Demonetization – One Year Of A Rudderless Cacophony (A Booklet of Compilation of Blog Posts)

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On the midnight of 8/11/16, in a single pronouncement, the Prime Minister of India made higher denominations of Rs. 500 and Rs. 1000 illegal tender under the pretense of curbing black money, arresting tax evasion, stopping funding of terrorist activities and counterfeiting of currency. Those who had these notes were given a time frame of less than 2 months to deposit them and withdraw new denominations in different slabs of limits set by the RBI. The Indian economy, which is predominantly cash based and the Indian people, a great section of who are financially excluded, existing solely on hard currency, would somehow have to manage through this ‘temporary crisis’ for the greater good of the nation. This was the call of the Prime Minister to undergo ‘temporary hardships’ to root out the ills of the Indian Economy.

And so what happened? The country panicked and people rushed to banks to deposit their cash savings, exchange high denominations and lines formed. Long lines, winding unending lines full of people waiting to deposit and get new notes. People died in those lines, many patients could not get timely medical help, many social functions – marriages and burials got drowned in questions of “why cant you suffer a little for the country, when soldiers are giving their blood in the borders to protect you”. But what about people who never had a bank account? Or those too far away from a branch or ATM to withdraw or exchange? Or those whose earnings were so marginal that they could not spare losing a day’s work waiting in lines? Or women who had painstakingly collected money for emergency over many years? What about those crores of rupees that was saved through co-operative banking system, still far away from the mainstream banking operations – but was safeguarding the money of crores of people in many states? Modi’s solution for those suffering was clearly evident on the morning of the 9th, plastered on almost every major newspaper “abhi ATM nahin, Paytm Karo.”…..

Demonetization – One Year Of A Rudderless Cacophony

 

Why Should Modinomics Be Bestowed With An Ignoble Prize In Economics? Demonetization’s Spectacular Failure.

This lesson from history is quite well known:

Muhammad bin Tughlaq thought that may be if he could find an alternative currency, he could save some money. So he replaced the Gold and Silver coins with copper currency. Local goldsmiths started manufacturing these coins and which led to a loss of a huge sum of money to the court. He had to take his orders back and reissue Gold/Silver coins against those copper coins. This counter decision was far more devastating as people exchanged all their fake currency and emptied royal treasure.

And nothing seems to have changed ideatically even after close to 800 years since, when another bold and bald move or rather a balderdash move by the Prime Minister of India Narendra Modi launched his version of the lunacy. Throw in Demonetization and flush out black money. Well, that was the reason promulgated along with a host of other nationalistic-sounding derivatives like curbing terror funding, expanding the tax net, open to embracing digital economy and making the banking system more foolproof by introducing banking accounts for the millions hitherto devoid of any. But, financial analysts and economists of the left of the political spectrum saw this as brazen porto-fascistic move, when they almost unanimously faulted the government for not really understanding the essence of black money. These voices of sanity were chased off the net, and chided in person and at fora by paid trolls of the ruling dispensation, who incidentally were as clueless about it as about their existence. Though, some other motives of demonetization were smuggled in in feeble voices but weren’t really paid any heed to for they would have sounded the economic disaster even back then. And these are the contraband that could give some credibility to the whole exercise even though it has turned the world’s fastest-growing emerging economy (God knows how it even reached that pinnacle, but, so be it!) into a laughing stock of a democratically-elected dictatorial regime. What is the credibility talked about here? It was all about smashing the informal economy (which until the announcement of November 8 contributed to 40% of the GDP and had a workforce bordering on 90% of the entire economy) to smithereens and sucking it into the formal channel through getting banking accounts formalized. Yes, this is a positive in the most negative sense, and even today the government and whatever voices emanate from Delhi refuse to consider it as a numero uno aim.

Fast forward by 3 (period of trauma) + 8 (periods of post-trauma) months and the cat is out of the bag slapping the government for its hubris. But a spectacular failure it has turned out to be. The government has refused to reveal the details of how much money in banned notes was deposited back with the RBI although 8 months have passed since the window of exchange closed in January this year. Despite repeated questioning in Parliament, Supreme Court and through RTIs, the govt. and RBI has doggedly maintained that old banned notes were still being counted. In June this year, finance minister Arun Jaitley claimed that each note was being checked whether it was counterfeit and that the process would take “a long time”. The whole country had seen through these lies because how can it take 8 months to count the notes. Obviously there was some hanky panky going on. Despite statutory responsibility to release data related to currency in circulation and its accounts, the RBI too was not doing so for this period. They were under instructions to fiddle around and not reveal the truth. Consider the statistics next:

