Demonetisation and its aftermath

The arrows from Modi’s quiver seldom fail to stun and stultify the targeted group. And this latest one that quaked the citadels of real estate sharks, practitioners of Azhagiri formula (to win elections, two or three crisp 1000 Rupees notes in a cover given to families according to the number of votes they command), even hospitals and educational institutions, had his distinct characteristics: surprise element, determination once he is convinced to implement policies and squarely face the consequences. The tremors set forth by his announcement of 8^th November can still be felt across segments inured to the power of unaccounted money and may take months to subside.

And the opposition, as horses run true to form, gravitated to the singular objective of villainising him. And they did what we are so familiar with since the day Modi took over as PM. They held the functioning of the Parliament to ransom.

The congenital disease with the opposition to stall the Parliament at the drop of the hat is undemocratic and undermines the very democracy that entitles them to a plethora of perks and privileges that would make even an American Senator blush with envy. But ever since the day the High Court decided to insist on personal appearance of the mother and son duo of the Congress’ first family in the National Herald case, the equating of personal interests with those of the nation had well and truly begun and obstructing the functioning of the Parliament baptised that day has been pursued with derelict abandon till the mid-term of this Parliament session. This time around, the fig leaf is demonetisation, but if you look back every session has been afflicted for some reason or the other, the raging issue to be forgotten and buried the moment the session got over. Every session, they seem to be clutching at any issue at all to relegate Parliamentary duty to the sidelines. The overall objective is effectively to thwart any legislative work. This obduracy in turn can be traced to the refusal of certain elite groups and political parties yet to concede functional space to the PM and come to terms with the electoral verdict.

In the current post-demonetisation session, God knows, there is ample ammunition available to the opposition to corner the Government and make the treasury benches sweat simply with the third page news items of the day’s news paper, replete with tales of serpentine queues, denial of medical treatment at hospitals, imminent starvation of daily wage earners in cities and hinterland and of workers in far flung tea/coffee estates etc – but the opposition is comfortable with filibustering and has substituted serious discussion and debate with boyish rambunction.

Nothing exemplifies more the chicanery of the Indian politicians than finding the Communists, putative protectors of proletariat, in the egregious ensemble of opponents of demonetisation, a motley crowd they (the Communists) would have in different circumstances christened as a mob of money bags, leeches, fat cats and other choice epithets from the prodigious Marxian repertoire of abuses. Or perhaps they fell in line because perpetuation of privation paves the ideal circumstances for the revolution, in the same way, as a Marxian story goes, one comrade prevented the other from giving alms to a beggar because that would delay the revolution.

Communists who pride themselves that their coffers contain more coins than wads of notes could have, sensing the adverse impact on vulnerable sections, in an out-of-the box initiative, instantly liaised with big ticket retailers like Big Bazaar, More, Reliance Fresh etc. and arranged for supply of essentials at far flung tea/coffee Estates, at the factories or even at the residences of the workers against payment (representing a portion of wages) by cheque or electronic means by the Management. Or, by insisting on issue of coupons like Sodexo by the Managements to the workers exchangeable for essentials at local stores. The overriding motive transpires to be aggravation rather than alleviation.

And in the melee, the distinguished Professor Amartya Sen shoehorns himself accusing the Government of having failed to honour the promise RBI had made on the Rupee notes to pay the bearer the value of the denomination. While one has to be remarkably naive to expect anything flattering from the Laureate who exhorted Indians not to vote for Modi, how the simplest of distinctions could escape the erudite Professor is beyond one’s ken: if one deposits one lakh Rupees of demonetised notes in one’s account with a bank, the account gets credited with Rupees one lakh, not a paise less. Now, one can buy jewellery worth one lakh from say, Tanisq, using one’s debit card. One can buy a fancy mobile, an LEE TV from Flipkart; what is denied one is not the value but exchange of the amount into smaller denominations, an inconvenience hopefully ephemeral. Prejudice blinds and antipathy blinds absolutely.

This is an emergency they scream. Now, demonetisation is a fait accompli. There is no turning the clock back. An emergency is precisely the occasion for the politicians of all hues to heed the call of the hour and put the heads together as how to extricate the vulnerable sections with as little pain as possible. Instead, the opposition’s choice is to watch gleefully the discomfiture of the Government from the sidelines. Not a single suggestion, not a single constructive solution, not a single meaningful dialogue. And a former FM joins the league of critics but his famed wizardry did not engender a single worthwhile idea as to what can be done now to mitigate the hardships, alleviate the pain. In sum, vituperation, insouciance and an opportunistic urge to cash in on the impasse inform the conduct of the opposition.

The Government has been criticized for quotidian changes in the limits of money one can draw from one’s account with a bank. Leave alone it would be asinine to stick to consistency in protean circumstances, such changes only reflect the Government is dynamic, alive to the problem and reviews the situation every day and puts in place policy measures according to the needs of the hour.

