CONSULT DOMAIN -EXPERTS
Demonetisation is going its own way. There are no ifs, ands, buts about it. Mercifully, the poor are still being generous, giving the benefit of the doubt to the decision-makers. When the gains and losses are finally toted up, and if they come to realise that all that pain was not worth the candle, there could be a backlash both in economic and political terms.
The reason why demonetisation may have landed the country in a quandary is that not much homework was done before they decided to junk nearly 90% of the currency in circulation. Unilateralism is the bane of the NDA government. Even after making ample allowance for secrecy, there can be no excuse for abandoning meticulous planning. Self-assuredness degenerates into insouciance when officials fail to factor in all that needs to be factored in before dropping such a bombshell on people.
It is hard to believe that the decision was taken without consulting domain experts. A handful of officials could not possibly have anticipated the multifaceted troubles due to the famine of currency. Consider how various accredited foreign missions are raising Cain about cash crunch. A month after demonetisation if there is no cash for diplomatic missions in the capital city of India, it is damaging for the image of a country which seeks a place on the global high table.
In a way, the demonetisation move once again underlines the inherent quality within the government. If the Manmohan Singh PMO was completely powerless, a mere post-office and rubber stamp for decisions taken elsewhere, the current PMO has become all powerful. Frankly, a widespread view is that everyone else in the government is rendered a cipher while a handful of people in the PMO rule the roost.
Doubtless, there is an upside to a powerful PMO. Indecision and dithering of the UPA years has yielded to prompt decision-making. Also, implementation now carries the weight of the highest in the political executive. Yet, the heavy concentration of power in the PMO has negatives as well.
Recall how within months of becoming Prime Minister, Modi had sought to change the controversial land acquisition law. The move was well-intentioned. But unilateral nature of the decision eventually forced him on the back foot. False propaganda that the amendment was anti-farmer caused the retreat.
Now, in the case of demonetisation it is the critics’ turn to be dubbed anti-poor and pro-black money. This is the only reason why despite widespread distress, the Opposition has failed to strike a chord with the people.
Yet, when the window for conversion of old currency for new is finally shut on 30 December, and there may not be unearthing of sizable black money, the tables could be turned. Already, official spokespersons are beginning to concede that all illegal Rs 500 and Rs 1,000 notes in circulation might be accounted for. Which means that aside from faster digitisation of the economy, other gains could be illusory.
UNFULFILLED PRINT ORDER
No one in the government or outside knows how soon the cash crunch will end. The four security presses in Nashik, Dewas, Salboni and Mysuru, despite working round the clock, cannot meet the demand for replacing 23.1 billion pieces of illegal notes, at least not till the end of the year. Admittedly, they have the capacity to print the required quantity in a full year, but it will be well-nigh impossible for them to do so by the end of December. In fact, the RBI in its latest annual report says that the presses fell short of the intended supply in last three years. Therefore, it is surprising why the government has not commissioned foreign presses for supplying the currency notes. Why make it a matter of prestige?
CONMEN TO THE FORE
The arrest of Mahesh Shah, a minor Ahmedabad-based businessman, who had declared under the previous black money amnesty scheme a whopping Rs 13,680 crore, yet again underlines the propensity of Indians to make a fast buck by hook or crook. Having declared that incredibly high sum, Shah was going around asking businessmen and traders to avail his services at a hefty commission in case they had missed out on declaring their black money.
Meanwhile, the Mumbai-based family, which had declared Rs 2 lakh crore on four different PAN cards, has done the vanishing act. When the IT sleuths went looking, they found the house in one of the poorer quarters shuttered. Neighbours said they had gone missing a few weeks ago. Apparently, they had claimed, falsely, of course, that they were seeking to launder the donations amassed by a popular Sufi shrine.
Also, it turns out that a number of stores selling foreign luxury brands in a shopping mall virtually dedicated to them issued vouchers against illicit currency deposited in lakhs towards future purchases. Indeed, a couple of classy restaurants patronised by the rich and the famous did likewise.
There were also anecdotal evidence that hawala network exchanged voided notes with foreign currency at a hefty commission. For example, if you paid Rs 10 lakh in illicit notes, you could get foreign currency in Dubai worth Rs 8 lakh. We are good at jugaad, aren’t we?
INFLUENCE -PEDDLING
A senior Congress member of the Rajya Sabha from Uttar Pradesh recently invited a number of politicians, including NDA ministers, to, what he claimed, was the marriage of his son. And quite a few attended the grand party in his private house in south Delhi. But some of the VVIP guests were surprised on learning that the host did not have a son, having been blessed with two daughters.
Apparently, the marriage was of the son of a prominent Noida builder. Since there was a close nexus between the builder and the leader, the latter falsely claimed that his son was getting married in order to invite the VVIPs. Money makes people do all sorts of things, isn’t it?