Friday, 23 April 2021

Making India beg for its own money

Narendra Modi’s arbitrary and unprecedented trashing of 86 percent of high denomination notes has not just brought the world’s fastest growing economy to a grinding halt, it has also landed a billion people in a tizzy, sending them on an endless chase for a fistful of notes. India’s worst enemies couldn’t have come up with a cleverer idea to derail the economy. Just about everyone has been forced to drop everything they were doing to queue before banks. Modi has the whole of India begging for its own money. Hundreds of people have died, endlessly waiting in queues and trying to exchange their hard-earned money that the government has in one sweeping, imperious move declared worthless. Many have killed themselves in despair. Hospitals are not taking in critical patients because they do not have the new currency. Thousands of weddings have been cancelled. Offices are empty for people are out in serpentine bank-ATM queues. Factories are shut as they cannot pay their workers. Farmers have no money to buy seeds. Millions of daily wage earners in big cities have returned to their villages. All construction and building activity has come to a halt. Vegetables and food grains are rotting because vendors won’t pick them. ATMs are not dispensing more than Rs2000 a day; many of them either do not work or are out of cash.

What would millions of farmers and rural folk with no bank accounts and debit/credit cards do? Where do they go to exchange their old, worthless notes? They have no time to visit TV studios to cheer Modi’s ‘war on black money’. More than 90 percent of India’s work force is in the informal sector and nearly 60 percent of farmers are in distress. No wonder chaos reigns everywhere. To top it all, the government daily comes up with new rules. Kafka and Orwell couldn’t have in their wildest imagination spawned a nightmare of such proportions. To all of people’s woes and complaints though, Modi has one simple, sweet answer: grin and bear it in the national interest! The latest fad of the sultan of sophistry is to ‘go cashless’. And ‘go digita’ is the mantra of the massive government propaganda blitz. In a country where 97 percent of the population does its business in cash, nearly half languishes below the poverty lin, and thousands of villages do not have electricity, let alone banks and ATMs, asking people to ‘go cashless and digital’ is not just heartless and cruel, it borders on arrogance. History saw the same hubris at play when Queen Marie Antoinette of France advised her subjects to have cakes when they protested for bread. Qu’ils mangent de la brioche! Whoever advised the Dear Leader – few apparently do – they apparently convinced him that the notes ban is a master stroke to silence his detractors, especially those who pester him about his promise to bring back ‘black money’, and immortalise his legacy. In this breathless chase of glory and to keep the whole demonetisation business under wraps though, he apparently forgot to consult his own finance minister. The result is total anarchy and pandemonium, adding to people’s mounting fury and misery. Given the size and population of India, it was only to be expected. In any other country, there would have been a revolt by now.

The Supreme Court, which has been hearing a number of petitions seeking a rollback, was hardly exaggerating when it warned of nationwide riots, if the situation didn’t improve soon. More than a month later and with barely 20 days remaining to deposit old notes, it only seems to worsen. According to P Chidambaram, finance minister for two terms, even if new currency is printed 24/7 it would take at least six months to end the crunch. He trashes the demonetisation as ‘demonisation of people’s money.’ Dr Manmohan Singh, who headed the Reserve Bank and finance ministry before taking over as prime minister, has attacked the notes recall in strongest words possible, calling it a “monumental economic mismanagement” and “organised loot and legalised plunder”. Nobel Laureate Amartya Sen dismisses it as ‘neither intelligent, nor humane’. Considering less than five percent of ‘black money’ is in cash and only Rs400 million or just 0.002 percent of total currency in circulation is reportedly counterfeit, demonetisation is like, in the words of a former BJP minister, gouging out one’s nose to swat a fly. Clearly, Modi has swallowed more than he could chew and everyone, including the BJP and Modi, knows it. No wonder there’s palpable panic and desperation in their rhetoric and antics. Sometimes, the PM sheds copious tears for people suffering in queues – all in the national interest. At other times, he mocks them saying all those who cheated and hoarded black money all these years were queuing up for a couple of rupees. Yet a rollback is unlikely. It would be admitting that this has been one crazy idea, which someone of Modi’s ego can never do. However, if he bravely pushes ahead with it, the country is bound to pay a colossal price for this economic blunder. All major global agencies have warned of big setbacks to the economy. The growth rate is expected to come down by several percentage points, resulting in massive job losses. More than Rs1 lakh crores have been spent on the whole exercise with no benefits showing for it.

But then this is what happens when too much power and little accountability is concentrated in one individual. Where do we go from here? A worthy opposition would have pounced on this opportunity to take on Modi and wouldn’t have stopped until it brought him down. Governments have fallen over smaller and more mundane issues. Remember Tunisia and Egypt? David Cameron resigned on his own because the referendum he called over the UK’s future in European Union did not go as hoped. Why, only this week Italy’s Matteo Renzi announced his resignation after his reforms were rejected by the voters. In our part of the world, though, politicians are notorious for their thick skin. Commenting on the notes ban, Shoaib Daniyal of Scroll comes up with fascinating historical parallels: “The one decision for which Muhammad bin Tughlaq, the 14th century sultan of Delhi, is most remembered is the disastrous shifting of his capital from Delhi to Daulatabad in the Deccan. But this wasn’t the only one of Tughlaq’s decisions that ended in disaster. Like Modi, Tughlaq took a major gamble with the currency in his kingdom. Unfortunately for the ruler, that move (of introducing token currency and copper coins – tanka – in place of gold and silver) was a disaster, leading to a weakening of his sultanate.” What was wealth at one moment became, through the decision of a single man, worthless pieces of paper. Just as Tughlaq’s sultanate never recovered from his demonetisation, India’s economy may take ages to recover from the shock of the ban on these notes. Luckily for Modi, there’s total disunity in opposition ranks on the issue. Rahul Gandhi seemingly capitalised on it early to tap into people’s anger but the Congress quickly lost the momentum. It is reluctant to go the whole hog against the move, for fear of upsetting the rich and middle class voters. Bihar chief minister Nitish Kumar, seen as a challenger to Modi, has unpredictably supported the move. Kejriwal and Mamata Banerjee, eying the national stage, have been right on the ball, highlighting people’s misery. However, their presence is limited to certain regions. So Modi may get away with this massive attack on people’s hard-earned money for now. He has much of the nation’s media in his pocket, along with their corporate masters. But you cannot fool all the people all the time. Public memory may be notoriously short but it does not condone those who take it for granted and betray its trust. Just wait till 2019. In the notes ban, Modi may have dug himself and his party a nice, little ditch. As they say, whom the gods would destroy, they first make mad. This may very well prove the undoing of Narendra Modi.

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