Demonetisation: Politics, Prejudice and Pain
India has been on an emotional roller-coaster ride, ever since Narendra Modi ‘on behalf of the honest’ launched a blitzkrieg against the black money and corruption on November 8, announcing that from midnight the high denomination notes Rs 500 and Rs 1000 would become illegal tenders.
People torn between support for the flushing out of black money, which is almost a parallel economy in India and the hardship they have been enduring because of disruption of daily life and the overall impact on economy, have by and large accepted the emotional appeal by the Prime Minister to give him 50 days to remedy the situation. That period ends on December 31.
The banning of Rs 500 and Rs 1000 notes meant withdrawal of 87 per cent (2203 crore notes of Rs 500 and Rs 1000) currency in circulation. Of this according to Deputy RBI Governor SS Mundhra Rs 12. 44 lakh crore of demonetised Rs 500 and Rs 1000 were deposited from November 8 until December 10. It is expected that there will be major rush to deposit before December end although the old notes can be deposited in RBI until March end.
But coming back to people’s sufferings and disruption in routine daily life, it was perceived by political leaders as a chink in Modi’s popularity and a crack in his support base. The likes of Mamta Banerjee, Arvind Kejriwal who have been eager to shine on the national stage, and of course Rahul Gandhi whose pass-time and hobby is to abuse and defame Modi saw an opportunity to perish Modi halfway through his term. All of them turned an economic measure into political handle to fix their common enemy. In fact, if wishes could dislodge Narendra Modi, he would have been back selling Chai.
Narendra Modi, however, regrets that his scheme to bring back hidden and hoarded money into the system and circulation was politicised just like VP Singh who said he was sorry that the Mandalisation was politicised and spawned caste leaders like Lalus and Mulayams. Modi’s demonetisation, however, spawned deadly political enemies, Mamtas, Kejriwals and Rahuls, apart from critics like Manmohan Singh and M. Chidambaram.
Mamta Didi promised that she will throw out Modi from politics even if it costs her life. Rather illogical, what’s the point if she is no more to see that Modi’s gone back to selling chai. But then for Didi, like the Leftists before her, theatrics are part of her political style. No clarification or discussion. This is the best way to keep the spotlight on oneself. This is what happened when her Party alleged that her life was in danger in the air and on the land. Despite full-proof rebuttal, she said a civil war situation was being created by Delhi.
In demonetisation, the street smart Didi saw an opportunity for launching herself on the national stage, especially because the opposition was fragmented and the Congress, despite Rahul Gandhi’s desperate attempt to be leader of anti-demonetisation movement, had no credibility.
She jetted to Delhi immediately asking that demonetisation be rolled back. Another politician whose theatrics almost matches Didi, the Chief Minister of Delhi, Arvind Kejriwal was so enamoured by her vituperative outbursts that he jumped on her bandwagon, hoping that he will, overnight, become a national level leader.
Kejriwal possibly believes in the principle enemy’s enemy is a friend, followed her footsteps and the two, according to reports jointly went round the capital but were disappointed to find that most people welcomed demonetisation. While Didi went back to her safe haven (Kolkata), Kejrwal, possibly worried about string of cases against him and some other inquiries, the outcome of which could be unsavoury decided to play safe. He said that if Modi succeeds in unearthing black money and ending corruption, he will himself say jai Modi. So he now stands on two stools.
An opinion poll by India Today and another independent agency revealed that almost 84 per cent were willing to suffer extreme deprivations so that hoarders, bribe takers, black – market racketeers are exposed. The attempt to broker an opposition unity against demonetisation could not take off, because be it Mamta, Kejriwal or Rahul Gandhi, all wanted to become the leader who worsted Modi.
