A year ago, on 8th November 2016, Narendra Modi led BJP government took a decision to demonetize the currency of 500 & 1000 notes. The aim remains to thrash & curb the circulation of black money which persists in domestic market. It is also said that demonetization will act against terrorism by preventing the circulation of fake currency note printed “across the border”? This argument hinges crucially on the assumption that the technology employed in printing the new tender will prevent any possibility of faking it. The Demonetization of 86 percent of the currency of the country, a virtually unprecedented measure anywhere in the world, has brought immense hardship to the working people of the country, and has damaged their living standards permanently. Many however believed that it was a step being taken for the greater social good, for achieving certain important social goals.
A REALITY CHECK:- RBI report of this year said- “As of end- March 2016, Gross Non Performing Assests (GNPAs) of all Scheduled Commercial Banks (SCBs) are at Rs. 5, 60, 822 crore, 7.71% of their gross advances of Rs. 72,73,927 crore. In addition, the reconstructed failure standard advances are at Rs. 2,94,729 crore, 4.05% of the gross advances.
This means that more than Eight & half lakh crore rupees (Rs. 8,55,551 crore) of the loans given by our banks have not been returned by the borrowers.
At a public event on 1 July 2016, the Comptroller Auditor General (CAG) Shashi Kant Sharma is reported to have said, “There is a belief that a significant part of NPAs could be amounts fraudently obtained as advances from the banking system. There is also a belief that a large part of these amounts may have been transferred abroad & may never get recovered”. (Business Standard, 02 July)
Top ten corporate houses owe staggering amount of Rs. 7 lakh crores to Public Sector Banks (PSBs)
and Financial institutions. As per the RBI, the ratio of NPAs of banks is 19.3% as of March 2016, up from 0.7% in March 2015. Detail in below picture.
A legitimate question comes in- If someone bypasses the loan return procedure of PSBs, is that act not part of stacking black money & corruption? Yes it is. When it implies on common man, the same must be for ultra-rich of this country.
INDIRECT CAUTION NOTE TO FEW-
According to Indian statistical Institute (ISI), Kolkata, this figure came out.
April 2016 article of Times of India gives hint of moving high value currency to safe assets like land, gold, etc.
Three daily newspapers made this claim of currency ban months before.
“Akila”, Gujarati Daily Newspaper claimed ban 6 months before.
“Dainik Jagran”, a hindi Daily claimed ban on 12 days before.
The English Daily “Business Line” claimed 18 days before. This proves that ultra-rich popation of politicians, media house owners, rich corporates, big businessmen, real estate giants already knew about this step of demonetization.
Modi Govement keeps mum on steps which would surely hurt BIG PLAYERS of BLACK MONEY. They are as follows-
3. To maintain a strict & stringent tax administering system, cutting down tax exemptions which have been siphoned to certain big corporate houses which is no less than accumulation of primitive capital gains, black money. As per Former RBI Chief, Mr. Raghuram Rajan-“ effort should be more on tracking data & better tax administration to get at where money is not being declared.”
Black money is not there as a bundle of cash. It is in form of Participatory notes, Gold, antique piece, real estate land, etc. Cash only constitutes 6% of the black money, government sidelined this reality.
DEMONETIZATION, A FIASCO- HOW?
Banks have received Rs15.28 trillion ($239 billion), or 99% of the currency invalidated, according to RBIs. This data proves that demonetization was a total failure. http://www.livemint.com/Politics/eApQkuRxQHM95h2KM7732O/PM-Narendra-Modis-cash-ban-a-total-failure-as-99-of-bann.html
Mass Unemployment– About 1.5 million jobs were lost during January-April 2017. The currency ban badly affected the working class. https://www.cmie.com/kommon/bin/sr.php?kall=warticle&dt=2017-07-11%2011:07:31&msec=463
No Harm to Naxal Violence– Naxal violence continued unabated after demonetization. Claims of Union Minister Ravi Shankar Prasad, that Demonetization had broken the backbone of terrorists and naxals is an OPEN LIE.
Source: SATP data, Data till April 23rd from SATP site, 25 Sukma fatalities added manually
Source: SATP data, Data till April 23rd from SATP site, 25 Sukma fatalities added manually.
If eliminating black money was the intention, demonetization should have been the last step, not the first. The government should have taken more targeted measures on off-shore accounts, non-performing assets and benami transactions before it decided to steam-roll this ill-thought out measure on the whole population. This step crippled livelihood of 93% nation’s informal workforce. As an Indian, consider 8th November as a “Black Day”.