As on November 8, 2016, there were 1716.5 crore piece of Rs. 500 and 685.8 crore pieces of Rs. 1000 circulating the economy totaling Rs. 15.44 lakh crore. The Reserve Bank of India (RESERVE BANK OF INDIA ANNUAL REPORT 2016-17), which for a time as long as Urjit Patel runs the show has been criticized for surrendering the autonomy of the Central Bank to the whims and fancies of PM-run circus finally revealed that 99% of the junked notes (500 + 1000) have returned to the banking system. This revelation has begun to ricochet the corridors of power with severe criticisms of the government’s move to flush out black money and arrest corruption. When the RBI finally gave the figures through its annual report for 2016-17, it disclosed that Rs. 15.28 lakh crore of junked currency had formally entered the banking system through deposits, thus leaving out a difference of a mere (yes, a ‘mere’ in this case) Rs. 16,050 crore unaccounted for money. Following through with more statistics, post-demonetization, the RBI spent Rs. 7,965 crore in 2016-17 on printing new Rs. 500 and Rs. 2000 notes in addition to other denominations, which is more than double the Rs. 3,421 crore spent on printing new notes in the previous year. Demonetization, that was hailed as a step has proved to be complete damp squib as the RBI said that just 7.1 pieces of Rs. 500 per million in circulation and 19.1 pieces of Rs. 1000 per million in circulation were discovered to be fake further implying that if demonetization was also to flush pout counterfeit currency from the system, this hypothesis too failed miserably.

Opposition was quick to seize on the data with the former Finance minister P Chidambaram tweeting:

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He further lamented that with 99% of the currency exchanged, was demonetization a scheme designed to convert black money to white? Naresh Agarwal of Samajwadi Party said his party would move privilege motion against Urjit Patel for misleading a Parliamentary Panel on the issue.

But, what of the immense collateral damage that the exercise caused? And why is the government still so shameless in protecting a lunacy? Finance Minister Arun Jaitley on asserted that any attempt to measure the success of the government’s demonetization exercise on the basis of the amount of money that stayed out of the system was flawed since the confiscation of money had not been the objective. He maintained that the government had met its principal objectives of reducing the reliance on cash in the economy, expanding the tax base and pushing digitisation. Holy Shit! And he along with his comrades is selling and marketing this crap and sadly the majority would even buy into this. Let us hear him out on the official position:

Denying that demonetisation failed to achieve its objectives, Finance Minister Arun Jaitley said the measure had succeeded in reducing cash in the economy, increasing digitisation, expanding the tax base, checking black money and in moving towards integrating the informal economy with the formal one. “The objective of demonetisation was that India is a high-cash economy and that scenario needs to be altered,” Jaitley told following the release of the Reserve Bank of India’s (RBI) annual report for the last fiscal giving the figures, for the first time, of demonetised notes returned to the system. The RBI said that of the Rs 15.44 lakh crore of notes taken out of circulation by the demonetisation of Rs 500 and Rs 1,000 notes last November, Rs 15.28 lakh crore, or almost 99 per cent, had returned to the system by way of deposits by the public.”The other objectives of demonetisation were to combat black money and expand the tax base. Post demonetisation, tariff tax base has increased substantially. Personal IT returns have increased by 25 per cent,” the Finance Minister said. “Those dealing in cash currency have now been forced to deposit these in banks, the money has got identified with a particular owner,” he said. “Expanding of the indirect tax base is evident from the results of the GST collections, which shows more and more transactions taking place within the system,” he added. Jaitley said the government has collected Rs 92,283 crore as Goods and Services Tax (GST) revenue for the first month of its roll-out, exceeding the target, while 21.19 lakh taxpayers are yet to file returns. Thus, the July collections target have been met with only 64 per cent of compliance. “The next object of demonetisation is that digitisation must expand, which climaxed during demonetisation and we are trying to sustain that momentum even after remonetisation is completed. Our aim was that the quantum of cash must come down,” Jaitley said. He noted in this regard that RBI reports that the volume of cash transactions had reduced by 17 per cent post-demonetisation. A Finance Ministry reaction to the RBI report said a significant portion of the scrapped notes deposited “could possibly be representing unexplained/black money”. “Accordingly, ‘Operation Clean Money’ was launched on 31st January 2017. Scrutiny of about 18 lakh accounts, prima facie, did not appear to be in line with their tax profile. These were identified and have been approached through email/sms. “Jaitley slammed his predecessor P. Chidambaram for his criticism of the note ban, saying those who had not taken a single step against black money were trying to confuse the objectives of the exercise with the amount of currency that came back into the system. The Finance Ministry said transactions of more than three lakh registered companies are being scrutinised, while one lakh companies have been “struck off the list”. “The government has already identified more than 37,000 shell companies which were engaged in hiding black money and hawala transactions. The Income-tax Directorates of Investigation have identified more than 400 benami transactions up to May 23, 2017, and the market value of properties under attachment is more than Rs 600 crore,” it said. “The integration of the informal with the formal economy was one of the principle objectives of demonetisation,” Jaitley said. He also said that demonetisation had dealt a body blow to terrorist and Maoist financing that was evident from the situation on the ground in Chhattisgarh and Jammu and Kashmir. One thing is for sure: more and more of gobbledygook is to follow.

