Gains of Demonetization

As soon as the black economy came to its senses after the initial shock of demonetization of the high value Rs. 500 and 1000 currency notes, it went into the offensive mode targeting the Prime Minister Narendra Modi for daring to take on it.

The failed to find the right words to hit back and demolish the government’s move in the politically correct and marketable jargon.

Demonetization received so much public support and applause that the holders of black money felt jittery about their future prospects. To survive, they needed a black government, also called the parallel government, to keep the revenue enforcement authorities away from them. Such governments came to power on the strength of “bought” elections. For buying an election, mass bribing of the voters is necessary. Taking into account inflation and price rise, small denomination currency notes of rupees 100 or less have lost their value; only 1000 & 500 notes retained the power to allure the voters, especially the vulnerable sections suffering poverty, disease and backwardness caused by the vicious circle of black money-black economy-parallel government-inflation –price rise, with great perseverance, having no other option.

They were the first to welcome the Prime Minister’s announcement about demonetization. They were excited and gung-ho, cheering on the streets, waving in to the TV cameras seeking critical bites from them in the rural areas, at railway stations or bus stands, in vegetable & fruit wholesale markets where they brought their produce.

The middle class expressed happiness and lauded the policy to contain black money, asserting that the decision was long awaited.

The rich preferred to keep silent. In fact, they were so depressed that they started burning the piles of currency notes as it was nothing more than useless pieces of paper for them and could bring them more trouble from the income tax authorities.

The terrorists were devastated.

Smugglers, drug mafia and crime syndicates lost their hard earned (?) money in a moment. The money in domestic and foreign bank lockers stashed by them so carefully was gone at one stroke.

Worst affected were the political leaders who were aghast at such a surgical strike against them. The prospects of their dynastic rule seemed suddenly in the doldrums.

Seeing long queues at banks, the political class found an excuse to hit at the government with uncanny ferocity. They gathered their wits, consulted likeminded parties, formed a “united” opposition, drew up the agenda and mounted the attack in the name of inconvenience to the public, especially the poor. Indian poor survive on less than a Dollar a day. They have not even seen a 1000 rupee note. How are they inconvenienced? The poor below the poverty line, those above the poverty line, the lower middle class and the middle “middle class” constitute approximately 70% of the population. Most of these people earn just enough to buy food for the day. Those with zero earning (millions) survive on social charity of kind hearted neighbors or just go without any food. Are they inconvenienced?

They are the vote banks, whose freedom is bought by the political class for full 5 years for one Rs. 500 or 1000 note. That is the maximum price for their vote. The poor barter away their freedom for slavery of the corrupt.

Why are these people cheering and others crying?

They are cheering primarily because Indians value honesty and integrity in public life. They are cheering because they are sick of their corrupt politicians, who push their agenda in the name of the poor, middle class and communities. They are cheering because they see an end to a corrupt system that has given them oppressive governments, inflicting on them untold miseries all these years. The honest people are cheering and the dishonest are crying. The poor have lived in fear, insecurity, unemployment and hopelessness. In Narendra Modi they see a Prime Minister who brings them some hope.

The poor have heard stories of atrocities of the rulers and personally experienced it. They see the government functioning in social, political, judicial, healthcare, employment and other walks of life on a daily basis. They know how their rights are trampled upon by the mighty. They see wads of high denomination currency notes in their hands in banks when they go to open their zero balance bank account under the Jan Dhan Yojana, started by Prime Minister Narendra Modi. They suddenly recall having seen the local politician carrying such notes during election time. Even though they are not educated, they are intelligent enough to find the connection of these notes with elections.

The local politician is known to them as one suspected to be trafficking in women, children and cattle before turning rich overnight. Police has been often seen taking him away. But during the elections, he accompanies ministers. He won the last election for the office of the Chief of the local body (Pachayat). He controls the rural employment scheme, which guarantees poor people a minimum 100 days employment. He simply cooks the accounts without engaging the needy for the full 100 day term, keeps all their work cards with him and keeps everyone in the chain happy. He was like them till about 10 years ago but now owns a fancy car and walks in costly shoes without any visible means of livelihood. He is directly hit by demonetization announced by Prime Minister Modi.

