95.BRAVO MODI. MARCH ON!

BRAVO MODI, MARCH ON!

The fight against black money has just begun, because it is now, after a long time, that we have a Prime Minister who is serious on this issue, and earnest in his approach, and means business. No one expects it to end in the first round, or easily, or soon.

Senseless Opposition's sound and fury signify nothing!

We should not care two hoots for the wily politicians who are now shouting against demonetisation. Just look at them: most of the parties are family fiefs; in popular perception they are all sitting on tons of black money. Karunanidhis, Jayalalithas, Mulayams, Lalus, Sonias,even Shiv Sena- all are perceived by the public to have huge cash reserves, even if all them have not been having formal corruption charges against them. [ Rahul Gandhi was even reportedly detained at a US airport in 2001 with his girl friend and huge cash  in US dollars for which he could not account; he was rescued by the then PM Vajpayee's advisor, who was a Sonia loyalist.Such people speak against demonetisation!]And though they all have political parties, all the money is controlled by family members, and not party functionaries. They cannot trust any one else with so much money. Apne saaye se bhi in log darne lage!

अपने साये से भी लोग डरने लगे
अब किसी को किसी पर भरोसा नहीं

 Those who  observed the elections know how money flowed those days. Hundreds of Tamilian workers in Bangalore went to their places in Tamil Nadu during the last election to cast votes and returned with cash: in Tiruvannamalai, Tirukkoilur area, they were paid Rs.250 to 300 per vote; in Pennagaram and adjacent areas, they were paid Rs. 500 to 600 per vote. This is open knowledge. Listen to their tales, and you know how the system operates! You may decide which parties were involved , depending on who won where! Where did all this money come from? 

Politics, Real estate, Cinema, Professions!

Politics, Real Estate, Cinema are the fields where black money flows like perennial river. In Bangalore, there are many high rise buildings which are not occupied but which have all been booked by people with money and who are waiting for the escalation in price, or just escalating the price themselves, if there are gullible buyers! All these are financed by our bankers. So, you know how the nexus works! During the secondary and every subsequent sale, part of the price is invariably taken in cash.This also is  common knowledge. It has become so common, no one cares and every one has to succumb.

Spectacular results already!

The demonetisation move is already showing spectacular results:

• It has already stopped the flow of funds to extremists- whether cross-border like in Kashmir, or the Maoists.
• In Bangalore, real estate bookings made during Dipawali have already seen 60% cancellation so far!
• Huge money already declared in deposits
• Sale of new gold/jewellery has dwindled; the main business now is exchange of old jewellery.
• With the decision to mark with indelible ink, queues are already thinning! The crowds were mainly due to hirelings, who went round to different bank branches to exchange notes with different identity cards!

Since money generated out of black transactions flows in and out of the regular economy, govt itself may end up as the loser in some cases. For instance, Karnataka govt has reported decline of Rs.6 crores in five days by way of  betting taxes in its commercial taxes dept.  Stamps & Registration, Excise depts too would register declines! This shows which sectors the black money was lubricating, mainly! More will surely surface!

Inherent difficulties in tackling black money

This is a problem facing any govt. Black money transactions are not a class apart. They are very much part of the system, like any rascal can dress like a gentleman! And govts themselves are often the beneficiary! This makes it difficult to target the black money transactions or holders with precision. But a govt with serious intent will have to start somewhere, and here Prime Minister Modi has done well. He deserves all credit.

In 1978, when the higher denomination notes[Rs.1000, 5000. 10,000] were demonetised, they were not in regular circulation,though legal tender, and only formed a tiny percentage of total money circulation.Rupee had value, and people did not need to possess or use a Rs.1000 denomination note which was really a high value note! Most people had not even seen them! So, it did not have an impact. The whole operation was over in a week! [ In fact, it was a totally unnecessary move, a fad of the then PM Morarji Desai, taken against the advice of the governor of the RBI] But now, the Rs,500 and Rs. 1000 notes are in wide circulation, used in day to day transactions by most people, rupee having depreciated in value,  forming 86% of the value of money in circulation.Replacing this in smaller denominations is a daunting task. That is why the general public is feeling the immediate impact. This cannot be helped, in a surprise move of this magnitude. Considering the advantage to the nation, and the honest tax payer, we as citizens must be willing to bear a little temporary inconvenience.

 In a way, the black money holders are holding the general public to ransom: they want to take cover behind the public. And our opposition parties are supporting them!