One of the major offshoots of the demonetisation drive was a push towards a cashless, digital economy. Looking at the chart below, where there is presented the quantum of cashless transactions in some of the major economies of the world…one could only see India’s dismal position. Just about 2% of the volume of economic transactions in India are cashless.

12052016-Volume-equitymaster

Less cash would mean less black money…less corruption…and more transparency. Is it? Assuming it is, how far the drive would go on driving? But was India really ready to go digital? There were 5.3 bank branches per one lakh Indians in rural India 15 years ago. On the eve of demonetization, the figure stood at 7.8 bank branches per one lakh Indians. This shows that a majority of rural India has very little access to banks and the organized financial sector. They rely heavily on cash and the informal credit system. Then, we have just 2.2 lakh ATMs in the country. For a population of over 1.2 billion people, that’s a very small number. And guess what? A majority of ATMs are concentrated in metros and cities. For instance, Delhi has more ATMs than the entire state of Rajasthan. Given the poor penetration of banks and formal sector financial services in rural India, Modi’s cashless economy ambitions were always a distant dream. Then there are issues of related to security. Were the banks and other financial institutions technologically competent to tackle the security issues associated with the swift shift towards a digital economy? Can the common man fully trust that his hard earned money in the financial system will be safe from hackers and fraudsters? And the answer does not seem be a comforting one!

“Those dealing in cash currency have now been forced to deposit these in banks, the money has got identified with a particular owner” So surveillance was the reason. Makes sense why they are so desperate to link aadhaar to bank accounts. Some researchers have considered couple of factors which have actually caused demonetization in India. First one includes the refinancing of public sector banks in India. 80% of banks in India are run by government, during the last two decades these banks have been used to lend out loans to corporations which stink of cronyism. These politically-affiliated businesses did not pay back their money which has resulted into the accumulation of huge amount of non-performing assets (NPAs) within these banks. From last three years warning signals were continuously coming about their collapse. Through demonetization millions of poor people have deposited their meagre sums within these banks which have resulted into their refinancing, so that they can now lend the money to the same guys who earlier do not paid back their loans. sounds pretty simplistic, right? Sad, but true, it is this simple. The second factor is the influence of technological and communications companies on the government, as these companies are among the fastest growing ones during the last two decades. Making payments through digital gate ways will be very beneficial for their growth. They can expand their influence over the whole human race. The statements from technological giants like Apple, Microsoft, MasterCard, Facebook, Google etc. clearly shows their intentions behind cashless society. Tim Cook the chief executive of Apple said that “next generation of children will not know what money is” as he promotes “apple pay” as an alternative. MasterCard executives consider apple pay as another step towards cashless society. MasterCard is mining Facebook users data to get consumer behaviour information which it can sell to banks. Bill gates said India will shift to digital payments, as the digital world lets you track things quickly. The acquisition of artificial intelligence companies by Google, Facebook and Microsoft is also on its peak. Over 200 private companies using AI algorithms across different verticals have been acquired since 2012, with over 30 acquisitions taking place in Q1 of 2017 alone. Apple acquired voice recognition firm “Vocal IQ and real face Google has acquired deep learning and neural network, Facebook acquired Masquerade Technologies and Zurich Eye. So what is actually going on, as private corporations and governments are desperate to introduce cashless economy through biometric payment system.

No black money was unearthed by Modi’s historic folly. Terrorism has also not gone down after demonetization and neither has circulation of counterfeit currency. So, it was a failure on all counts, a point that has been predicted by economists worldwide. What the note ban did was cause untold suffering and misery to common people, destroy livelihoods of millions of wage workers, caused bankruptcy to farmers because prices of their produce crashed and disrupted the economic life of the whole country. The only people who benefited from the note bandi were companies that own digital payment systems (like PayTM, MobiKwik etc.) and credit card companies. It also seems now that ultimately, the black money owners have benefited because they managed to convert all their black wealth in to white using proxies.

