D – Demonetisation #AtoZChallenge #BlogchatterA2Z
If this topic interests you – please spend some time on a more elaborate post on Demonetisation that I wrote ten days after it was announced on November 8th, 2016.
Why I want to discuss it because I believe since emergency in 1975 this was one such move where each citizen of the country was taken-for-granted. It deeply disturbed me, what is even disturbing is the silence of the educated class that understands the perils of such moves. They are just for political gains. Even the economists who support the ideology of the current party in power agreed to the fact that the GST implementation was in haste leave alone the execution of demonetisation.
We now have proof that demonetisation was implemented like a joke. Just to create a furor of slogans stirring the sentiments of nationalism with no end result. Has anyone noticed that there is no mention of it in the political rallies this election season – it’s like the Gujarat model, which even Gujarat is not talking about.Demonetisation was declared with these major objectives:
Curbing black money
Niti Aayog member and senior economist Bibek Debroy had said, “approximately Rs 1.6 lakh crore – 10% of the demonetised currency – would be extinguished and not come back into the system.”
The fact of the matter is as per the RBI report released in August 2018 that 99.3% of the demonetised currency or roughly Rs 15.31 lakh crore was returned and back into the system. The finance minister keeps stating that they are looking into the accounts and going after the culprits. How many people did you see going to jail on black money? Frankly, there is no data, yet, released that can give a suggestive account of the amount of Black money currently in the system.
There is again no data released that out of the total currency that returned to the system how much of it was counterfeit currency. But there is definitely data available suggesting a sudden spike in counterfeit Rs. 50 and Rs. 100 notes. The Rs. 50 counterfeit note has grown by a whopping 130%. So what now, are they going to demonetize these all as well?
After my father expired in 2017, I have been visiting government offices and courts on a weekly basis for some work or the other. The system stands as it was in the pre-demonetization era. Corruption is as rampant as it was; the only difference being the thinner Rs. 2000 has replaced the thicker Rs. 1000 in bribes.
The election rallies are in full swing. Do you know that the ruling party has booked about 60% of the charters and helicopters? There are a plethora new five star offices being unveiled – about 51 of them will be inaugurated in UP alone. Are you sure all this is done with white money and no corruption?
But nobody dares to question the government.
Terrorism and its funding
Between 2014 and 2018, the number of civilians killed in Jammu & Kashmir has risen by 35.71%; the number of security persons killed has increased by 93%, and the number of terrorists killed has seen a rise of 133.63%. In Naxal-affected states, terror incidents are down 45% but the number of security personnel killed is up a massive 82%, according to data from the South Asia Terrorism Portal or SATP.
Do I need to present more data on how terror is still on the rise?
The government kept on changing ‘goal-posts’ after goal posts citing as objectives of demonetisation. One of them which was never mentioned in the speech of November 8, 2016, was ‘Cashless economy.’
Cash in circulation (CIC) has jumped by 19.14 percent to a record high of Rs 21.41 lakh crore as on March 15, 2019 from the pre-demonetisation level of Rs 17.97 lakh crore on November 4, 2016, indicating that cash is back in the reckoning in the financial system. To their credit the cashless transactions are on a rise too but honestly, the figures reveal that it has less to do with demonetisation. In fact, if you force everyone to use a single medium for transactions then the data related to that is not giving a clear picture.
The illiteracy of the banking officials on digital payments front has been beautifully summarized by BP Kanungo, deputy governor of the Reserve Bank of India (RBI). On Tuesday (May 29, 2018) in Mumbai he said, “…(There is) lack of consumer awareness not just on the various payment options and features available, but even on the grievance redressal mechanisms available. This illiteracy transcends all geographies and regions, not just rural or semi-urban, north or south, and is equally true of the staff at the front desks of bank branches.”
How much did it cost:
The RBI spent close to Rs 13,000 crore over the next two years to remonetize Indian money market in post-demonetisation phase.
According to the Centre for Monitoring Indian Economy (CMIE), demonetisation caused loss of about 15 lakh jobs with an immediate GDP fall of around 1.5% that cost another Rs 2 lakh crore to the system.
Ironically RBI wasn’t able to count the returned currency for nearly two years. In fact, there is a shocking report that suggests that RBI doesn’t know how much money was put back into the system.
Please don’t forget the losses of more than 100 lives that it took, the loss of two RBI governors and one ‘confidante’ economic advisor and the loss of credibility in banking system cause of this futile exercise
Touted as one of the greatest financial moves ever – Something that was talked about as a Masterstroke turned out to be a ‘Hit-Wicket’.
For all those who love cash,
For all those who stood in those ATM queues,
For all those who have lost faith in banks,
For all those who think it was for political gains…
It’s not a goodbye,
But it’s a GOOD BYE.
See you tomorrow with another issue related to the upcoming elections.
Manas ‘Sameer’ Mukul
This is the 4th post for the #AtoZChallenge #BlogchatterA2Z. My theme in Politics Category is ‘IPL – Indian Parliamentary League’, where I would be covering some relevant issues with the General Elections 2019 through the course of 26 posts.
D – Demonetisation
Read the previous post here
Please do visit tomorrow for the next post with letter ‘E’
I am also taking part in the #AtoZChallenge #BlogchatterA2Z using another theme –‘Dubai – City of Gold‘. If you love travel head over to the Travel Theme and share your feedback.