In the Modi drive

Completing two and a half years in his office at New Delhi's South Block, Prime Minister Narendra Damador Modi in the evening of November 8 stunned the nation by suddenly announcing the de-monetisation of Rs 1000 and Rs 500 forthwith, declaring them " not legally tendered".
He also stopped the withdrawal of money by the depositors from their own accounts in banks, post-offices etc, restricting the withdrawal limit at Rs 2000/ Rs 2500/ Rs 4500, which, according to former Prime Minister and the renowned economist Dr Manmohan Singh, " is nothing but an organized plunder", adding that "nowhere in the world such thing had ever happened that the people were not allowing to withdraw their money from their own accounts ". – (even during the two world wars).
Modi said the decision was taken for detecting the black money and bringing the money launders and the hoarders to book. He had his information that there had been some huge inflow of black money and counterfeited notes to the country from across Pakistan by the terrorists which needed to be combated .

Side by side, he also stressed that henceforth, the country would be brought under digitisation and cashless monetary network. But such proposal in the country at this stage is neither feasible nor desirable.
In the US, the UK, Canada and in many European countries, cashless system is in operation in the marketing network. But there is also cash transaction as an alternative. In the modern market economy, the introduction of a total cashless system in the underdeveloped countries like India has been a futile exercise.

Manmohan Singh We all know about Gresham's law of money circulation which says : "bad money drives out good money from the market". But bad money is not black money. Both the bad money and good money have the same face value in the market, while black money is much strong, forceful and harmful, which can upset the total money market and badly affect the country's economy.

In this respect, Modi's drive against black money was commendable. But whether the de-monetisation of Rs 1000 and Rs 500 notes was a right step or not is debatable. A large number of prominent economists, including the nobel laureate Prof Amartya Sen, eminent scholar Dr Kaushik Basu, Dr Pranab Bardhan and other experts have expressed their views against the decision.
In some countries the step was taken but nowhere it had been successful. On the country, the monetisation decision had adverse reaction and the step was suddenly withdrawn in the halfway
Official records reveal that in 1982 in Ghana, the currency of 50 sedi was demonetized and replaced by 10. But the step backfired. In 1984, the military government in Nigeria led by Mohammadu Buhari issued new currency with new colour coins for resolving the country's debt-ridden crisis and inflated economy. But the attempt was strongly opposed by the people who did not accept the step.
In Congo, Mobutu Sese administration in 1993 carried out back to back currency reforms and it was also not well-received by the people and the step resulted in an economic disruption. Soon Mobutu was ousted.
In 2012, in North Korea, the military ruler Kim Jong II made certain changes in the currency operation system for tackling the black money problem. Soon there were protests and large scale demonstrations against the decision. Immediately the order was withdrawn and the finance minister had to lose his job. He was soon murdered by the angry people.
In Soviet Russia also during Mikhail Gorbachev's tenure, at one point of time , there was large scale withdrawal of ruble from circulation for driving out black money. Soon there was disaster in the entire economy and this led to the breaking up of the country

Arun Jaitley All the nations in the world admit that the operation of black money has been a perennial problem which needs to be stopped. But no country so far has suggested any right method. It has been proved that the demonetisation of currency is not the right method and the only method. Side by side, a total cashless economy in India has been an absurd proposition .
Still, the Modi government had taken the bold decision of demonetising Rs 1000 and Rs 500 notes but he did not spell out the names of the experts who had advised him to take such step.

Modi's main lieutenant and the lawyer-turned politician Arun Jaitley also looked surprised as if he had no prior knowledge about the decision.

The decision was announced by Modi himself on November 8 evening and many people, including some of those close to him and the BJP, had expressed surprise. RBI governor Urjit Patel and union finance secretary Asok Lavasa were silent
Modi's main lieutenant and the lawyer-turned politician Arun Jaitley also looked surprised as if he had no prior knowledge about the decision. The lone person- the economic affairs secretary, Saktipada Das, a senior IAS officer, was in the forefront as an official spokesman who could be seen now and then on TV channels announcing the government's "time to time changing decisions" on the ongoing drive against black money

There were widespread angry protests and demonstrations against the decision without making any prior alternative arrangement for maintaining normal functioning of money market and business activities No steps were also taken for protecting the interests of people.