In one-upmanship Rahul Gandhi at the fag-end of the winter session, declared that he had full-proof evidence of Modi’s personal corruption. But he would present it in the House only. But he failed to table the paper. His own party men nor any opposition leader had any inkling of what proof of corruption against Modi, he possessed. In fact Kejriwal urged him to reveal whatever he had. But instead he went to meet Modi, ostensibly to give him a petition to help farmers suffering from effects of demonetisation. It caused a rupture in the opposition unity for fighting against the demonetisation plan of Modi.
The reason of the failure of the opposition to arouse people standing for hours in front of banks or returning without any cash from ATMs is rather emotional than political. The deprived and the poor are supporting Modi because they find that the dishonest are in trouble.
A far-sighted politician Modi touched the aspirational Indian and the poor who believe that once the money is extracted out of the wealthy hoarders, bribe-takers and the corrupt, acche din will dawn. When one lady of about 60 was asked about the trouble she had to endure, she chuckled and said, ‘Yes, but my trauma will be over soon but the family I work for will weep for a long time. They lost over five crore. They were raided.’
This is the crux. Those who have declared under amnesty offer and even those who will be fined, all of them in future have to pay tax. This will give revenue which was unavailable so far.
Far from doing a monumental misappropriation or making a “mammoth tragedy”, which Manmohan Singh accused Modi of, in fact he is correcting the monumental mismanagement of the economy by the economist Dr. Singh. Dr Singh also said in his 10-minute speech that 72 hour notice should have been given for people to prepare for the ban. But Modi answered him without taking Dr Singh’s name that they wanted 72 hours to prepare themselves.
Singh is either suffering from amnesia or he has been given no option by 10, Janpath, one will remind him of what he said in 1991 when he was Finance Minister under PV Narasimha Rao. “There is no time to lose. Neither government nor the country live beyond its means year after year. The room for manoeuvre, to live on borrowed money, or time does not exist anymore.
“There can be no adjustment without pain. The people must be prepared for to make sacrifices to preserve our economic independence and restore the health of our economy—July 24, 1971”
What he preached 25 years ago Dr Singh possibly forgot under instructions from 10 Janpath. He has now nothing to lose, his credibility is hovering near the bottom.
Now, the other vociferous critic M. Chidambaram said, ‘Khoda Pahaad Nikli Chuhiya’. He further said that demonetisation has broken the back of poor people. It is a case – pardon my Hindi – ‘khoda pahaad, nikli chuhiya’ (much ado about nothing).
Forty-five crore people depend on daily wages. Of them, 15 crore are employed but the rest 30 are doing daily jobs – the milkman, the washerman, the farmers. They are the worst affected. In his speech on November 8, PM Modi mentioned black money 24 times. In a speech 15 days later, he mentioned cashless economy the same number of times and black money less.
Goal post is shifting, it is no longer about black money. Now they have found a new one called cashless economy. Which country has cashless economy? Does the US? Does Singapore have it? Where is electricity in this country? Where are the machines?
Demonetisation a thoughtless and absurd move, no one in the world has a good word for it. Every major economist or newspaper in the world has condemned it. Yesterday, a leading RSS spokesman said that Rs 2000 notes should also be withdrawn. I won’t be surprised if they do that. Just because people are not protesting in the manner you are suggesting does not mean they are condoning what the government is doing.
Modi’s Revenge, Dare if you can Rahul
Prime Minister Narendra Modi couldn’t speak in Parliament in the washed out winter session. But, an experienced strategist, he devised a way out to counter the charges made by the opposition, especially Rahul Gandhi.
He convened BJP parliamentary party meeting–and got his address to party MPs recorded by official government broadcaster DD News.
DD telecast Modi’s speech after both Houses of Parliament were adjourned sine die. His address was a devastating counter to Rahul Gandhi’s charges against him, each day a new one. By the time Modi’s address to his own party MPs — 282 from Lok Sabha and 55 from Rajya Sabha — could be telecast in the afternoon, thanks to Congress party’s strategy to go solo to give political mileage to Rahul Gandhi by personally petitioning the Prime Minister for farmer loan waiver, the brief opposition unity was tattered.