Fiscal Responsibility and Budget Management (FRBM) Act

The Government appointed a five-member Committee in May 2016, to review the Fiscal Responsibility and Budget Management (FRBM) Act and to examine a changed format including flexible FRBM targets. The Committee formation was announced during the 2016-17 budget by FM Arun Jaitely. The Panel was headed by the former MP and former Revenue and Expenditure Secretary NK Singh and included four other members, CEA Arvind Subramanian, former Finance Secretary Sumit Bose, the then Deputy Governor and present governor of the RBI Urjit Patel and Nathin Roy. There was a difference of opinion about the need for adopting a fixed FRBM target like fiscal deficit, and the divisive opinion lay precisely in not following through such a fixity in times when the government had to spend high to fight recession and support economic growth. The other side of the camp argued it being necessary to inculcate a feeling of fiscal discipline. During Budget speech in 2016, Mr Jaitley expressed this debate:

There is now a school of thought which believes that instead of fixed numbers as fiscal deficit targets, it may be better to have a fiscal deficit range as the target, which would give necessary policy space to the government to deal with dynamic situations. There is also a suggestion that fiscal expansion or contraction should be aligned with credit contraction or expansion, respectively, in the economy.

The need for a flexible FRBM target that allowed higher fiscal deficit during difficult/recessionary years and low targets during comfortable years, gives the government a breathing space to borrow more during tight years. In it report submitted in late January this year, the committee did advocate for a range rather than a fixed fiscal deficit target. Especially, fiscal management becomes all the more important post-demonetisation and the resultant slump in consumption expenditure. The view is that the government could be tempted to increase public spending to boost consumption. but, here is the catch: while ratings agencies do look at the fiscal discipline of a country when considering them for a ratings upgrade, they also look at the context and the growth rate of the economy, so the decision will not be a myopic one based only on the fiscal and revenue deficits.

Fiscal responsibility is an economic concept that has various definitions, depending on the economic theory held by the person or organization offering the definition. Some say being fiscally responsible is just a matter of cutting debt, while others say it’s about completely eliminating debt. Still others might argue that it’s a matter of controlling the level of debt without completely reducing it. Perhaps the most basic definition of fiscal responsibility is the act of creating, optimizing and maintaining a balanced budget.

“Fiscal” refers to money and can include personal finances, though it most often is used in reference to public money or government spending. This can involve income from taxes, revenue, investments or treasuries. In a governmental context, a pledge of fiscal responsibility is a government’s assurance that it will judiciously spend, earn and generate funds without placing undue hardship on its citizens. Fiscal responsibility includes a moral contract to maintain a financially sound government for future generations, because a First World society is difficult to maintain without a financially secure government.

But, what exactly is fiscal responsibility, fiscal management and FRBM. So, here is an attempt to demystify these.

Fiscal responsibility often starts with a balanced budget, which is one with no deficits and no surpluses. The expectations of what might be spent and what is actually spent are equal. Many forms of government have different views and expectations for maintaining a balanced budget, with some preferring to have a budget deficit during certain economic times and a budget surplus during others. Other types of government view a budget deficit as being fiscally irresponsible at any time. Fiscal irresponsibility refers to a lack of effective financial planning by a person, business or government. This can include decreasing taxes in one crucial area while drastically increasing spending in another. This type of situation can cause a budget deficit in which the outgoing expenditures exceed the cash coming in. A government is a business in its own right, and no business — or private citizen — can thrive eternally while operating with a deficit.

When a government is fiscally irresponsible, its ability to function effectively is severely limited. Emergent situations arise unexpectedly, and a government needs to have quick access to reserve funds. A fiscally irresponsible government isn’t able to sustain programs designed to provide fast relief to its citizens.

A government, business or person can take steps to become more fiscally responsible. One useful method for government is to provide some financial transparency, which can reduce waste, expose fraud and highlight areas of financial inefficiency. Not all aspects of government budgets and spending can be brought into full public view because of various risks to security, but offering an inside look at government spending can offer a nation’s citizens a sense of well-being and keep leaders honest. Similarly, a private citizen who is honest with himself about where he is spending his money is better able to determine where he might be able to make cuts that would allow him to live within his means.

Fiscal Responsibility and Budget Management (FRBM) became an Act in 2003. The objective of the Act is to ensure inter-generational equity in fiscal management, long run macroeconomic stability, better coordination between fiscal and monetary policy, and transparency in fiscal operation of the Government.

The Government notified FRBM rules in July 2004 to specify the annual reduction targets for fiscal indicators. The FRBM rule specifies reduction of fiscal deficit to 3% of the GDP by 2008-09 with annual reduction target of 0.3% of GDP per year by the Central government. Similarly, revenue deficit has to be reduced by 0.5% of the GDP per year with complete elimination to be achieved by 2008-09. It is the responsibility of the government to adhere to these targets. The Finance Minister has to explain the reasons and suggest corrective actions to be taken, in case of breach.

