A river of words has flowed on the intent and impact of the BJP/NDA government’s November 8 decision to demonetise Rs.1,000 and Rs.500 currency notes with effect from the end of that day. With this executive fiat, 86 percent of liquid cash was sucked out of the Indian economy. However given that these currency notes on the face thereof, contain a promise by the governor of the Reserve Bank of India and guarantee of the Central government to pay the holder the sum inscribed thereon, provision should have been made to pay legitimate holders of the invalidated notes a sum equivalent by way of new paper money on demand. But, the RBI and BJP/NDA government have substantially failed to honour this promise. According to all reports, only 10 percent of the new notes required to replace the demonetised currency of the value of Rs.14.18 lakh crore have been printed by November 25.
The lack of preparation for this hammer blow imposed on cash-dependent citizens who are the majority, raises grave doubts about the purpose of this imperious diktat. The official version is that at one stroke, it has invalidated large cash hoards of tax evaders, corrupt government officials, terrorists as also counterfeit Rs.1,000 and Rs.500 notes in circulation. The government’s underlying presumption is that the only option available to anti-socials is to deposit or exchange demonetised currency notes in their possession at banks, which would expose them to scrutiny of presumed-to-be honest and efficient tax officials. This reasoning is flawed because it assumes that the targeted anti-socials hoard their ill-gotten wealth by way of currency notes in brimming rooms and warehouses. It fails to distinguish between the stock and flow of black money.
The plain truth is that big fish anti-socials quickly invest ill-gotten wealth in assets such as land, buildings, precious jewellery or in foreign currencies held in offshore accounts. Therefore the majority of holders of the invalidated Rs.1,000 and Rs.500 currency notes are inevitably small-fry citizens, farmers and small-scale businessmen obliged to keep cash to pay off venal government officials, and the vast number of the country’s illiterate and/or ill-educated citizens with cash savings to meet marriage, medical emergency and daily purchases. These citizens have had to stand in queues for long hours to exchange old for new notes. This is why the demonetisation of 1978 didn’t work. On the contrary, corruption and tax evasion multiplied manifold in its wake.
Corrupt businessmen, terrorists and counterfeiters apart, there is one genus which needs vast stockpiles of currency to distribute among vote bank managers and the electorate: political parties. With the Punjab and UP state elections scheduled within the next few months, the conclusion that opposition political parties are the prime targets of the BJP government’s demonetisation initiative, is inescapable. The tragedy is that the poorest and most vulnerable — and gullible — citizens will have to pay a heavy price for this cynical manoeuvre.
Time to Stand up for Liberal Values
The upset victory of real estate tycoon Donald Trump in the year-long campaign for the presidency of the United States of America — the world’s economically and militarily most powerful nation — presages a turbulent four-year period for the world. Trump’s unexpected triumph in the race to the White House and customary obeisance to the innate wisdom of the people in free democracies should not obfuscate the reality that America’s president-elect is a racist, bigot, misogynist and xenophobe. His administration is certain to hinder, if not reverse, progress towards free international trade in goods and services, the spread of democratic, egalitarian ideals and attainment of peace, harmony and gender equality among people of all races and nations as enshrined in the charter of the United Nations.
Indeed, America’s 45th presidential election in which the electorate of the world’s showpiece democracy elected this patently unqualified demagogue with no previous experience of government and a questionable record of business ethics, as President, exposes its several inadequacies and infirmities. For one, it’s much proclaimed education system is evidently not quite as good as it is believed to be. If it was, how could over half the population deliberately vote in favour of an individual who brazenly labels the country’s Mexican and Latino population as drug runners and rapists, brands all Muslims terrorists, publicly admits to groping women and fails to maintain the ordinary courtesies and norms of civil public debate?
Unfortunately, there’s a discernible regression in the Western world towards isolationism driven by an ignoble greed to preserve global wealth inequalities and advantages accumulated during the past three centuries since the industrial revolution. Fearful of the rise and progress of emerging nations of the third world, sizeable proportions of westerners who failed to sufficiently invest in their education and skills development, are increasingly reposing faith in under-qualified rabble-rousers such as Trump, to turn back the tide of history and stop progress towards emergence of a fair, just and equitable new world order.
Meanwhile, it’s pertinent to note that right-thinking people and liberals in the US haven’t thrown in the towel. The backlash against Donald Trump’s elevation to the White House is substantial and vigorous. This is an era of uncertainty for the global economy and ecology with the rise of racism, religious intolerance, and xenophobia in countries around the world, India not excluded. In this era of darkness, fair-minded liberals should stand firm and disregard the advice of muddled media pundits such as author-writer Chetan Bhagat who advises politicians and intellectuals to learn to “listen to the people” (Times of India, November 13). The proper role of politicians and public intellectuals is to guide the people towards building prosperous and harmonious nations, not to pander to their basest instincts.