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Demonetisation anniversary highlights: Congress observes black day; Rahul Gandhi calls note ban a 'tragedy'

Demonetisation anniversary is turning out to be fierce war of words between the Opposition parties and the ruling NDA

FP Staff November 08, 2017 16:20:19 IST
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Demonetisation anniversary highlights: Congress observes black day; Rahul Gandhi calls note ban a 'tragedy'

Highlights

15:21 (ist)

Demonetisation was 'hasty and immature decision': Mayawati

Mayawati lashed out at Prime Minister Narendra Modi, saying the "hasty and immature" decision had hurt millions of poor in the country "very dearly".

In a statement, the former Uttar Pradesh chief minister said the scrapping of Rs 500 and Rs 1,000 notes on 8 November last year had put the common man in huge discomfort and added that people were still reeling from the aftermath of demonetisation.

13:20 (ist)

Coming soon, a book in memory of those who lost their lives in queues


'Note-Bandi: Demonetisation and India's Elusive Chase for Black Money' is an upcoming book from Oxford University Press dedicated to the "memory of Indian citizens who lost their lives due to demonetisation", IANS reported.


Excerpts from the preface by R Ramakumar.

'Demonetisation'— the withdrawal of legal tender status of notes of denomination Rs 500 and Rs 1,000 -- announced by India's Prime Minister Narendra Modi over a televised address on 8 November 2016 will go down in history as one of the most reactionary and illogical economic policies ever attempted in independent India. 


It crippled an economy that ran on cash and was plagued by a slowdown; it destroyed the livelihoods of millions of farmers, workers, traders, women and the elderly; and it violated the dignity and liberty of law-abiding citizens. 


Yet, in a post-truth world, demonetisation also left public opinion in India deeply polarised. The language of the state had a deceptive appeal. In a society marked by abject poverty and inequality, and where everyday lives of citizens are marred by myriad forms of corruption, it came as no surprise that Modi's misadventure was received as a decisive measure.

13:18 (ist)

Narendra Modi govt needs to introspect where it went wrong

What we have is a situation that an everyman's psychologist would describe as the government being in a state of eloquent denial being converted into brazen politics. There is, however, room to believe that the commoner on the street has even to this day bought into Modi's call for a goldmine beyond the short-term sufferings. Remember that BJP swept comfortably to power in the nation's most populous state, Uttar Pradesh. 

It would be better to look beyond the cop-and-robber chase and political bluster to see where the government actually might have gone wrong. At the heart of it all is a sort of cultural illiteracy that the BJP-led NDA has shown in dealing with the details of a mammoth, risky drive . That can apply to the goods and services tax (GST) as well, but that is another story.

12:58 (ist)

RBI emerges as one of the most opaque govt institutions

In the last one year, the Reserve Bank of India has emerged as one the most opaque institutions in the country. The central bank, whose primary duty is to safeguard the interests of the common man, has stonewalled many an RTI query regarding the note ban.

It has to be remembered that the country’s central bank remained silent in the initial days of the ban when the citizens had a harrowing time with cash crunch at banks and ATMs coupled with long queues that also resulted in a few deaths. Not only did the bank stop giving regular updates early on, it tweaked the rules regarding cash withdrawal and deposit every now and then, compounding the problems of the people.

To an RTI query on why the decision was taken, it refused to give a reply Section 8(1)(a) of the Right to Information Act. This section allows a government institution to withhold “Information, [the] disclosure of which would prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign state or lead to incitement of an offence.”

This prompted Shailesh Gandhi, former information commissioner of the country, to file a complaint against the RBI with the Central Information Commissioner. 

"This is sheer arrogance on the part of the RBI," Gandhi told Firstpost in an interview. The central bank has refused to give many important details to the public citing some or other reason - something a democratic institution should never do.

12:15 (ist)

Did demonetisation move just widen the rich-poor divide in India?


One of the biggest problem that India is facing is the increasing inequality. And it is likely that the demonetisation of Rs 500 and Rs 1,000 last year just heightened the problem.


This is what former prime minister Manmohan Singh told
Bloomberg Quint in an interview: "I also worry about the longer term impact of demonetisation. Headline GDP may well start to show an improvement after the recent lows. But rising inequality has been a constant threat to our nature of economic development. Demonetisation may exacerbate such inequalities which can be harder to rectify in the future. In such a diverse country such as ours, inequality can prove to be a far greater social malaise than in other homogeneous nations."