FRBM Act provides a legal institutional framework for fiscal consolidation. It is now mandatory for the Central government to take measures to reduce fiscal deficit, to eliminate revenue deficit and to generate revenue surplus in the subsequent years. The Act binds not only the present government but also the future Government to adhere to the path of fiscal consolidation. The Government can move away from the path of fiscal consolidation only in case of natural calamity, national security and other exceptional grounds which Central Government may specify.

Further, the Act prohibits borrowing by the government from the Reserve Bank of India, thereby, making monetary policy independent of fiscal policy. The Act bans the purchase of primary issues of the Central Government securities by the RBI after 2006, preventing monetization of government deficit. The Act also requires the government to lay before the parliament three policy statements in each financial year namely Medium Term Fiscal Policy Statement; Fiscal Policy Strategy Statement and Macroeconomic Framework Policy Statement.

To impart fiscal discipline at the state level, the Twelfth Finance Commission gave incentives to states through conditional debt restructuring and interest rate relief for introducing Fiscal Responsibility Legislations (FRLs). All the states have implemented their own FRLs.

Indian economy faced with the problem of large fiscal deficit and its monetization spilled over to external sector in the late 1980s and early 1990s. The large borrowings of the government led to such a precarious situation that government was unable to pay even for two weeks of imports resulting in economic crisis of 1991. Consequently, Economic reforms were introduced in 1991 and fiscal consolidation emerged as one of the key areas of reforms. After a good start in the early nineties, the fiscal consolidation faltered after 1997-98. The fiscal deficit started rising after 1997-98. The Government introduced FRBM Act, 2003 to check the deteriorating fiscal situation.

The implementation of FRBM Act/FRLs improved the fiscal performance of both centre and states.

The States have achieved the targets much ahead the prescribed timeline. Government of India was on the path of achieving this objective right in time. However, due to the global financial crisis, this was suspended and the fiscal consolidation as mandated in the FRBM Act was put on hold in 2007- 08.The crisis period called for increase in expenditure by the government to boost demand in the economy. As a result of fiscal stimulus, the government has moved away from the path of fiscal consolidation. However, it should be noted that strict adherence to the path of fiscal consolidation during pre crisis period created enough fiscal space for pursuing counter cyclical fiscal policy.the main provisions of the Act are:

  1. The government has to take appropriate measures to reduce the fiscal deficit and revenue deficit so as to eliminate revenue deficit by 2008-09 and thereafter, sizable revenue surplus has to be created.
  2. Setting annual targets for reduction of fiscal deficit and revenue deficit, contingent liabilities and total liabilities.
  3. The government shall end its borrowing from the RBI except for temporary advances.
  4. The RBI not to subscribe to the primary issues of the central government securities after 2006.
  5. The revenue deficit and fiscal deficit may exceed the targets specified in the rules only on grounds of national security, calamity etc.

Though the Act aims to achieve deficit reductions prima facie, an important objective is to achieve inter-generational equity in fiscal management. This is because when there are high borrowings today, it should be repaid by the future generation. But the benefit from high expenditure and debt today goes to the present generation. Achieving FRBM targets thus ensures inter-generation equity by reducing the debt burden of the future generation. Other objectives include: long run macroeconomic stability, better coordination between fiscal and monetary policy, and transparency in fiscal operation of the Government.

The Act had said that the fiscal deficit should be brought down to 3% of the gross domestic product (GDP) and revenue deficit should drop down to nil, both by March 2009. Fiscal deficit is the excess of government’s total expenditure over its total income. The government incurs revenue and capital expenses and receives income on the revenue and capital account. Further, the excess of revenue expenses over revenue income leads to a revenue deficit. The FRBM Act wants the revenue deficit to be nil as the revenue expenditure is day-to-day expenses and does not create a capital asset. Usually, the liabilities should not be carried forward, else the government ends up borrowing to repay its current liabilities.

However, these targets were not achieved because the global credit crisis hit the markets in 2008. The government had to roll out a fiscal stimulus to revive the economy and this increased the deficits.

In the 2011 budget, the finance minister said that the FRBM Act would be modified and new targets would be fixed and flexibility will be built in to have a cushion for unforeseen circumstances. According to the 13th Finance Commission, fiscal deficit will be brought down to 3.5% in 2013-14. Likewise, revenue deficit is expected to be cut to 2.1% in 2013-14.

In the 2012 Budget speech, the finance minister announced an amendment to the FRBM Act. He also announced that instead of the FRBM targeting the revenue deficit, the government will now target the effective revenue deficit. His budget speech defines effective revenue deficit as the difference between revenue deficit and grants for creation of capital assets. In other words, capital expenditure will now be removed from the revenue deficit and whatever remains (effective revenue deficit) will now be the new goalpost of the fiscal consolidation. Here’s what effective revenue deficit means.