Modi used the opportunity to blast Congress, citing documented evidence since the time of Indira Gandhi and sending out the message that the main opposition party and its leaders were self-centred who gave more importance to the electoral survival of the party than the nation. This was, which Modi pointed out, was in contrast to BJP’s “nation first” stance.
Citing excerpts from former home secretary Madhav Godbole’s book Unfinished Innings: Recollections and Reflections of a Civil Servant, the Prime Minister said that demonetisation was the need of the hour in 1971 but Indira Gandhi with an eye on coming elections chose to take the populist path: “When YB Chavan told her (Indira) about the proposal for demonetisation and his view that it should be accepted and implemented forthwith, she asked only one question, “Chavanji, are no more elections to be fought by Congress?”” Chavan got the message and the recommendation was dumped.
Modi also referred to the Wanchoo committee report recommendations stressing on the need for demonetisation in 1971.
Indira Gandhi’s reference and her snub on demonetisation of high denomination currency notes were aimed to serve twin purposes — that Congress or more particularly her daughter-in-law and grandson and their new found allies were patently wrong in acting rough against Modi. Second, his comparisons with Indira Gandhi was to drive home the point that while she always had Congress’ electoral gains in mind before taking a decision Modi always have the guts to take bold and tough decisions for the country irrespective of electoral implications.
Modi didn’t spare other opposition parties either, which had lately aligned with Congress on the issue: “Disruption of parliamentary proceeds have been taking place earlier also but this time it was far too much. The difference between earlier occasions and winter session disruptions is that while earlier disruptions had taken place because some corruption cases had come up and some expose had happened. The opposition would unite to fight on the issue of integrity and honesty but this has happened for the first time that the treasury benches had taken steps to fight corruption and most in opposition had united to support the corrupt.”
“The political standards have fallen to such low level that some people dare to stand for the corrupt. This is a huge concern,” he said. In the same breathe he had a word of praise for Odisha Chief Minister Naveen Patnaik and Bihar Chief Minister Nitish Kumar who despite ideological differences with the BJP supported the demonetisation move. “Jyoti Basu had once favoured demonetisation. But today, see what the communists are doing,” Modi said, taking potshots at the CPM.
He talked of denigration of political standards for the second time where he referred to some parties including Congress, AAP and some other parties asking for proof of Indian Army’s surgical strike in Pakistan-Occupied-Kashmir(PoK). “Today is 16 December, India had made Pakistan surrender and Bangladesh was liberated. There was a robust opposition then but no one had then asked for evidence and when today Indian soldiers show valour then they ask for evidence. Falling standards in public life is a matter of grave concern,” Modi said.
Besides targeting his political rivals, the Prime Minister sought to psychologically prepare people of the nation to be ready to face some hardships beyond 50-day-period that he had initially asked for.
Demonetisation of Rs 500 and Rs 1,000 is an important milestone but not the end of it. If the exploitation of middle class has to end and rights of the poor have to be protected then corruption has to be eliminated.
“I have said this before, 50 days would be pinching and thereafter the problems would slowly ease. Nobody could have imagined the kind of success and popular support we have achieved,” he said. For him, this was a move to stop the exploitation of the middle class and protect rights of poor.
Modi hinted that his strike on Benami property could come soon. Demonetisation of Rs 500 and Rs 1,000 notes was an important milestone in the fight against corruption but not the end destination of it. Mark his words, “After all why we passed Benami property law. Now they will shout Modi has passed that law in haste. The question is why did you not implement it since 1988. Modi government has passed the law and will now implement it.” He anticipated that once that law is implemented, suggesting a possible crackdown of benami properties, then again opposition parties would cry hoarse.
His idea was now that winter session of Parliament has come to a close the MPs should go to their respective constituencies and talk about virtues of demonetisation and push for a digital economy.
