Narendra Modi’s decision to ban 500 and 1000 rupee notes is the boldest move by a Prime Minster in recent times. India is stunned. We are being told that the problem or corruption and black money has been solved in one masterstroke by a government that failed to get the fabled 15 lakhs into our accounts, failed to expose those who stashed money in tax havens, failed to name those who have defaulted on loans.
BJP workers and the saffron party’s cheerleaders in media, particularly TV channels, are singing hosannas and many celebrities, especially those from weak-kneed movie industry, are loudly joining the chorus.
Almost everyone agrees that India needs to get rid of higher denomination notes to:
a. end black money
b. end cash economy (which is not necessarily black)
c. deal with fake currency.
So will it? Will the gambado that staggered the nation really end black money? No.
Have a look at wealth distribution in India – the top 30% own 90% of India’s wealth. These people aren’t exactly sitting with cash piled up under their beds. They have invested their black money in jewelry, property, tax havens and a number of safety nets.
None of this is coming back into the tax paying economy unless you jail these racketeers but our governments don’t even reveal their names, forget act against them. Even the spare change they have lying around, most of these super rich would rather burn than explain.
The bottom 70% are the ones who don’t have black money, but yes they are the ones who are part of the cash economy. They get their pitiful earning in cash, they borrow cash, they save cash if they can, they spend cash. These are the people who are going to be hardest hit.
As we speak, farmers in Maharashtra are being tricked – they are being told that 500 and 1000 rupee notes are scrapped. They are being offered 50 and 100 rupee notes for them. Comprehend? One 100 rupee note for one 1000 rupee note! Even if you ignore how blindly these poor people are going to be cheated and pat yourself for getting their money into the bank, remember it’s not even 10% of the total wealth.
Really unromantic of me isn’t it, liberal pacifist that I am, (these are slurs in India today) to keep harping about these poor folks. Like they matter.
Leave the top 10% out as nothing affects them. Let’s address the next 20% who are doing all the chest thumping right now. 14 lakh crore or $217 billion, that’s 86% of the value of Indian currency currently in circulation, has become useless.
Imagine the strain on the economy to replace 86% currency. Yet we would all stoically bear the stress of this transition if the notes were going to be done for, for good. But no. Now we will have 2000 rupee notes in circulation, twice the ease of moving cash around.
While we scrape whatever little cash we have and deposit it in banks, the super rich will make huge withdrawals soon, they know how to gold plate expenses and push it back into their dark world.
Just a matter of time by which they put us back on the merry-go-round again. Other news for this educated, Modi loving elite is that on the short term stock markets will be volatile. Gold and property costs will spiral. In the long term, cost of labour which we so cheaply enjoy will go up. Small traders and hawkers who will get hit in the next few cash trapped weeks will get wiped out, which will in turn add to inflation.
Which brings us to the point – why? Why did Modi do this?
Last two and half years have totally eroded Modi’s credibility. He has failed to deliver on a single poll promise – from One Rank One Pension for the Armed Forces to bringing black money back from Swiss Banks. He is now seen as divisive, petty, vindictive person whose designer clothes and teleprompted, election style, speeches are being met with contempt. He badly needed a divertissement.
He first tried Surgical Strikes but pathetic attempts to steal credit soured the glamour. His cronies probably advised him to change the discourse and he put all his credibility at risk in this foolhardy venture. However, this may well turn out to be his worst nightmare which will cost him dear.
Problem is it will cost the country dearer. This decision is as ill advised, intemperate and unwarranted as Sanjay Gandhi’s forcible sterilization program – only it’s much larger. It has brought us to the brink of precipice and only time will tell if we plunge to our death or survive this gamble.
(The author is an AAP spokesperson. The views expressed here are solely the author’s own. The facts and opinions appearing in the article do not reflect the views of Janta Ka Reporter and Janta Ka Reporter does not assume any responsibility or liability for the same)