Every year the government incurs expenditure and simultaneously earns income. Some expenses are planned (that it includes in its five-year plans) and other are non-planned. However, both planned and non-planned expenditure consists of capital and revenue expenditure. For instance, if the government sets up a power plant as part of its non-planned expenditure, then costs incurred towards maintaining it will now not be called revenue deficit because it is towards maintaining a “capital asset”. Experts say that revenue deficit could become a little distorted because by reclassifying revenue deficit, it is simplifying its target.

 

access to reserve funds. A fiscally irresponsible government isn’t able to sustain programs designed to provide fast relief to its citizens.

100 Days of #Demonetization. Citizens’ Protest on 19th February 2017.

demonetization-poster

The highs of demonetization when the Government can’t be LYING low.

Countering the Economic Emergency imposed ON the people. 
The Government has redefined Democracy, A form of Government BY the people, FOR the people, OF the people and crucially, ON the people. Rather than democracy, Demonetization has shown what DEMONcracy is all about. Please join in huge numbers on the 19th February 2017 for a Citizens’ Protest and shout out to the Government that Enough is Enough. 

#Demonetization #100DaysofDemonetization #CitizensProtest #JantarMantar

 नोटबंदी के 100 दिन 

धरना और रैली

19 फरवरी, 2017, रविवार , 12 बजे से 

मंडी  हाउस  से जंतर मंतर तक 

जंतर मंतर पर जनसभा और सांस्कृतिक कार्यक्रम

इसमें कोई गुंजाईश नहीं कि पिछले 100 दिनों में भारतीय जनता आर्थिक आपदा से जूझ रही है. 8 नवंबर 2016 की रात को प्रधानमंत्री ने 500 और 1000 के नोटों का विमुद्रीकरण कर इनके चलन को अवैध घोषित कर दिया और दावा किया कि इससे कालाधन पर रोक लगेगा, कर चोरी रुकेगी, आतंकवादी गतिविधियों के फंडिंग पर रोक लगेगी और जाली नोटों पर लगाम लगेगा. जिनके पास ये नोट थे, उन्हें जमा करने के लिए करीब 2 महीनों की मुहलत दी गयी और निकासी के लिए  भारतीय रिजर्व बैंक ने कई स्तर की सीमाबद्धता निर्धारित कर दी. भारतीय अर्थव्यवस्था जो मुख्य रूप से नकदी पर आधारित है और इसमें भी एक बड़ी तादाद ऐसे लोगों का है जिसे इस पूरे आर्थिक तंत्र से बाहर कर दिया गया है, वह केवल और केवल नकदी मुद्रा पर निर्भर है. यह गुहार किया गया कि “फौरी तौर पर थोड़ी तकलीफ सह लें” क्योंकि यह देश की सेहत के लिए बहुत जरूरी है. प्रधान मंत्री का यह आह्वान था कि इस “तात्कालिक मुसीबत” को झेल लेने से भारतीय अर्थ व्यवस्था की सारी बीमारियाँ ठीक हो जायेंगी.

लेकिन हुआ क्या? पूरे देश की जनता अपने बचत को जमा करने और नोट बदलवाने के लिए बदहवास बैंकों की कतारों में लगने को मज़बूर हुई. नए नोटों के लिए लम्बी और अंतहीन कतारों में लोग लगे रहे. इन कतारों में कई लोगों की जानें चली गयीं, बीमारों का समय पर इलाज़ नहीं हो पाया, सामाजिक कार्यक्रम जैसे शादी और मैयत के लिए लोगों को दर-दर की ठोकरें खानी पड़ी और ताने ये दिया जा रहा था यह कि देश की सरहद पर हमारे सैनिक अपना खून देकर आपकी रक्षा कर रहे हैं, और आप थोड़ी तकलीफ नहीं झेल सकते? पर उनका क्या जिनका किसी बैंक में खाता तक नहीं है. या उनका क्या जो बैंक या एटीएम से काफी दूरी पर हैं,वो अपना  नोट कैसे बदलवायें? उन लोगों का क्या जो अपनी छोटी-छोटी बचत को जमा करने के लिए अपनी दिहाड़ी छोड़ कर दिन भर कतारों में लगे रहे? उन महिलाओं का क्या जो बड़ी मेहनत और जतन से किसी विपदा के लिए वर्षों से कुछ बचा कर रखीं थीं? उन करोड़ों रुपयों का क्या जो कोआपरेटिव बैंकिंग सिस्टम में बचत कर के रखा गया था, जो अभी भी मुख्यधारा के बैंकिंग तंत्र से कोसों दूर हैं, लेकिन ये कई राज्यों में  करोड़ों लोगों के पैसे को हिफाज़त से रखते हैं? जो लोग इस मुसीबत को झेल रहे थे, मालूम हैं उनके लिए पी.एम. मोदी का समाधान क्या था? 9 नवंबर को लगभग तमाम अखबारों में विज्ञापन दिखा “अभी एटीएम नहीं पेटीएमकरो”

