Downside of the Demonetization

Published at October 12, 2017 12:06 AM 0Comment(s)612views


Downside of the Demonetization

The economy is in the state of bother, which is largely due to two reasons. First, it is well-known that new jobs are few and far between, and add to that those having jobs are losing them. Large banks like Yes Bank and HDFC have lain off thousands of their employees, creating an atmosphere of panic in urban areas. If there is a situation in the country wherein employed people are losing their jobs, which is called dis-employment, then this is a matter of concern. A few weeks ago, senior BJP leader Yashwant Sinha wrote an article in a daily newspaper, expressing his concern over slump in GDP growth over the period of six quarters. He wrote that the economic condition has become so fragile that it is in danger of being plunged into deeper crisis and stagnation. He questioned the wisdom and methods of implementing both demonetization and the GST.

Another senior BJP leader Arun Shourie, who served as a minister in the Atal Bihar Vajpayee cabinet, took exception to the government on its functioning, especially on its decision-making. It is common practice that decisions on important matters are made collectively with expert advice, but the government is bypassing this practice. He called the current government “ilham ki sarakar” (government of revelation), which means they got divine revelation that a particular thing should be done and they do it the next day they, without analyzing data or assessing the technique.

This is a serious allegation. If it is 12 o'clock in the day, we can have discussion whether it is time to have tea or breakfast or lunch, but we cannot discuss whether it is 12 o'clock in the day or not. The growth rate is in front of us. The Reserve Bank of India says 99 percent of the demonetized money has come back into the system. It is a proven fact, isn’t it? One cannot have debate over the fact that the RBI has received 99 percent of old currencies.

Similarly, let us look at the GDP figures. Recently, while talking to his supporters Prime Minister Narendra Modi answered many questions related to his government’s decisions. What I inferred from his talk is that there is urgent need to bring derailed democracy back on the track. He said that some people are creating an atmosphere of despair, for they would not have sound sleep if they would not do so. His attack was directed towards Yashwant Sinha and Arun Shourie.

However, he said two things. First, he admitted that the GDP has come down, though not for the first time. During the previous government also it fell in three quarters. It is beyond my grasp as to how the Congress has become yardstick for you? If it fell down during Congress’s rule, then it must also fall during yours! We believe that you came to power with the promise that you will provide good governance and do away with the wrongs done by the Congress in ten years. Now you are content with the fact that the GDP had fallen in three quarters during the Congress rule, and six times in your rule. This is absurd.

The second thing he admitted was that GST was posing problems to small businessmen and he was ready to look into their problems. To a great extent it is pleasing to note that he admitted that he is not omniscient. There are states with governments run by different parties; “we will sit together and find out a solution to it”. This is exactly how democracy functions.

Elections are integral to democracy. In last elections BJP got 282 seats, ten more than halfway mark, and become complacent that the Congress, the main opposition party, has become weak, while they forgot that weakness of the Congress does not make them stronger. Smaller parties have gained strength, though it is not good for the country, and does not make the central government any stronger. However, it is their conviction. Narendra Modi always talks of Congress-mukt Bharat. He should also reflect on his own party’s record. 2014 election was a free and fair election, which was held during the Congress rule, and the BJP got elected. What happened thereafter? Except Uttrakhand, Uttar Pradesh and Haryana they haven’t won a single state on their own. They did not get majority in Maharashtra, they lost in Bihar, in Haryana they got majority by one MLA. On the other hand their success in UP has raised many eyebrows.

Suppose the doubts cast on UP elections are baseless, then also what did you do in Uttarakhand? Instead of Congress-mukt Bharat you make it a Congress-yukt BJP. You take in all the Congressmen and changed their labels, and they are the people who are running the government. Till tomorrow they were corrupt and anti-development, today they are upright and virtuous. If that is the way BJP functions, then it is not good for the Constitution. Arvind Kejriwal’s becoming Delhi Chief Minister annoyed the BJP, and getting only three MLAs hurt the party a great deal more than that.

But, what did they do? Bassi was the police commissioner in Delhi. BJP encouraged him to take on Chief Minister Kejriwal. Is it proper for a police commissioner to have a run in with Chief Minister? If the commissioner had anything against him, he should have complained the Home Ministry. He came out publically saying he is ready to debate with the Chief Minister. The commissioner should have been sacked on this ground only. Had there been old governments, had there been Indira Gandhi’s government, they would have never tolerated such kind of things. Who is against government is the job of the government to see, the bureaucracy should do its own job. The prime minister’s speech has instilled some hope in me that he will correct the errors that his government has committed in three years. He said that he does not possess all the knowledge and those who disagree with me are not my enemies.

The BJP people believe that one who speaks against their government is a Congressman. They lampoon Rahul Gandhi by calling him “Pappu”. Yes, I am speaking against you, and I am from Janata Dal. We are the custodians of Morarji Desai, Charan Singh, Vishwanath Pratap Singh, Chandra Shekhar’s heritage. We were never in the Congress. Your maxim that if you are not with us, you are with the Congress is erroneous. You divided the country into two halves. People will not accept that. You do not recognize the danger. Even after your departure the country will remain intact, and will remain the country of everyone. I do not question your motive behind GST you must have done it with good intention. But people are suffering. You have an opportunity to assuage their pain. Therefore, I say that the Prime Minister probably felt for the first time that that was not the way to run affairs of the country. He was quite right when he said that he will hold talks with all the states.

In my opinion the threshold of GST should be increased from Rs 20 lakh to Rs 2 crore. Not doing so will pose two dangers: first, the business will suffer and second, the business will deal in cash transactions. There will be no way out for small businessman. After all he will not let himself die of hunger. Economics is complex, politics is easy, and jumlebazi is easier. We have been in politics. If someone will say something, he will get an answer. But merely answering will not make any difference. One kilo wheat will not become two kilos by my speech, will it? Similarly, delivering speeches will not increase GDP. For that effective steps need to be taken. Employment opportunities need to be increased. Unemployment will give rise to increase in crime. In olden days in Mumbai when textile mills shut down, the crime rate in the city increased manifold. Why? Because thousands of people employed in the mills rendered unemployed and they have no other means to make ends meet. How many police do you have to deal with anarchy? Governments fall under the weight of such anarchy.

I do not think the statements of Arun Shourie or Yashwant Sinha have given rise to the problems which beset the country. On the contrary, the existing problems have given rise to those statements. Resolve the problems their statements will no longer carry any meaning.

 

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