It gives the poor vicarious pleasure as they have nothing to lose but this Panchayat Chief has everything to lose, including his costly shoes. By imaginative extension, it also hits the politician who visits them once in five years to enslave them for meager amount of just rupee 500 or 1000.

The middle class is paying unreasonably high income taxe because of loss of legitimate revenues to the government caused by tax evasion. Were the tax evaders made to pay taxes due from them, the tax rates would have come down significantly, and the burden on the middle class to compensate the government for the loss of revenue caused by tax evaders would have ended.

Tax evasion is facilitated by corruption. Corruption flourishes under a parallel government only. A parallel government survives on a parallel economy. They thrive only on the power to “buy” the election. Narendra Modi has held out the hope to demolish this “unconstitutional” structure. They have supported the prime minister vociferously. They are not opposed to demonetization.

It is only the leaders of the opposition parties who are posing to be speaking for the inconvenienced middle class. They have failed to cut any ice.

The big media houses have been known to be big financiers and beneficiaries of political parties which have ruled for decades. They are also known as the hoard houses for the black money of these politicians. As is known, birds of a feather fly together.

So next to attacks from the opposition leaders of all hues, syndicated columnists have been harnessed to attack the government in the name of the ill effects on the economy & fall in the growth rate. They have no qualms of conscience in disguising their unholy campaign against the government, and in particular the Prime Minister, Narendra Modi, as literary festival.

What these economists, columnists and intellectuals are saying is that black money and black economy are indispensable for registering high growth rates and should be spared the hit of demonetization and further strikes.

The political leaders have brazenly demanded “roll back” of demonetization and the columnists are demanding cease of further logical strikes.

Black money is invested in illegal properties, land, farms, bullion, diamond and shares. Umpteen companies are owned by one person and hundreds by the family, which specialize in “round tripping of black money” in domestic and foreign firms. Only so much black money is held in cash as can’t be safely invested or required to buy elections, government contracts, political offices or services of highly paid lawyers to manage favorable court judgments.

The black economy and the parallel government have reached various courts in the country with frantic prayers to declare the government notification unlawful and void.

The government is under attack from all sides. It would be a wonder only if some forces within the BJP or the NDA, the Prime Minister’s party and ruling allies, might not be quietly encouraging the opposition onslaught. If the PM wilts and rolls back or gives up on follow up strikes, it would be the grossest breach of trust of the people of India.

But if he carries on as publicly announced by him in Goa recently, India gains as follows:-

  1. Buying elections with black money will end;
  2. Corruption will end as the incentive to accumulate black money would be gone for fear of future demonetization;
  3. Investment opportunities in elections, properties held in the names of others (benami), gold and precious jewellery and shares in equities will dry up;
  4. Crime will come down by more than 95%;
  5. Terrorism will subside and so will the business of fake currency printed in Pakistan and sent to India by the ISI of Pakistan, which runs the terrorist attacks in India and elsewhere in the developed countries;
  6. Smuggling will end;
  7. Extremism of the Naxalism/Maoism variety will die a natural death;
  8. Transparency in governance will vastly improve;
  9. People’s hope of ethics in governance will be revived;
  10. Values in life will acquire respect;
  11. India will shift its status to an honest nation worthy of becoming a Super Power in its own right;
  12. The country will become prosperous in a few years as digital transactions will replace cash transactions and growth of real economy;
  13. It will become a fully developed country in a few decades on the strength of its advances in the knowledge industry, for which it had earned the status of a World Guru in ancient times;
  14. It will contribute to world peace;
  15. It will witness reversal of the phenomenon of brain drain to brain gain.

Temporary loss to some will turn into gain for them too, provided they court the doctrine of ethical governance, voluntarily extend all cooperation and help continue the cleanliness drive in public life.

If white money brings the same happiness, why opt for the black money?

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