ऐसी क्या मज़बूरी थी कि सरकार यह नहीं बताना चाह रही थी कि अस्थाई मुसीबतें कैसे हमारे जीवन को, आजीविका को और अनौपचारिक क्षेत्र की अर्थव्यवस्था को स्थाई रूप से तबाह कर देगी . सरकार को पता होना चाहिए था  थ कि इस कदम के लिए न तो आरबीआई और ना ही बैंक पूरी तरह से तैयार थे, और यह कदम उल्टा पड़ सकता था. प्रधानमंत्री को यह निश्चित तौर पर मालूम था कि इससे कालाधन पर रोक नहीं लगेगा. अमेरिका-मेरिल लिंच बैंक के एक अध्ययन के मुताबिक अनुमान है कि सकल घरेलू उत्पाद में 25 % धन काली अर्थव्यस्था का है और इसमें महज 10 प्रतिशत हिस्सा ही नकद रूप में है. यानी कि 90 फ़ीसदी कालेधन का कभी भी नकदी के रूप में प्रयोग  नहीं रहा.  यह सच्चाई श्रीमान मोदी, श्रीमान जेटली और श्रीमान शाह अच्छी तरह जानते थे. आखिर क्या वजह है कि सरकार उसी जनता से लगातार झूठ बोल रही है, जिसके वोट से ये सत्ता में आये हुए हैं. आखिर किसके हितों को इस नोटबंदी के जरिये साधा गया.

जहाँ तक जाली नोटों का सवाल है, RBI का आंकड़ा दिखाता  है कि करीब 90.26 अरब भारतीय मुद्रा के नोट 2015-16 में चलन में थे, इसमें से मात्र 0.0007% ही जाली नोट थे. 2015-16 में इन नोटों का कुल मूल्य मात्र 29.64 करोड़ रुपये था जो कुल चलन में 16.41 लाख करोड़ रुपये का महज .000018 फ़ीसदी ही है. नोटबंदी का वास्तविक असर जैसा कि ढिंढोरा पीटा जा रहा था, बहुत ही आंशिक रहा . पुरानी कहावत  है कि “एक चूहे को पकड़ने के लिए पूरे घर को जला दिया गया”. इस नोटबंदी के पीछे यह भी तर्क दिया गया कि इससे देशद्रोही गतिविधियों के लिए फंडिंग रुकेगी. लेकिन क्या आज तक एक भी उदहारण देखने को  मिला जिससे कि आतंकवादी गतिविधियों में कोई रुकावट आयी हो? यदि कुछ प्रभाव पड़ा भी तो महज क्षणिक ही प्रभाव रहा जबतक कि नए नोट बदल नहीं लिए गए. नए  2000 और 500 के नोट पुराने 1000 और 500 के  नोट से कहीं ज्यादा देशद्रोही गतिविधियों के लिए माकूल हैं. तमाम गतिविधियों में नकदी का चलन बहुत छोटा हिस्सा है, यह ना तो आतंक का प्रेरणा स्रोत है और ना ही आतंकवादी गतिविधियों का मूल कारण. केवल एक ही दहशतगर्दी दिखी, वह थी सरकार द्वारा देश की जनता पर चलाई गई आर्थिक दहशतगर्दी.

आखिर यह पूरी कवायद क्या थी. हम भारत के लोग, पूरी शिद्दत के साथ अपनी आवाज बुलंद करते हैं कि हमें किसी अतिमानव (सुपर हीरो) की जरूरत नहीं जो अलोकतांत्रिक ढंग से काम करता हो और हमें सपने दिखाता  हो, और सपने बेच कर हमें उल्लू बनाता हो. हमें जनपक्षीय सरकार की जरूरत है ना कि कॉर्पोरेटपरस्त आर्थिक आपदा की. हम इस प्रकार के किसी भी आर्थिक और राजनीतिक  विमुद्रिकरण को अस्वीकार करते हैं, और पूरी शिद्दत के साथ मांग करते हैं कि हमें पारदर्शी और जवाबदेह सरकार चाहिए जो वर्त्तमान सरकार के कुतर्क तर्क और झूठे दावे “हमें मालूम है लोगों को क्या चाहिए” को पलट दे. हम आधार स्कीम के तहत सरकार के तानाशाही और दमघोंटू मुहिम का पुरजोर विरोध करते हैं और मांग करते हैं कि इस मुहिम पर तत्काल प्रभाव से राजनीतिक और न्यायिक दखल कर रोक लगाई जाय. हम मांग करते हैं कि सरकार नोटबंदी पर श्वेतपत्र जारी करे कि लोगों की जिंदगी और उनके आजीविका पर कितना प्रभाव पड़ा है और इसका तुरंत हर्जाना दे. हम मांग करते हैं कि कॉर्पोरेट द्वारा “कैशलेस” मुहिम को तत्काल वापस लिया जाय.