More measures are needed

But this demonetisation leaves our political and economic systems unchanged; the bureaucracy untouched; the scope for black transactions is left wide open. Which means that our politicians and shrewd industrial-business class and professionals may begin their next round with brand new currency, not to speak of petty corruption at the lower levels!

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It is not for me to suggest the political and economic changes that would stop or discourage black money. But one thing is certain: it is the political corruption that is the root of black money.  I feel our political class is beyond correction or redemption, and the general public [electorate] is generally indifferent to the question of morality or probity in public life.  Our media will support whoever will give them advertisement. Corruption is part of our culture: even a birth or death certificate cannot be obtained without bribe! Registration of marriage too involves a standard payment ; the registrar is now the govt priest! While we may not end corruption or even limit the scope for it, we may attempt to render such acts more difficult to accomplish with cash! 

High Denomination currency should be phased out for ever: move towards less cash economy

1. There should be no notes in circulation, higher than Rs.100. If it is to remain in circulation and retain some value, govt will have to contain inflation seriously and really and not just manipulate the figures and fool the public! This will make the finance ministry accountable. Their babus will really have to work.

2. Rs.2000 denomination introduced now is a mistake and it should be withdrawn soon.

3.Rs. 500 notes should be phased out gradually.

3. If anyone feels the need for higher denomination, it should be in denominations of Rs.1,00,000 and above; they should be numbered and registered, issued over bank counters to their own customers; they should not be meant for general circulation. They should be required to be redeposited and not exchanged for lower denominations.[ This will facilitate genuine high value transactions without giving scope for black money]

The mere absence of high value currency notes will render high value black money cash transactions cumbersome and inconvenient. It will generally steer the economy to a cashless or at least less-cash mould. It may only be a small beginning, but will not be a minor achievement in a predominantly cash using economy.

Accumulation of huge amounts of paper currency will be rendered physically unmanageable, if not impossible! No one can hold or hoard unaccounted money in physical form. This may drive them towards precious metals, which is a perennial favourite. But it can be dealt with.

Well begun, Mr.Modi

I am not an admirer of the BJP govt. I strongly feel that this govt lacks an overall economic vision ["Make in India" is only a slogan,  like "Panchsheel", or "Non-alignment" and not a policy.] I also feel that it lacks solid political content , a strong Constitutional position and firm commitment. But it is the best we have in a long time, better than opportunistic, clan-based alliances. And it is still early days for a new dispensation after half a century of dynastic rule. So, it deserves some grace time.

 Demonetisation is a bold move and so will attract adverse reaction from interested quarters. Sri Modi should not dilute it under any circumstances. Standing in queues is not new to Indians and we can do once more for a truly patriotic purpose, for once! The difficulties connected with smaller denomination notes are temporary, and we had seen even days of severe coin shortages- when coins had to be imported.

Temporary difficulties exaggerated

Some people are simply exaggerating the difficulties which are purely incidental to the big , historical move and temporary.. There are 5 ATMs of different banks near my residence. On a given day, three of them do not work; two will not give you cash in the required amount; they will  probably not provide you the receipt. Yet, what do the lousy bank managements do, and what do people do? This is the experience even in the normal days. And we are facing an abnormal situation now.

There was absolutely no need for people to get panicky or finicky. Are we all so witless that we could not even manage a few days ? Why stand before the ATMs when we could go  to the bank and draw the cash? Why compete with those who must exchange their cash?

Opposition parties are wasting their time, though providing us with much needed comic relief! That they are wasting Parliament's time and our tax money is the reflection of their lack of perception, and disrespect for the public. Ignore them.That will teach them their place. Anyone who demurs on demonetisation is an enemy of the nation. 

We should all take a minute off, ponder on the magnitude of the problem, the historical, unprecedented nature of the solution, the need for absolute secrecy and surprise, the huge logistic problems involved- before any one of us dares to lift a finger against the govt. Any dull fool can find holes in any scheme, but how many can give a constructive solution?

If we feel strongly that black money is a serious problem undermining and threatening our economy, does it not behove us as honest citizens to come forward to help the govt with willing cooperation, despite some small inconvenience? Have we really starved for days for want of small change? And if we do not so feel,are we real citizens of this democracy? Does our job end only with voting and electing some fool of a neta?

Mr. Modi, we salute you

Carry on, Mr. Modi. All thinking Indians are with you. All true citizens are with you. Some of us may wonder how effective this measure will be to curb black money in the long run; but there is no doubt that it will immobilise  huge black money balances right now. Whatever the extent, it is a net gain to the economy. No Prime Minister so far had this courage.

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We salute you, Mr.Modi, for this truly nationalistic initiative.