Skip to main content

Modi's currency ban qualified an "ivory tower move", coming from government living in a "parallel universe"

By Our Representative
A senior economist of influential US economics organization, HIS Global Insight, has termed the decision to demonetize Rs 500 and 1000 notes as reflecting "a vast disconnect between the ivory tower of Modi's government in Delhi run by urban middle class bureaucrats and the reality of life for the rural poor in India".
In a scathing critique of Modi's demonetization move, the top expert of the Massachusetts-based body, which serving over 3,800 clients in industry, finance and government, and offices in 13 countries, says, "Almost every other country allows a transition period for people to exchange their old banknotes for the newly issued notes."
In an interview with Deutsche Welle or DW, Germany's public international broadcaster, Rajiv Biswas, Asia-Pacific Chief Economist of HIS Global Insight, says, "This procedure effectively removes the old counterfeit notes from the system since banks will detect counterfeit notes at the point of exchange." 
"However", he insists, "To just abolish 86 percent of banknotes overnight in a poverty-stricken nation where the poorest half of society depend on cash transactions seems completely silly."
Biswas says, "The overnight cancellation of 86 percent of India's banknotes in value terms has created a huge shock to Indian consumers since 50 percent of adults do not have bank accounts or digital money and a high share of ordinary transactions rely on cash, particularly for everyday food purchases such as vegetables, fruits, meat and fish."
According to him, "Much of this cash-based economy involving the poorest 50 percent of Indian consumers has slowed down sharply, and this will hit the fourth quarter (October-December) GDP figure assuming the statistics are properly calculated in the first place."
Pointing out that India is "essentially a very poor nation by international standards, with annual per capita GDP of only around $1,600 (1,500 euros) in 2015", Biswas says, "An estimated 50 percent of the adult population does not have bank accounts or digital money, particularly in rural India where villagers have little access to bank branch networks or ATMs."
"While much could be done to mitigate the burden of the poor, it seems that the Modi government is living in a parallel universe to the rural poor, and therefore is unable to grasp the problems that its demonetization edict has created for much of India's population", the senior economist says.
Pointing out that "India has been plunged into chaos by this Indian government brainwave of abolishing 86 percent of banknotes overnight", Biswas notes huge queues of ordinary people in desperation "is like a scene from Leninist Russia after the Bolshevik Revolution when the economy collapsed."
"It is hard to believe Modi's demonetization snake oil cure-all magic potion will resolve the issue of black money as those who are involved in illegal transactions can turn to alternative forms of money, such as foreign currency or gold", he says.
Biswas warns, "Other developing countries such as Myanmar or Cambodia, where there has been a lack of trust in their own domestic currency, sometimes become dollarized, with the local population using US dollars as their preferred currency."

Comments

TRENDING

Green revolution "not sustainable", Bt cotton a failure in India: MS Swaminathan

Counterview Desk
In a recent paper in the journal “Current Science”, distinguished scientist PC Kesaven and his colleague MS Swaminathan, widely regarded as the father of the Green Revolution, have argued that Bt insecticidal cotton, widely regarded as the continuation of the Green Revolution, has been a failure in India and has not provided livelihood security for mainly resource-poor, small and marginal farmers.
Sharply taking on Green Revolution, the authors say, it has not been sustainable largely because of adverse environmental and social impacts, insisting on the need to move away from the simplistic output-yield paradigm that dominates much thinking. Seeking to address the concerns about local food security and sovereignty as well as on-farm and off-farm social and ecological issues associated with the Green Revolution, they argue in favour of what they call sustainable ‘Evergreen Revolution’, based on a ‘systems approach’ and ‘ecoagriculture’.
Pointing out that Evergreen Revol…

World Bank clarifies: Its 26th rank to India not for universal access to power but for ease of doing business

By Our Representative
In a major embarrassment to the Government of India, the World Bank has reportedly clarified that it has not ranked India 26th out of 130 countries for providing power to its population. The top international banker’s clarification comes following Union Power Minister Piyush Goyal’s claim that India has “improved to 26 position from 99” in access to electricity in just one year.