From the ruling BJP perspective, the closing day of the washed out Winter Session had given them strong talking points — Modi had spoken what he wanted to speak, if not on floor of the House then at the parliamentary party meet in the Parliament House premises, got the rights of persons with disability bill passed and put Congress vice-president Rahul Gandhi in an awkward position for two reasons.
First, Rahul Gandhi’s failure to give evidence of what he had claimed earlier at a press conference. “Read my lips. The Prime Minister is personally terrified with the information that I have. I have information on the personal corruption of (the) Prime Minister.” Second, Rahul Gandhi’s own act to take mileage by taking a Congress delegation to Modi seeking loan waivers for farmers almost instantaneously broke opposition unity ranks. NCP’s Prafulla Patel and CPM’s Sitaram Yechuri publicly expressed their displeasure over Rahul’s move and disassociated with the Congress-led opposition march to the President House. Besides, NCP and Left, SP, BSP and DMK which had earlier sided with Congress inside both Houses of Parliament too chose to stay away from Sonia Gandhi and Rahul Gandhi-led march to Rashtrapati Bhawan.
Congress was left only with TMC and RJD. While Trinamool Congress is desperate to find support from any quarter for Mamta Banerjee’s protest against demonetisation and RJD chief Lalu Prasad Yadav is eyeing longer run association with Congress should Nitish Kumar dump RJD and go for a fresh political realignment in times to come.
The problem for Congress is that it can’t take on Modi government for Prime Minister’s speech broadcast by DD News. The Congress had set a new precedent in 2004 when Congress parliamentary party meeting at Central Hall of Parliament, emotional outpourings for Sonia Gandhi when she had nominated Manmohan Singh to be Prime Minister in May 2004 was broadcast live.
The pain that rural India is facing is indescribable. It is worse than what a natural calamity would do. It is an illusion that it is intended to hurt the rich and benefit poor. I don’t see any rich man getting affected.’ The outburst seemed to be from a frustrated person rather than a former finance minister who should have devoted himself to get at the root of scams which were in the last few years surfacing with irritating regularity. Or was there any reason for ignoring them?
As for nikli chuhiya jibe, does Mr Chidambaram consider 12.42 lakh crore deposited in banks until December 10 to be as small and insignificant as a small mice? May be he has seen more money stashed and taken off from circulation. No one disputes the trauma of disruption in daily life but two months or a bit more can lead within our life time a more equitable distribution of money, eradication of corruption, lowering of prices and end of insurgency, so we should not grumble. There is peace in Kashmir because stone throwers were paid with a Rs 500 note, those who could snatch or steal arms and grenades were given Rs 1000 notes, all banned now.
Trafficking of women and children from Jharkhand and Assam and Bengal and other places has stopped as all transactions used to be in cash. Property values have fallen, smugglers are struggling.
The demonetisation drive aims to cleanse the ills of neoliberalism, Dr Rakesh Sinha, of Delhi University rightly pointed out. He calls demonetisation the first economic satyagraha and adds that black money took off with the neoliberal turn to the Indian economy in 1991. Neoliberalism, a version of the 19th century politico-economic philosophy of laissez faire, enhances the wealth of a few and makes the majority subservient to the market, while making the state an executive of big business and capital. Common people are impacted both by inequality and black money. Even vital minimum needs like health, education and housing become an end in themselves.
He supports demonetisation saying that it should be the beginning of a revision intended to humanise the market and legalise hidden assets.
Its good that Modi is pushing on. The positives are already showing. As the Indian song goes, “Kuch to log kahenge, logon ka kaam hain kahena’, the Singhs, Rahuls, Mamtas are psyched to oppose, as they have been reduced to nobodys.
So long masses are for demonetisation, Narendra Modi has nothing to fret. Uday India has learnt that once normalcy returns, the surplus will enable the government to pay Rs10000 to each bank account holders. That would give political bonus in 2019.
by Vijay Dutt