Having said this, one has to recognise that proper assessment of the impact and putting in place mitigative measures is sine qua non of any initiative of this magnitude.

There can be no two opinions about the laudable objective and urgent necessity of the initiative to curb black money. India would fabulise forever in eulogistic terms anyone who slays the demon of corruption and liberate the masses from the thrall of venal officialdom. But then India is a predominantly cash driven economy. When you try to do with 14% what you did earlier with 86%, far reaching ramifications and crippling disruption are inevitable.  A step of this enormity cannot but leave huge gaps unaddressed. Our ability lies in clearly identifying and alleviating them with minimum loss of time. And if past is any indication, our ability to anticipate and manage the aftermath of decisions affecting the entire country is anything but efficient.

In scenes eerily reminiscent of Grexit, visuals of people thronging ATMs and hopping from one to another and the lucky ones waving in triumph the new 2000 Rupee are the ones you are cloyed with the moment you switch on the news channels. Well into the second fortnight, the crowds have not abated, and banks dish out just a fraction of the amount one is entitled to  as they simply do not have adequate cash and need to ration out what is available with them. This should have the Government worried. Middle class and even lower middle class to a great extent now buy even groceries online. There is, however, a vast segment where only cash prevails. A realistic assessment of the impact would have, inter alia, devoted special attention to tourism, medical care, daily wage earners most of whom are migrants, mass employers like tea/coffee estates in far flung areas, MSMEs etc.

On the 9^th of November, for instance, there were moving scenes at Chennai Central Railway Station and Koyambedu inter-state bus depot. Travellers suddenly found themselves to be penniless in a strange city. A group of tourists from Malaysia stranded at Kodaikanal said they had become destitute overnight, unable to even afford food for the elderly. And they wondered how they would get to Trichy to take the return flight home. Disconcerting reports from hospitals are now par for the course. These include deaths because the family could not buy the medicine or buy blood from any blood bank. Even as a collateral damage, this is unacceptable, the death of an honest citizen who had money legitimately earned which could not get him blood, medical attention or a life saving drug, even as a stray incident, does not advance even a bit the cause unearthing and eradication of black money.

Market corrects itself, it has an inherent self-regulatory compulsion, we have been told. What market forces we were witness to were entirely predictable. Brokers who would accept old notes at a steep discount mushroomed. Employers including educational institutions compelled their staff to deposit old notes in their (staff) respective accounts and took care to take an IOU from them for the amount given. Many booked high cost AC I Class tickets with the Railways using old notes and cancelled them to take back good notes after deducting the cancellation charges, with the staff reportedly conniving. And so on and so forth. Ingenious ways are being constantly invented.    And on the bright side, there was also a report of a few restaurants offering free food to the stranded.

Arun Jaitley, man in the unenviable seat, is undoubtedly brilliant, impressively articulate but mastering the complex world of finance calls for certain intuitive flair, instinctive grasping, not robust intellect alone. The knotty intricacies and the extraordinary reach of finance have eluded him.

As for eradication of corruption, one has to admit the grim reality. Corruption, to borrow Dr. Radhakrishnan’s quote on Hinduism, is a way of life in India. It starts right at my door step. The construction site around the corner has dumped sand and gravel halving the width of the road and the municipal guys have been taken care of. The apartments down the road have authorisation only to build three floors but have built five (with attendant strain on water, electricity and road use) with authorities having been taken care of. Apartments are to be on stilts the ground floor serving as parking space, but parking space is absent and you find flats on the ground floor, with private vehicles permanently parked on public space, the authorities looking the other way. This has to be logically extended to every single sphere of life. Every politician as entitled by his place in the hierarchy is recipient of hafta, be it from the street vendor or the eatery or the commercial establishment.

The pervasive nature of corruption is well captured in an illustrative story told of a reputed jeweller. A powerful politician is reported to have walked into the showroom, picked up a collection of expensive jewellery and then tried to walk off majestically. He exploded when stopped, did they not know who he was. Alarm was sounded, the shutters were down and the jeweller was unmoved. After a fierce argument, the politician left the showroom sans the jewels. During the following days, the Jeweller is reported to have got visits from multifarious Government Departments, sales tax, commercial tax et al. Then the Municipal authorities read the riot act and served a closure notice because of non-observance of numerous regulations. The jeweller had to shut shop. Thereafter, he called the politician for peace talks, and during the polite negotiations, dialled a certain number on his mobile and handed over the mobile to the politician saying someone in Dubai would like to have a word with him (the politician). The shop not only opened the next day, no politician was sighted anywhere in the vicinity of the shop since then. This story academically lays bare the actual state of affairs in India.

In sum, to eradicate black money, the politician has to change and given the parasitical nature of the politicians in India (barring several honourable exceptions, of course), that is asking for the moon. Unless, of course, we emulate Singapore and shed ‘the excesses of democracy.’ If the PM can ensure that an ordinary man is able to work and live and spend his life without having to pay bribe in any manner, he would have accomplished something truly revolutionary.