Derek O brian
Following the demonetisation disaster, the BJP government has been undertaking a propaganda war on its citizens, determined to prove that demonetisation and the currency shortage are being welcomed across the country. This is a make-believe world, inhabited by BJP politicians and spokespersons, who have no idea of life outside the Lutyens’ Delhi shakha and prime-time television studios. More and more, their rhetoric, their slogans and their bombastic numbers make no sense.
Slithering from one excuse to another – counterfeit currency one day, terrorism the next, black money now, less-cash economy then – the BJP team members have tried hard to justify the implosion of the badly thought-out and poorly executed demonetisation project.
Each of their statistical jumlas needs to be called out. So here are 12 straight, verified, non-jumla numbers – numbers you will never hear from BJP spokespersons and the government PR machinery, including at least some journalists and television anchors who now live and work in a plantation industry:
- Fake currency: Only 0.002 per cent of the total currency in circulation is counterfeit. This means: of every 10 lakh or one million currency notes in the system, only 250 are fake. This is a statistically insignificant number. It is important to weed out these notes – but not by declaring 86 per cent of the total currency (by value) illegal.
As the spiritual leader and poet Kabir wrote in one of his dohas (I remember a few from school), why use a sword when you need only a needle?
- Black money: Past seizures of black money or illegally earned wealth or income that has avoided the tax net indicate between 3.75 per cent and 7.3 per cent of such seizures are typically in cash. The rest is in gold, real estate and off-shore accounts. Where’s the action on those fronts? We’re waiting, and waiting.
Bank coverage: The government wants us to use credit cards, debit cards, ATM cards, go to banks and open accounts. All very well but remember four of every five Indian villages lack a bank account. Think about that – 80 per cent of villages. I’m not talking about the BJP’s Potemkin villages, but real Indian villages.
Informal sector: The informal sector is highly cash intensive and accounts for 45 per cent of GDP. It also makes up 80 per cent of employment. There are an estimated 21,000 unorganized mandis in the country and 38.3 million unorganized small and medium-sized businesses. Most of these, if not all, use cash in a perfectly legitimate manner. Today they are devastated and countless people have lost jobs. Who is responsible?
Fast-moving consumer goods (FMCGs): The BJP dreams of a futuristic, Isaac Asimov India where a billion people will log-in every morning and buy toothpaste and rice and dal online, making digital payments. Here’s the reality: 92% per cent of sales in the FMCG category take place courtesy kirana stores. Only one per cent of these uses cashless or digital modes of payment. Maybe the BJP’s next project is selling suntan lotion to Eskimos.
Electoral reforms: 80% of funds given to major political parties come from “unknown sources”. The BJP is the biggest culprit. In the period 2013-15, the years of the BJP’s greatest electoral success, the party is recorded as having received Rs. 977 crore in cash from “unknown sources”. This is at the root of India’s black money economy.
Debit card usage: In India, 95% of debit card transactions are used only to withdraw money from one’s own bank account, at an ATM. Only five per cent of debit card transactions are used to buy goods or services at a retail outlet.
Mobile wallets: While these are being promoted wildly and manically by BJP government ministers, it is worth noting that only 130 million Indians, or 10 per cent of the population, have mobile wallets. What do the rest do? Eat SIM cards?
Cooperative banks: 40% of the market share of the banking system is made up of cooperative banks. This is where ordinary rural folk, farmers and their families, go. Strangely, cooperative banks have not been allowed to exchange old currency notes. Why?
Printing currency: Based on current capacity of the printing presses, it will take eight to 12 months – even if the usual two shifts per day goes up to three shifts per day – to print and circulate the currency notes required to be given back to the people. On January 1, 2017, nothing would have changed. We’ll still be in a soup, even after the 50 days the Prime Minister has sought.
GDP loss: GDP growth may fall to 5.5% for this fiscal year, a two per cent negative from expectations. In absolute terms, India could lose as much as Rs. 4.7 lakh crore of GDP. Slowing demand in the economy, inventories going up, job losses as production is cut back – all of these are being reported from across the country.
Cash deposited: Currency worth Rs. 14.17 lakh crore was demonetised on November 8. Of this, the union government expected Rs. 3 to 4 lakh crore to remain unclaimed and to be “extinguished”. It spoke of this coming back to the government as a special dividend from the Reserve Bank of India, a unique institution that is led by the Invisible Man. Now it appears about Rs. 12 lakh crore has already come back and in the remaining fortnight, so will the rest. So where are the gains and where is the black money and where is the so-called dividend? The net gain from demonetisation is zero.
No, it is negative. Who will pay for the Rs. 1.28 lakh crore spent on the implementation, and the decline in economic activity that has disrupted millions of lives? The Big Jumla Party needs to answer.
December 13, 2016 at 1:09 pm
The rulers are matching with the policy without answering any of the questions by any number of persons and parties. Even if the economy faces doom, there may not be any reply or corrective measure to ease the problem.