Earlier, Singh's analyses about the impact of demonetisation has come true. He had earlier said that the GDP would fall 2 percent. The number for April-June shows that the fall in growth may, in fact, be much worse.


And in this case too, Singh's fears are likely to come true. The reason is that even after one year, there has not been any let up in the jobs scenario. As long as the informal sector continues to be in shatters, one cannot expect any improvement on this front.


This will indeed have a direct impact on the financial situation of the lower strata of the society.

12:13 (ist)

Did Narendra Modi think that black money is a stash that can be raided?


Year on, the question that still haunts the common man is: why did Prime Minister Narendra Modi take the step?

There has not been a clear answer to the question on why the ban was imposed. There were certain objectives the prime minister explained in the speech on 8 November, 2016. However, the narrative kept changing. From curbing black money, corruption and terror funding, the objective later changed to digitisation of the economy.

So what exactly was the reason? The government seems to be as clueless as the common man.


Noted economist Jean Dreze has an explanation for this. "Today, my hunch is that he meant what he said on 8 November last year. He really believed in the myth that black money is a gigantic hoard of cash, waiting to be raided," Dreze said in an email interaction with Firstpost.

11:50 (ist)

Did Narendra Modi think that black money is a stash that can be raided?


Year on, the question that still haunts the common man is: why did Prime Minister Narendra Modi take the step?

There has not been a clear answer to the question on why the ban was imposed. There were certain objectives the prime minister explained in the speech on 8 November, 2016. However, the narrative kept changing. From curbing black money, corruption and terror funding, the objective later changed to digitisation of the economy.

So what exactly was the reason? The government seems to be as clueless as the common man.


Noted economist Jean Dreze has an explanation for this. "Today, my hunch is that he meant what he said on 8 November last year. He really believed in the myth that black money is a gigantic hoard of cash, waiting to be raided," Dreze said in an email interaction with Firstpost.

11:19 (ist)

China is not India, says Rahul Gandhi

On demonetisation anniversary, Congress vice-president Rahul Gandhi wrote a searing oped in Financial TimesThe article criticised note ban and Prime Minister Narendra Modi's political and economic policies.

Here are a few excerpts from the article:

  • One year ago Narendra Modi bypassed the Reserve Bank of India, locked his cabinet in a room and gave the country just four hours notice before announcing his arbitrary and unilateral demonetisation scheme. Overnight 86 per cent of the value of India’s currency was withdrawn from circulation.
  • Demonetisation has wiped out 2 per cent of India’s gross domestic product, destroyed the informal labour sector and has wiped out many small and medium businesses. It has ruined the lives of millions of hard-working Indians. The Centre for Monitoring Indian Economy has calculated that over 1.5m people lost their jobs in the first four months of 2017 due to demonetisation.
  • The rise of democratically elected autocrats, such as Mr Modi, is driven by two factors: a massive increase in connectivity and its profound impact on institutions; and, second, China’s dominance of the global job market.
  • This advantage comes with a brutal cost — China’s people are not free to speak, to dissent or to question and those that do are swiftly and severely punished. This is not a model India should emulate.
     
     
10:13 (ist)

'Idea that illicit earnings are stashed away in an accumulating hoard is a source of endless confusion'

Jean Dreze told Firstpost that he questioned the real objective behind demonetisation. 

"Various hypotheses have been put forward. None of them really explain why the prime minister would want to take this sort of risk with the economy. Today, my hunch is that he meant what he said on 8 November last year. He really believed in the myth that black money is a gigantic hoard of cash, waiting to be raided."


"In economics, black money essentially refers to illicit earnings. That is a flow, not a stock. Illicit earnings do not stay still and accumulate, like a hoard. They are used to buy Jaguars, shop in Dubai, fund lavish weddings and so on. In the process, black money gets laundered, so to speak. The wrong idea that illicit earnings are stashed away in an accumulating hoard is a source of endless confusion. At any particular point of time, of course, some black money is held in cash. But launching a one-off strike on that cash residual does very little to stem the flow of illicit earnings. It’s like a swipe of the mop under the running tap."

