 "cash, protest, currency, demonetisation, black money, ATM, banks, rupee, notes")
On November 8, when the news broke that Prime Minister Narendra Modi would address the nation at 8 pm, many thought we were going to war with Pakistan. And that view was accentuated by other news reports of a meeting scheduled with the President after the address.
Well, a war was declared all right, but on black money. The ban on Rs 500 and Rs 1,000 notes stumped the nation. But there was great enthusiasm initially, as many believed it was a great move. After all, there is an almost perverse delight among the middle class and the poor when they feel the high and mighty are being brought down to their knees (something that has made many worship Arnab Goswami).
A month later, many are wiser, as the government’s narrative seems to have shifted focus from black money to digitisation and many other fronts (the finance minister’s press conference on Thursday clearly indicated that). What is more important is that much like the Income Declaration Scheme, in which no big politician or businessman was found to have black money, even demonetisation is yet to see any big names declaring any unaccounted wealth.
A businessman in Gujarat who declared Rs 13,000 crore but could not make any statement might have been a front for politicians, and another declaration of Rs 2 lakh crore by a Mumbai family has been rejected by the income-tax department. Also, some sacks of notes have been burnt or thrown away. So, film stars, politicians and industrialists who live in mansions and own 50 cars do not have black money and the agricultural rich need not bother about black or white as they are not taxed anyway. Now the question remains: Who has black money?
What is interesting is that the Reserve Bank of India, in its year-end policy on Wednesday, said that Rs 11.55 lakh crore had already been declared. So, three-fourths of the currency is back with the banks. With 23 days to go, the rest is expected to come back. But even if it doesn’t, the fact is that most of the currency seems to have been declared.
Yes, income-tax officials will scrutinise each deposit and find that some or many do not match the income shown. But all need not be black. Many people, especially businessmen, keep substantial cash with them. Unless there is fool-proof evidence, there will be several prolonged legal cases. What is more interesting is that the apex bank did not mention any deadline for the economy to become currency-neutral. Clearly, everyone is trying their best but no one seems to know the consequences fully or has any inkling of a timeline for the currency crisis to be resolved. Most, it seems, are now praying for the best, with least damage to the economy and population.
The entire month’s events beg one question: Were the entire exercise and the continuing hardship worth it? Even the most vociferous supporters of the move have admitted that at best only 10% of black money, or around Rs 1.45 lakh crore, is held in cash. Even if the taxation is 50%, the government will get Rs 70,000 crore – enough to fund another Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) kind of scheme. In the meantime, people are losing man hours to withdraw money, the poor are getting exploited and some are already dead.
Amid all this, when a senior government official says that all the idle money in households is back in the system and loan rates will come down, one seriously questions the objective of demonetisation – was it black money, digitisation, supporting the banking system, crippling Opposition parties, checking counterfeit… take your pick! But none of these is worth even one dead body. Heck, even the courts do not hang people for holding black money.