Indian people have undergone nothing less than an Economic Emergency for the last 100 days. On the midnight of 8/11/16, in a single pronouncement, the Prime Minister of India made higher denominations of Rs. 500 and Rs. 1000 illegal tender under the pretense of curbing black money, arresting tax evasion, stopping funding of terrorist activities and counterfeiting of currency. Those who had these notes were given a time frame of less than 2 months to deposit them and withdraw new denominations in different slabs of limits set by the RBI. The Indian economy, which is predominantly cash based and the Indian people, a great section of who are financially excluded, existing solely on hard currency, would somehow have to manage through this ‘temporary crisis’ for the greater good of the nation. This was the call of the Prime Minister to undergo ‘temporary hardships’ to root out the ills of the Indian Economy.

And so what happened? The country panicked and people rushed to banks to deposit their cash savings, exchange high denominations and lines formed. Long lines, winding unending lines full of people waiting to deposit and get new notes. People died in those lines, many patients could not get timely medical help, many social functions – marriages and burials got drowned in questions of “why cant you suffer a little for the country, when soldiers are giving their blood in the borders to protect you”. But what about people who never had a bank account? Or those too far away from a branch or ATM to withdraw or exchange? Or those whose earnings were so marginal that they could not spare losing a day’s work waiting in lines? Or women who had painstakingly collected money for emergency over many years? What about those crores of rupees that was saved through co-operative banking system, still far away from the mainstream banking operations – but was safeguarding the money of crores of people in many states? Modi’s solution for those suffering was clearly evident on the morning of the 9th, plastered on almost every major newspaper “abhi ATM nahin, Paytm Karo.”

What the government did not tell us was that these temporary hardships would leave a permanent damage on lives, livelihoods and disturb a major chunk of the informal economy. The Government should have known that with underprepared RBI and unprepared banks, the move was bound to backfire. In retrospect, the Prime minister surely knew that demonetization wasn’t about black money; it wasn’t about funding the terrorists; and it certainly wasn’t about counterfeit currency.  A study done by Bank of America-Merill Lynch estimates black economy at 25% of GDP and quantifies the cash component at 10% of the above. Hence, 90% of black wealth was never in cash. A fact that was well known to Mr. Modi, Mr. Jaitley and Mr. Shah. Why did the Government then lie to the citizens of India who voted them to power? Whose interest are being pushed through demonetization?

As for counterfeiting, RBI data shows that, of the 90.26 billion Indian currency notes in circulation in 2015-16, only 0.0007%, were detected as fake. The value of these fake notes in 2015-16 was Rs 29.64 crore, which is 0.0018 per cent of the Rs 16.41 lakh crore currency in circulation. The actual impact of demonetization is then so marginal that the ideology behind its application can best be captured by the old saying, “burning down the house to catch a mouse.” Seditious funding was also given as a reason for demonetization, but did we ever hear of any examples of how terrorism was halted by this move? Even if there was any impact, it can only have been temporary, until new cash replaced the old! The new Rs.2000 and Rs.500 note is as seditious as the old Rs.1000 and Rs.500 note then! Cash is merely one of many conduits; it is neither the source, the motivation nor the act of terrorism. The only act of terrorism seems to be by the government in economically terrorizing the entire population of the country.

So, what exactly was the drive for? We, the people of India, affirm that we do not need a superhero, who does not act democratically and instead is all about weaving and selling dreams. We need people oriented governance and not corporate driven economic emergency. We reject the economic and political premises of demonetization and affirm that a transparent and accountable government is required to replace the current logic of ‘we know what is good for the people’. We reject in totality the authoritarian drive to push the UID/Aadhar scheme down people’s throats and demand political and judicial intervention to stop the drive immediately. We demand that the government produce a white paper on the impacts of demonetization on people’s lives and livelihoods and compensate for the lives and livelihoods. We demand that the corporate driven ‘cashless’ economy plan be immediately withdrawn.