10:07 (ist)

The objectives outlined by Modi in his speech of 8 November, 2016 have certainly not been met: Jean Dreze

Development economist Jean Dreze had famously warned that "demonetisation in a booming economy is like shooting at the tyres of a racing car". A year on, it seems his caution has come true. In the first quarter of the current financial year, the GDP growth slowed to a three-year low of 5.7 percent due to twin effect of goods services tax and note ban.

Firstpost did an email interview with Dreze. Here are the excerpts:

FP: It’s been a year since demonetisation. Do you see it as a success or as a failure?

Dreze: I think that it is best to be frank about demonetisation and admit that it was a goof-up. The objectives outlined by the prime minister in his speech of 8 November 2016 have certainly not been met. If there were other objectives, let him spell them out. Otherwise, let him accept that it was a blunder.

09:49 (ist)

Were the inconveniences worth it in the fight against black money?

In coming to terms with the fact that the announcement made 86.4 percent of Indian currency worthless, one of the queries posed to respondents was related to whether they felt the hardships they were suffering were worth it in the battle against black money. This was the second question to be put forward to respondents across 23 states and over 400 Lok Sabha constituencies over the process of six waves.

09:47 (ist)

How much of a problem was the ban on Rs 500 and Rs 1,000 notes?

This is the first in a series of five big questions asked after the announcement of demonetisation on 8 November, 2016. C-Voter conducted opinion polls over the course of six waves in order to map out the trajectory of opinions over time. Here is the first set of findings of the C-Voter Tracking Poll on Demonetisation.

08:34 (ist)

Why demonetisation was a political move rather than an economic reform

A year on, as the economy still grapples with the negative impacts of the demonetisation of Rs 500 and Rs 1,000 notes, one thing is becoming loud and clear: it was a political move not an economic reform.

As this Firstpost article notes, it did definitely give political dividends for Prime Minister Narendra Modi and the BJP. 

"This was Modi's biggest political gamble ever since he came to power at the Centre in 2014. Modi sold demonetisation as the big war of poor on the undeserving rich in the society. Rallies after rallies, Modi called upon the middle class and the poor to suffer pain to achieve the larger objective of a cleaner, transparent society," he says.

It has to be remembered that there is no sufficient data made available in the public domain to do an economic analysis.

It is not even clear why the government took a decision to ban the high value notes. Was there any evidence of an increase in terror funding using fake currency? Was there a sudden surge in generation of black money? 

As long as the authorities - the RBI and various government departments - continue to stonewall all the RTI applications, demonetization will continue to be the most politically-motivated economic decision.

07:53 (ist)

A timeline of Narendra Modi's grand Indian currency show

On 8 November 2016, Prime Minister Narendra Modi announced the biggest-ever demonetisation exercise India has ever seen by abruptly withdrawing Rs 500 and Rs 1,000 notes from public use in a bid to clamp down on black money, fake currency menace, terror funding and corruption.

Modi said there are certain exemptions for the first 72 hours, including permission to use old currency in government hospitals, for buying fuel, medicines, train tickets, airline tickets, in government buses and for paying utility bills.

Exchange of notes were initially allowed up to Rs 4,000 while cash withdrawal at ATMs was capped at Rs 2,000 per card per day and withdrawal at banks were allowed with a limit of Rs 10,000 per day and Rs 20,000 per week. Since then, rules have changed many times.

Read the full story here

LIVE NEWS and UPDATES

Nov 08, 2017 - 14:32 (IST)

Watch: Experts discuss one year of demonetisation - An economic blunder or bold reform?

Nov 08, 2017 - 17:03 (IST)

Demonetised notes find way into temples

Scrapped Rs 500 and Rs 1,000 notes continue to find their way into donation boxes at some temples in Odisha. Unable to dump their old currency notes, devotees are dropping the demonetised notes in donation boxes at Jagannath Temple in Puri and Lingaraja Temple in Bhubaneswar.

