Narendra Modi's deadline
of 50 days for the restoration
of normalcy in the supply of currency notes is over. What is not over is people's continuing sufferings. The level of tolerance shown by people has no parallel anywhere in the world. Modi is lucky that he has not yet faced spontaneous rebellion despite anarchy in ordinary people’s everyday lives. The situation is as yet far below normal and nobody knows how long people will suffer.
The informal sector of the economy has been badly hurt and farmers used to keep money in hard cash for the purchase of seeds, fertilisers etc. are now forced to take these things on credit from dealers, and thus they have to pay higher prices. Even eminent publishers are going slow in their business owing to cash shortage. When a person asks for Rs 4000 he is given two 2000 rupee notes. The present writer, along with innumerable others, has had to face such black humour. It may be recalled, with some amusement of course, that before becoming the Prime Minister, Modi had promised that he would bring back the money illegally kept in foreign banks within three months and would deposit Rs 1.5 million in every bank account held by the people. Talks like these have long ceased to be heard, although the list of big depositors in foreign banks is there with the Government of India. The fact that Modi is unwilling even to publish their names shows that the pre-poll promise was nothing but a gigantic fraud. In passing, it may be mentioned that according to the submission of the CBI before the Supreme Court in 2011, the black money held by Indians in different foreign banks amounted to 500 billion US dollars which, at the current rate of exchange, would be more than 33 trillions of rupees. Now Modi, sensing the growing popular resentment in reaction to demonetisation, has let out shrill cries, accusing his critics of defending black moneybags or even holding black money themselves. He has probably no other option, because his acolytes are powerless to reply to the criticisms made by Professor Amartya Sen or Prabhat Pattanaik or other eminent economists.
Habitually, the task of unearthing black money, forged notes and other fraudulently acquired assets lies with the Income-tax Department and the Enforcement Directorate. The way Modi has been shouting and highlighting the efficay of demonetisation in punishing black moneybags suggests that these organs of the state remained completely passive for a long time. Recent reports of unearthing of large amounts of black money in new notes by these two organisations vindicates this suggestion. Why couldn't Modi activate them earlier instead of withdrawing cash notes from circulation and causing harassment to the people? This question has been raised, but Modi has preferred silence. He has no answer.
About the subject of fighting corruption, the people should be reminded that the outstanding loans taken by only the first ten debtors, namely the Reliance Group, the Vedanta Group, the ESSAR group, the Adani Group, the Jaypi Group, the JSW group, the GMR group,the Lasko group, the Videocon Group and the GVK group, total more than 7.3 trillions of rupees. Nobody knows how much of this colossal amount will actually be refunded and probably the larger part of it will not. Recently, the State Bank of India has waived Rs 70.16 billions of debts owed by deliberate defaulters on the ground that they are non-collectable. The list of these debtors includes Vijay Mallya, whose Kingfisher Airlines was granted a sum of Rs 10.21 billions in the form of waived loans. Vijay Mallya, whose total debts are several times this amount has now fled the country and the Modi government has shown no serious intention of bringing him back to the country.
Now the point is: how much black money is really there in the country in the form of cash notes? Given that Rs 12 trillions of rupees have already returned to the banks, and another one trillion is expected to come before the deadline—they constitute together about 90 percent of demonetised notes—it is unlikely that the amount of non-returned currency will exceed Rs one trillion. Compare this with the amount of black money held in foreign banks. Again, not all of this money necessarily lies in the 'black economy' the money value of which, according to one expert, is in excess of Rs 35 trillions. Thus hardly 2% of the black economy would be touched, while the large defaulters on bank loans, who are ruining the country and the people, would remain unscathed.
Some other points should be examined. Take that of forged notes. This problem was always there in this country as elsewhere. According to the government's own statistics, forged notes constitute only 0.02% of the currency in circulation. And barely one week after the issue of official 2000 rupee notes, forged 2000 rupee notes also reportedly entered the market. Has demonetisation been able to prevent it?
Shortly after demonetisation, the government claimed that Pakistan, in order to aid terrorists, was printing counterfeit notes. If the allegation is correct, how long would it take Pakistan to forge 2000-rupee notes? Where the 'surgical strike', highlighted with so much fanfare by Modi's men, has failed, will demonetisation succeed? The truth is that the people are made to swallow the bitter pill of demonetisation in the name of 'patriotism'.
Another claim, sickening in its stupidity and also mendacity, was that Kashmiri youths were given 500 rupees each to attack the Indian security forces. What a strange defence of demmoneti-sation to suggest that young men would take the risk of being exposed to the bullets of the security forces just for Rs 500 each? Only a fool could think that all the troubles in Kashmir would end with demonetisation.
Having said all these, it is necessary to say a little on the hidden agenda of demonetisation. The trillions of rupees that have returned to the public sector banks, which are already sucked dry by the defaulting large corporates, would inject some liquidity into the banking system, and it could be used afresh for serving the needs of the corporates, i.e. for lending this money to them on more favourable terms. This represents an economic emergency and, coupled with the proposed amendments to the land acquisition act and new labour reforms, it is preparing the ground for fascism. The attempt at forcing a digital economy down the throats of common people used traditionally to cash is patently a symtom of this fascism. The big corporate capitaists actively supported Narendra Modi in his election campaign and he must return the favour, making the entire economy serve their interests. But the real sufferings of the people cannot be wished away by fraudulent references to 'long-term gains' or 'drive against black money'.
Vol. 49, No.28, Jan 15 - 21, 2017