchange the notes at the other bank. The demonetized notes could have been deposited in the account holder’s account and he could draw the new notes from it. The account holder’s passbook could be stamped with date by the bank to identify of his having availed the exchange facility. Those having accounts at the post offices would be allowed to exchange their notes similarly. Again all those who are not in the banking system and who do not have a account at any bank or post office could have been directed to a number of centralized places operated by the bank handling the treasury chest in that region. It could be an off-line place of the bank like a regional or administrative office which is located close to the treasury chest to facilitate easy money transactions. The person coming in for exchange apart from the id proof and filling up the requisite forms could be photographed at entry and marked with indelible ink at the completion of the transaction making him conscious that he has been identified as well as marked, negating or minimizing the possibility of his coming again. This method would have isolated those who are maybe in cohorts with those having black money and using others to exchange money multiple times.  Was this something beyond the knowledge of our banking personnel, RBI and Finance Ministry officials? It is not that. The situation seems to be that Narendra Modi consulted very few competent and knowledgeable people and decided to wing it on his own. The result is for all of us to see and that is that Narendra Modi fell flat on his face on the ground.

This is pretty much the opinion that Narendra Modi himself has, one would think since otherwise after having implemented such a stupendous and earth-shaking measure why has he gone into hiding? He should have appeared in Parliament and with his 56” chest proudly told his colleague legislators of what he had done.

Other than these things there is something elusive about why the demonetization measure was done suddenly on 8^th Nov. Why the sudden urgency? Why as it has been stated did not Narendra Modi not wait till the New Year of 2017 and launch it when all new notes particularly the Rs. 500 denomination would have been available in sufficient number? The scenarios in this are many. Let us consider the first which is our PM Narendra Modi’s event management style. He always wants a dhamaka irrespective of a few people getting hurt or dying, 40 or more at last count, in that process. Thus the demonetization measure was an unprecedented move and right before Parliament meeting on 15^th Nov, allowing Narendra Modi to take credit for the demonetization measure. Unfortunately that did not happen and the BJP has been mouthing the same platitudes of the advantages of demonetization with its back to the wall. As for the 40 or more people who died because of the crisises, ranging in age from babies to elderly people, because of the demonetization, Narendra Modi as PM should apart from paying their families compensation, fast for one week to atone for the lives lost. This will teach him that leaders should govern in such a way so that people suffer the least. Sacrifices should be called for at the time of natural disasters, acts of God and in times of war but not when leaders because of their incompetence heap misery on the people that they rule.

The second scenario is that information about the demonetization measure had been leaked out and had reached the black money holders and even a single day’s delay would mean that the measure would fizzle out. Thus Narendra Modi went ahead with it without waiting for the crucial new Rs. 500 note which was required along with the new Rs. 2000 note. So it was a limited gain scenario.

The third scenario is that the BJP as a party and its members are not devoid of possessing black money. Thus the slipshod and ham-handed operation for exchange of notes as above was implemented giving the BJP people also time to convert their black money. Evidence pointing to this being true is in the incident where the Bengal BJP deposited Rs. 8 crores or more into the bank on the 8^th Nov and minutes before the PM went on air. Further proof is that a BJP Minister in Maharasthra has admitted that the amount of close to Rs. 1 crore in the demonetised notes seized does belong to him. No other political party or its people have yet been caught with the demonetised notes. There have also been rumours that Adani and Ambani had been given information on the demonetization well in advance.

These are only guesses and we will have to wait and see if ever the truth on this comes out.

Thus when dawn broke on two successive days on 8^th and 9^th Nov 2016 in India, the first day was when everything was normal and the 125 crores of Indians went about their normal lives but as the day progressed and evening came, a fury was unleashed on India in the form of the demonetization of the Rs. 500 and Rs. 1000 currency notes wiping out whatever little money the people had and making them paupers. On 9^th Nov 2016 with banks being closed the Indians did not know whether they were a banana republic located in the Carribean or South America or one of the countries in Africa once called the Dark Continent since they found that in these times of high inflation and cost of living zooming skywards, a financial Emergency had been imposed upon them. Since the 8^th Nov 2016 and until date every Indian has found that he is unable to withdraw his own money from banks for legitimate expenses be it for medical expenses, family functions or weddings and is being told that today you can get only this much and do not ask any more during this week. This makes every Indian feel that we have become an authoritarian Communist country behind the Iron Curtain where all resources including money belongs to the government. Toad in India if one raises his voice in protest he is branded as a black money holder and anti-national to boot since morality and patriotism is the exclusive preserve of Narendra Modi and the Bharatiya Janata Party members.  This, my friend, is the country you are living in and one may say that things will only become better but one never knows with Narendra Modi promising more ‘action’ after 31^st Dec in the war against black money. How you or I are going to be affected, God only knows!

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