ONE by one the PM’s tall claims come undone – exposed as lies....

Is Note Ban A Surgical Strike On Black Money?

The PM’s speeches were initially full of ‘surgical strike on black money’. Then he began speaking more of ‘counterfeit currency’ and ‘terror funding’. Then his speeches became silent on black money and began claiming the main purpose of Note Ban was to make India a ‘cashless economy.’

  • Only 6% black money is in cash – the rest is in gold, land, real estate or foreign banks. The BJP itself had said this in 2014 when it opposed the UPA Government decision to demonetize currency notes printed before 2005 (see box). So Note Ban cannot really destroy black money.

  • 77 % of the total demonetized cash came back to the banking system by December 1. This means that almost 100% of the demonetized currency will be back in the system. Clearly, black money was not destroyed. Neither were black money holders caught and punished.

  • The Government has already set up a whitewash scheme (voluntary income disclosure scheme) for black money holders, just like there was prior to 8 November. So black money holders are not ruined at all.

In the 2014 elections, Modi’s ‘jumla’ was ‘bring back black money from foreign banks’ and ‘put Rs 15 lakhs in each Jan Dhan account.’ Post the 8 November Note Ban, ‘surgical strike on black money’ was the jumla. Now, it seems that black money is forgotten and “cashless economy” is the new jumla. What is the next one?

How Note Ban Has Hit Daily -Wage Workers

(Excerpt from a piece by Dhirendra K Jha, Scroll.in, Dec 13, 2016)

FOR a snapshot of how urban daily-wagers are dealing with the impact of demonetisation-induced joblessness, visit Shanti Nagar, a residential hub of labourers in Firozabad, an industrial town in Uttar Pradesh 200 km from New Delhi\ and known for its glass industry, particularly its famed glass bangles.

“For a few days after bad times hit us, we survived on our savings,” said Raeesa Begum, a bangle worker and mother of eight. “By the end of November, we had consumed almost all of our savings. So we sold our bhathhi [household gas furnace used for soldering the joints of bangles] for Rs 500. Now, we have started eating only one full meal a day.”

Apart from the bhathhi, Raeesa Begum has sold most of her household utensils, and on December 5, when this reporter last met her, she was looking for a buyer for the family’s sole bicycle.

 

Demonetised notes worth Rs 11 lakh crore returned till now

(Excerpt, SV Krishnamachari, International Business Times, December 1, 2016)

THE pace at which the demonetised notes are coming back to the banking system is raising a question: will the demonetisation drive result in a “surgical strike” on black money? A report by business news channel CNBC-TV18, citing government sources, says about Rs 11 lakh crore has returned to the system as of November 30, out of a total of Rs 14.18 lakh crore. Indians still have 30 more days to deposit the banned notes with banks.

The earlier speculation by analysts was that about Rs 2.5 to 3 lakh crore of these notes will never return and was seen as a windfall for the Reserve Bank of India (RBI) and ultimately, the government. However, those calculations could go awry if the trend till now as indicated by the CNBC-TV18 report is any indication.

Will Note Ban Eliminate Counterfeit Currency?

  • Former RBI Deputy Governor K.C. Chakrabarty pointed out, "If you buy a kilo of rice, there will be some small stones (interspersed). What you do is remove those particles and not the entire rice. The law enforcement authorities should identify those notes and take action. Here people are standing in the queues to get their own money because there are inefficiencies with the income tax (process), police machinery etc....”

  • According to a NIA-sponsored study by the Kolkata-based Indian Statistical Institute, fake Indian currency notes (FICN) are to the tune of Rs 400 crore, with as many fake 100 rupee notes as 500 rupee notes. Let’s assume that Rs 350 crore worth of FICN have become defunct. Was it worth spending Rs Rs 15000 crore of tax payers’ money and untold grief and suffering for people just to get rid of Rs 350 crore worth of FICN? And since the new notes have no enhanced security features, new FICN is bound to be generated soon. This is like mopping the floor with the tap on!

Terror Funding and Kashmir

What about the claims that demonetisation will smash terror funding or stone pelting stopped in Kashmir because terrorists can’t pay them Rs 500 anymore?

Well, the police of J&K claim that terrorists have been found with new Rs 2000 notes! The fact is,

  • Kashmiris pelt stones because they are angry – not because they’re paid. If the minds and hearts of each Kashmiri and a solution for the Kashmir problem could be bought for just Rs 500 each, surely the Kashmir problem would have been solved by now?

  • Making a joke of claims that Note Ban will end stone pelting in Kashmir, Note Ban has actually provoked Indians in other states to pelt stones! Angry crowds in queues have pelted stones at banks and ATMs in Malda in West Bengal and Bulandshahar in UP.

BJP U-Turn On Note Ban

MODI is saying that Indira Gandhi and previous Congress Governments were not ‘bold enough’ to take a decision to demonetize. But that is a deliberate untruth – in fact the BJP itself called demonetization ‘anti-poor’ when it was partially introduced by the RBI during the UPA tenure!

In 2014 when the RBI announced that currency notes printed before 2005 would be withdrawn, the BJP lashed out at that emasure – even though that move did not even come close to causing the chaos that the BJP Government’s has done.

BJP leader Meenakshi Lekhi then said:

“Because those who have black money, who live in the cities, or have the means, they will exchange the notes for new ones. But the poor, the aam aurat and aadmi, or the woman who has saved her husband’s money and kept it in an aata ke dabba or hidden in the dal or chawal, their lives will be affected.”

Lekhi said that those who keep their savings in US dollars and other foreign currencies would not be hurt, but those who kept their cash in rupees would be badly hurt. She declared that the move was “an unjustified attack on poor people” and demanded that the “RBI must publish a note on how many currency pieces will be affected, how many of these are in rural India, and estimate the impact of this measure on the poor. RBI must conduct a full and impartial inquiry into the impact this measure will have.”

How come partial demonetization is ‘anti-poor’ when UPA does it, but sweeping, sudden, secret demonetization causing palpable, lasting chaos and distress is ‘pro-poor’? Will the BJP agree for a “full and impartial enquiry” into the demonetization impact, or will it simply demand that we accept the findings of the farcical and biased Modi app survey?