The deadline for exchange of demonetised notes expired on December 30 last year. Now, the temple trustees are worried about how to encash the devalued denominations. - IANS

Nov 08, 2017 - 17:00 (IST)

Better implementation could have minimised people's suffering

The Government could have minimised the suffering with better planning. At the Initial stage, BSF/CRPF/Police vehicles could have been used to transfer funds to far flung location instead of depending only on bank approved security vehicles. Also, RBI should have alerted government about incompatibility of ATMs with new notes and time taken for re-calibration. - By R Vaidyanathan

Read full article here

Nov 08, 2017 - 16:52 (IST)

Jayant Sinha challenges Mamata Banerjee, says demonetisation is not a scam

Nov 08, 2017 - 16:42 (IST)

Tarun Gogoi says demonetisation disrupted India's credibility

Nov 08, 2017 - 16:16 (IST)

In a first, govt 'celebrating' death, suffering: Left

The Left lashed out at the Narendra Modi government, saying that for the first time in India's history, a government was "celebrating" death and suffering.

Six Left parties, which took to the streets to protest against the Centre's demonetisation policy, said the government had set two records – making people lose their lives in queues and helping hoarders change black money into white.

"The Modi Government has created two records in the world. One, it made people stand in queues and many people lost their lives; Second, though Modi tried to tell the people and the world that by demonetisation he would stop black money, in reality he has helped hoarders change black money into white," CPIM leader Brinda Karat said. - PTI

Nov 08, 2017 - 16:02 (IST)

Demonetisation risked national security and stability

There has been a lot of commentary leading up to the first anniversary of demonetisation. Most of it has focused on the economic impact or the lack of it. But a significant sidelight of what happened last year seems to have been forgotten in these reviews of the good, bad, and ugly aspects of demonetisation.

This sidelight is the fact that the prime minister met with the three service chiefs on the evening of 8 November, just before he announced that high-denomination currency notes of Rs 500 and Rs 1,000 would become invalid at midnight.

Read the entire article here

Nov 08, 2017 - 15:54 (IST)

In Pictures: Congress protests in Bhopal against demonetisation

Nov 08, 2017 - 15:44 (IST)

AAP workers protest against demonetisation in Patna

Image sourced from PTI

Nov 08, 2017 - 15:35 (IST)

Karnataka Congress members observe black day, protest against demonetisation

 Congress leaders from Karnataka gathered at Freedom Park, holding placards and shouting slogans against Narendra Modi and finance minister Arun Jaitley for the note ban move.

"What good did the note ban do, except for bring the country's Gross Domestic Product (GDP) down," questioned Karnataka Pradesh Congress Committee president G Parameshwara at the gathering.

The BJP seems to be on the back foot, even as it readies to celebrate the first anniversary of demonetisation on Wednesday, as the Opposition stepped up its attack on the move that disrupted the economy.

Around 18 opposition parties, including the Congress and Left, will observe 8 November  as 'black day' against the note ban which they termed as the government's "most ill-conceived decision.

Meanwhile, the BJP plans to celebrate the day as Anti-Black Money Day.

Announcing the decision, Finance Minister Arun Jaitley had said this would be a “priority programme” for the BJP. Senior party leaders as well as Union ministers will participate in it.

Demonetisation anniversary highlights Congress observes black day Rahul Gandhi calls note ban a tragedy

A file image of Congress vice-president Rahul Gandhi. PTI

The Opposition has termed demonetisation as the “most ill-conceived and hasty decision” by the NDA government.

Prime Minister Narendra Modi had on 8 November 2016 announced the demonetisation of Rs 500 and Rs 1,000 notes with a stated objective to curb black money, corruption and terror financing. However, the Opposition parties and many economists have questioned the ability of the move.

What is helping the Opposition is the fact that more than 99 percent of the banned notes came back into the banking system. Many economists have said that this means the banning of notes has not achieved the intended results.

Meanwhile, the Rs 500 and Rs 1,000 bills returned to banks are still being "processed in all earnest" through a sophisticated currency verification system, the RBI has said.

In reply to an RTI query, the central bank said it has processed about 1,134 crore pieces of Rs 500 notes and 524.90 crore pieces of Rs 1,000 junked notes, having face value of Rs 5.67 lakh crore and Rs 5.24 lakh crore respectively, as on 30 September.

The combined value of the processed notes is Rs 10.91 lakh crore approximately, according to the reply.

"Specified Bank Notes are being processed in all earnest in double shift on all available machines (sophisticated counting machines)," the Reserve Bank of India (RBI) said in reply to the RTI query filed by a PTI correspondent.

With inputs from agencies 

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