DEMONETISATION

                                                                                                                                          11.01.17

It was a massive exercise. It was a tsunami which swept away 125 crores people off their feet. Many crushed under its impact. Their employment destroyed. Many died because they could not meet the expenses urgently needed. People stood in lines across the country to exchange their notes then to withdraw money. Women ,elderly and even sick people stood for hours outside banks. Many died due to sheer exhaustion. Now when the demonetization exercise is over it is time to assess whether all this was actually necessary or was it all a done to satisfy the ego of one person. This one person who neither has the requisite qualification to take such a major decision and neither has the temperament to listen to the advice of those who are capable. The track record of Mr Modi is not something to be proud of. His abusive speeches, his arrogance and his communal ideology is well known. His achievements are like colourful balloons which float high above but touch them and they burst. His bhakt brigade is selling demonetization to the people as a great visionary step towards removing corruption and black money. However when they saw people are seeing through this game they started harping on digital India. Let us look at the following points :

 1. It has been reported that as of 31.12.16 most of the money in circulation which was about 15lakhs crore have been deposited in the banks. That clearly indicates that demonetization did not destroy the black money in the economy. So what was the purpose of all this massive exercise.

 2.Corruption did not stop even during demonetization period. More than 4000crores in new notes were recovered and there is no estimate how much was exchanged by bankers and jewelers.

By the way how can one stop corruption through demonetization. Those who want to pay  under the table for their work to be done would continue to do so. Income tax officials,MCD officials .Police etc are not going to stop receiving bribes. So all this claim that demonetization will stop corruption is all bunk. Only stringent action by concerned departments can have some effect. I want to ask Mr. Modi how many are behind bars and how many have been prosecuted. I also want to ask him why he allowed Vijay Mallya to escape to London after robbing banks of nearly 7000 crores.

 3. Mr. Modi also claimed that demonetization would eliminate fake currency. Yes, maybe the existing stock but has it stopped further printing of fake notes. With the new 2000 Rs new notes it has become easier to fake less notes with more value and it is easier to stock them in less space. Already there were reports that fake 2000 Rs notes have come into circulation. Look  at this news. Two young boys have already printed 6 lakhs fake currency in new 2000Rs denomination. Link

 4. A lot of publicity has been made to claim that demonetization will boost the economy,will clean the economy blah blah blah. The recent figures released by the RBI puts the GDP growth at 7.1% reduced from 7.6%.  This does not include figures after 8th November when growth of the manufacturing sector and agriculture output dipped to seriously low levels due to cash crunch. If post demonetization figures are included then the GDP will further reduce to 6%. Shri Manmohan Singh was right when he pointed out that demonetization was a foolish step and would dangerously hamper the growth of a growing economy and the GDP could slip to 5.5%.

Nobody knows who advised Mr. Modi to take this antinational step.

 5. Similarly Mr. Modi and his bhakts shouted hoarse that demonetization has neutralized terrorists and hereafter there would not be any terrorist attacks. They first claimed that stone throwing in Kashmir has stopped which was hilarious since there was no stone throwing since 2 months. More was to come. Soon after demonetization was announced on 9th November Havildar Satnam Singh lost his life in Kupwara district. On 19th November, United Liberation Front for Asom (Independence) carried out an attack on an army convoy in Assam’s Tinsukia district. On 22 November Pakistani terrorists alongside ‘Border Action Team’ ambushed soldiers of 57 Rashtriya Rifles in Kupwara district. Three Indian soldiers lost their lives as body of one of them was inhumanly mutilated. The worst was in store for 29th November when terrorists attacked Indian soldiers at Nagrota. Seven Indian soldiers including two Major rank officers were killed. So all this claim that Mr. Modi  has abolished terrorism was a humbug. Demonetization  had nothing to do with stopping terrorism.

 6. Linking demonetization with making India digital was a afterthought. It was a cleverly crafted idea when it became apparent that demonetization has not only failed but has damaged the economy. With 86% of the currency abolished and only 37% replenished the people were in panic. So this idea of digital India was floated. In a way it was forcing people to use cards or e-wallets. This was a foolish idea. Is it possible for a country which 90% runs on cash transactions to change overnight to digital transactions ? Perhaps Mr. Modi is not aware that 60% of the population do not have bank accounts and there is no internet connectivity in large parts of rural India. Even there are no banks in most of the rural India. Farmers and laborers are comfortable with cash transactions. Under these circumstanceous to insist that everybody should switch over to digital transactions is a cruel joke. No wonder this wonderful idea of Mr. Modi has already collapsed . I hope Mr. Modi is not contemplating to bring a law to ban  use of cash transactions and impose jail term on those who break this rule.

 7.Post demonetization banks are flushed with funds. They are still in a state of shock. What is troubling them is the question of how will they pay the huge interest on parked funds. Already the economy has slowed down and there are no takers for loans. They are already strapped with NPA amounting to 6 lakhs crores. They will have to drastically reduce the interest rates on fixed deposits effecting millions of pensioners and senior citizens who depend on interest earnings to run their households. The recent announcement by Mr. Modi to fix 8% interest for 10 years (without provision for premature withdrawal and upto maximum 7.5 lakhs) to this section of population is a joke. With inflation on the rise what will be the value of the return in coming years? Mr. Modi is talking about reduced rates of interest on loans as if people are flocking to banks to avail them. The unemployment figures are rising and those in service are finding it hard to run households so where is the demand for loans. The only section who are always eager to avail loans are the industrialist and the corporate giants because they have no intention of returning it . These are the people who invested crores of rupees in Modi campaigns during election. Now Mr. Modi has returned the favor by replenishing banks which were rather empty to again create the next cycle of NPA. So here also demonetization has hit the poor and helped the rich to become richer and then like Mallya scoot away.

 8. One thing is rather mysterious about this demonetization which Mr. Modi thrust upon the nation bringing with it misfortune and devastation in the lives of millions of poor people of this country. Who took the decision? Usually it is the RBI which is the competent authority in such matters. However when Mr. Modi announced this decision on 8th on November he did not mention that RBI recommended it. Surprisingly the RBI Governor Mr. Patel just disappeared from the scene. He was no where to be found. There is also no indication that Mr. Jaitley the FM of this country was in the loop or either the Chief Economic Adviser to the GOI. Certain indications are there that a high level RSS intellectual group(So called) secretly planned this step and fed it to Mr. Modi who as a obedient RSS follower implemented it. No economic expert was ever consulted. RSS is best known to have expertise in engineering riots and consist of hard headed dumb robots with a single minded purpose of imposing its extreme views on the masses. Obviously Mr. Modi committed a blunder. In any case it is doubtful whether it was legally valid step. Petitions have been filed in the Supreme Court challenging the validity of demonetization.

Now looking at post demonetization scenario we realise how it wrecked the country. It has not achieved any useful purpose but only brought destruction to the people and the country.

 

ASHOK KUMAR