Skip to main content

One year of demonetization: Purpose was to create mayhem in political circles ahead of UP polls, manipulate unofficial cash

By Anil George*
Demonetization was a calculated scam.
The first purpose was to disable party's that were contesting the UP election by blocking their cash and creating mayhem in political circles.
The second purpose was to exchange unofficial cash through manipulation of the banking system. For this the governor was changed and direct new currency supply lines were established. Cash was exchanged at a discount ranging from 5% to as high as 50% and then eventually tapering to 5% towards the end of the program.
Temples and Trusts that receive cash also opened discount windows to exchange the money.
Midway during the program, Congress found some explosive material on Modi and threatened to expose him through an earthquake but this was prevented after a meeting between Rahul Gandhi and Modi and issuing of executive order that all political party's could deposit cash into their own bank accounts.
After this all political parties got busy with opening similar discount windows through which old currency was deposited and later withdrawn.
As no political party comes under RTI or under Income Tax and as all their deposits and expenses are away from public glare, everybody made money at the expense of those who had accumulated large amounts of money.
The big businessmen were already kept in the loop and they were not affected at all.
What went wrong in the calculation was the RBI's ability to handle the cash crisis and refilling of the cash.
Thus digital Indian was promoted but that too worked for a short time and is now more or less is dead. Very few people are using digital payment methods. Cash use level is back to what it was before November 8, 2016.
And the 45% Indians who did not have bank accounts and could not exchange their money and the poor got shafted but they were sold patriotism and soldier standing on the border kind of stories, queues outside Reliance Jio stores and Cold Play concert ticket lines were used to shame most Indians who dared to speak against the Modi move to kill black money.
No black money got killed. The sudden withdrawal of cash from the economy however killed the informal economy, which anyway is the bulk of our economy. Small and Medium enterprises got badly mauled, job losses were all around and as a consequence the GDP fell. Although government claimed a fall to 5.7% but considering that the formula had been tweaked earlier, actually it has fallen to 3.7%.
Now at the recent press conference, Arun Jaitley showed a graph of IMF based forecast which shows the economy going into decline till 3rd Quarter of 2019, which is two years of continuous decline from today before it comes back to level off at pre-November 8, 2016 levels in 2023.
The government's hope that people will not be able to deposit all the money and their childish attempts to prevent deposits including threats issued by Modi himself and 60 rule changes in 50 days showed that the government is of the uneducated and in its zeal to keep the move secret it had shot itself in the foot and indeed shot the country down.
But all political party's made money while the sun shone.
This is the long and short of demonetization. An experiment by IMF to test what happens to a country when all cash is withdrawn and our joker allowed the country to become the IMF laboratory.
If you notice, there is only one institution that is praising Modi and that is IMF.
By the way, it was not a scam to recapitalize the banks. That would have only happened if Indians had failed to deposit all the cash. But most of the cash was with the big guns who were anyway unaffected and the small guys managed to push in all their cash through proxy accounts. Thus 98.97% cash came back.
Yes the consequent fall in economy and the destruction of banking credit ensured that the interest rates went down, this benefited large borrowers at the expense of small depositors and retired people. For the first time in India's independent history bank credit growth went into negative territory.
It is a long road to recovery as business confidence lies shattered and the economy has been sent to the cleaners.
In any other country the government would have been deposed and the leader lynched, but we are only good at lynching those who attack cows and we make such leaders into holy cows.
---
*Source: Anil George's Facebook timeline 

Comments

TRENDING

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Critics of your government should not be in jail: PUCL shoots open letter to Modi

Counterview Desk In an open letter, Ravikiran Jain, national president, and Dr V Suresh, general secretary, People’s Union for Civil Liberties (PUCL) have taken strong exception to Prime Minister Narendra Modi’s view that raising human rights issues can ‘tarnish’ the country’s reputation, stating, those who raise human rights concerns do it “through established United Nations mechanisms such as the UN Human Rights Council, the Office of the UN High Commissioner of Human Rights.”

Dalits 'celebrate' Constitutional Power Era in 12,500 villages of 16 districts on Nov 26

By Pradip More*  It is a fact that the majority of the people do not have much knowledge about the law, and especially the Constitution. Yet, today's younger generation is becoming increasingly aware of its rights. One wished it would have been good if it was taught about the Constitution well in the schools.

When judges behave more like priests, delivering sermons from high podium...

By Ajit Singh*  The theory of separation of power found its origins in ancient Greece but with the passage of time it became widespread in other parts of Europe. Early proponent of the theory Greek philosopher Aristotle in “Politics” argued that implementation of constitution in letter and spirit can only be possible if the three elements among whom the power has been distributed are well arranged.

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

'We are scared to even raise our voice': Delhi sewer workers tell roundtable

By Our Representative  A roundtable attended by more than 100 sewer workers in Delhi, saw sharp voices against the contract system, poor wages and lack of any social benefits. Organised by the Dalit Adivasi Shakti Adhikar Manch (DASAM), which has refused to reveal the identity of the sewer workers who spoke on the occasion for fear of retaliation from the authorities, saw workers complain that have been working for more than 10 years, hoping that someday they would be made permanent.

Govt of India's 'narrative' of hate, 'clarion call' for onslaught on civil society: Ex-babus

Counterview Desk  Addressing “fellow citizens”, the Constitution Conduct Group (CCG), having former prominent civil servants as it members, has said that recent assertions by National Human Rights Commission National Human Rights Commission Justice (retd) Arun Mishra, the Prime Minister and General Bipin Rawat, Chief of Defence Staff, portent a deliberate and disturbing strategy to “deny civil society the space and wherewithal for its operation.”

Muck being thrown in Uttarakhand rivers: Villagers face 'existential' crisis

By Vidya Bhushan Rawat*  The Uttarakhand government must act fast to clear the path of Dhauli Ganga river about two kilometres ahead of village Neeti and about one kilometre from Ghamsali village, which is about 90 kilometer from Joshi Math town in district Chamoli. The creation of an artificial lake due to throwing of muck and mud can create a catastrophic situation like what happened on February 7, 2021-- the Rishi Ganga-Dhauli Ganga tragedy at Tapovan and Raini village in which over 200 people lost their life.

How Indore turned into water minus city after authorities 'managed' Water Plus title

Water harvester cleaning up hyacinth from an Indore river By Rahul Banerjee*  Recently, the city of Indore was declared the first Water Plus city in India under the Swachh Sarvekshan programme of the Ministry of Housing and Urban Development for its ostensibly exemplary waste water management. However, the reality is quite different as a detailed study of the prevailing wastewater management situation in the city shows.

UP govt 'ignoring' demand to fill up teachers' posts despite unemployment: Rights groups

Sandeep Pandey with Shikha Pal Counterview Desk  Commenting on the unique protest undertaken by Shikha Pal atop an overhead water tank for nearly four months, the Socialist Party (India), in association with several civil rights group, Yuva Shakti Sangathan, Socialist Yuvjan Sabha and Rihai Manch, have wondered why has the Yogi Adityanath government is so “insensitive” towards her demands and is looking the “other way.”