Some Hindu bodies in US defending BJP-RSS' divisive, violent activities: Agnivesh

Counterview Desk Last week, Washington DC saw speakers at a religious freedom roundtable, chaired by the US Ambassador for Religious Freedom, Sam Brownback, express concern over "eroding" space for religious freedom in India. Dr Mike Ghouse, executive director, of the Center for Pluralism in Washington DC, referring to the roundtable, said in an email alert that Indian-Americans have "a moral duty to prevent India from being labeled as a Country of Particular Concern by the United States Commission on International Religious Freedom (USCIRF)".

Rejoinder: Inescapable to have Central Water Commission as strong technical body in India

By BN Navalawala*
This is with reference to Counterview Blog (December 5, 2018), "Modi govt 'shelves' water reforms report, shows 'no interest' in its recommendations", below mentioned are my comments/observations thereon:
A committee was constituted under the Chairmanship of Dr. Mihir Shah, Former Member, Planning Commission, for restructuring of Central Water Commission (CWC) and Central Ground Water Board (CGWB) for optimal development of water resources in the country in the backdrop of Integrated Water Resources Management (IWRM).

Murder of Tamil Nadu teenage Dalit girl: "Stoic silence" despite #MeToo movement

Counterview Desk
Brinelle D'souza, who is with the Centre for Health and Mental Health, School of Social Work, Tata Institute of Social Sciences, Mumbai, has prepared a strong statement to protest the brutal murder of 13-year-old Rajalakshmi. "Other than a few media reports, this gruesome killing has not caught national attention despite a very vibrant #MeToo campaign currently underway", regrets D'souza.

Preventing childhood deaths: India performs worse than Bangladesh, "equals" Pakistan

By Rajiv Shah
A just-released study, “The Pneumonia and Diarrhea Progress Report 2018”, prepared by the International Vaccine Access Centre (IVAC) at the Johns Hopkins Bloomberg School of Public Health, has identified India among 15 other countries which are still far off the mark in achieving the targets of the Global Action Plan for the Prevention of Pneumonia and Diarrhea (GAPPD).

60 ex-civil servants seek release of CAG reports on Rafale, demonetisation before 2019 polls

Counterview Desk
As many as 60 retired civil servants have asked President Ram Nath Kovind to expedite the release of Comptroller and Auditor General (CAG) reports on demonetisation and the Rafale deal. The letter, signed mainly by former Indian Administrative Service, Indian Foreign Service and Indian Police Service officers, regrets that the status of the audit is "unclear”. According to them, “An impression is gaining ground that CAG is deliberately delaying its audit reports on demonetisation and Rafale deal till after the May 2019 elections so as not to embarrass the present government”.

India's rewritten textbooks talk of demerits of democracy, praise Hitler, underrate Mughals

Counterview Desk
A detailed, 3,800-word review of the books rewritten under directions of the BJP rulers across India since Prime Minister Narendra Modi came to power in May 2014 has suggested that one of aims of the books is to instill a sense of doubt about India’s democratic polity among the country’s young minds. Reviewed in the prestigious US journal, “The New York Review of Books”, in its latest issue (December 6, 2018) by Alex Traub, the scrutiny insists, the effort has also been to paint Indian history from the angle of “Hindu triumphalism”, even as creating “Islamophobia”.

Govt of India "tarnishing" NGO reputation, dossier leaked selectively: Amnesty

Counterview Desk
Amnesty International India has said that a deliberate attempt is being made to tarnish its reputation by leaking a dossier, supposedly made by investigating agencies, to media without giving it access to any such information. The high profile NGO’s claim follows a Times Now report about proceedings launched by investigative agencies, including Enforcement Directorate (ED) against the rights body for “violations” of rules pertaining to overseas donations.

Four children die after poor UP Dalit, Muslim families forced to flee to forest area: PVCHR

Counterview Desk
Peoples’ Vigilance Committee on Human Rights (PVCHR) has said that the forest department police’s crackdown, allegedly without any prior notice, on Dalit and Muslim households in Dakhin Tola, Churk Bazaar, Sonbhadra district, Uttar Pradesh, beating up “children and old people, women, and men in an inhuman way”, has led to “forced displacement, starvation and discrimination”. This has reportedly affected about 350 people.