Some political leaders, including Rahul Gandhi (Congress), Mamata Banerjee (TMC), Arvind Kejriwal (AAP), Sitaram Yechury(CPI-M) and others, smelt some foul play in the drive, which they alleged, had been launched for serving the interests of businessmen and traders at the cost of the poor people.

Within a few days, a total chaos and country. There were mad rushes disorder prevailed everywhere in the everywhere- in the banks, ATM counters, post offices and other establishments for depositing the old currency notes and withdrawing them.
Everyday, the people- from all sections were seen standing hours and after hours in the queues before banks and post-offices for getting little amount of money from their own accounts. But most of the time they had to return in empty hands.
About 100 people( mostly aged and ill)standing in the queues for many hours at a stretch died due to sudden heart attack. The people got agitated. The old people who had never experienced such odd situation were upset. The entire nation was engulfed into an unwarranted crisis.
Modi's slogans for fighting against black money sounded well but it was not well accepted. The plan was not welldesigned and wellimplemented. The countrymen still do not know if the demonetisation was an administrative decision ( since there was no word either from the RBI and the finance ministry on the issue). The BJP adversaries
– the Congress, TMC, CPI(M) and all other anti-BJP parties, allege the drive was drawn by the BJP leadership as its campaign tricks on the eve of the forthcoming Assembly elections in Uttar Pradesh and some other states, for wooing the voters. Earlier, on September 29 , the surgical strike was conducted by the Indian tropes in PoK in gunning down 40 terrorists and five Pakistani soldiers in retaliation to the terrorists' attack at the Uri camp in Kashmir on September 18 in which 19 jawans were killed.
The BJP soon launched campaign in lauding the army's successful operation in PoK, which was conducted at the instance of the prime minister. But the surgical operation and the demonetisation drive misfired so far as the BJP's pollcampaign drive was concerned. On the contrary, the public anger against the Modi government in the wake of the people's sufferings raised high .
The sufferings of the people in the rural areas have been worst. In both houses of Parliament, the issue was raised and caused uproar all the time. There was no normal functioning of the two Houses during the session. Many important bills got stuck. Soon the public agitations spread like

Some political leaders, including Rahul Gandhi (Congress), Mamata Banerjee (TMC), Arvind Kejriwal (AAP), Sitaram Yechury(CPI-M) and others, smelt some foul play in the drive, which they alleged, had been launched for serving the interests of the businessmen and the traders at the cost of the poor people.

wildfire in every nook and corner of the country. At long last, the Modi brigadecomprising the finance minister Jaitley, Ravi Sankar Prasad, Ananth Kumar, Venkaiah Naidu, Prakash Javrekar – all cabinet ranking ministers and host of others swung into action in rescuing Modi from the predicament and saving the party in the crisis. But several others, who apparently did not approve of the demonetisation decision, kept silent.
The government report says within one month's time since November 8, an amount of Rs 11.5 lakh crore (of the total Rs 15.5 lakh crore) in the denomination of Rs 1000 and Rs 500 in circulation had been deposited in banks and post offices within one month's time. There was still another 30 days in hand for depositing the remaining amount.

An official report states that the Indian black money worth USD 1.06 trillion was illegally held in Switzerland. Others claim that USD 2 billion had been held by the Indians in Switzerland banks.

In February, 2012, the CBI stated that the Indians had USD 500 billion illegal money in foreign tax havens in Switzerland and some other places like Singapore, UAE and Hong Kong

In 2011, the government got a list of 782 Indians who had deposited in $92.95 billion in HSBC banks abroad. But the names were not disclosed as per agreement with the bank. But no black money could be brought back to the country.

While taking over as prime minister Modi promised to bring back all black money from abroad within 100 days but he could not fulfill the commitment.

Inside the country, the black money operates in many areas likes real estate business, film industry, chit funds operation, sports activities, construction business and various other trades and industries. Political parties are often accused of receiving black money as donation from corrupt businessmen, which many political leaders admit.
Several people have questioned why film actors in Bollywood take acting fees in cash ? Why the barristers and advocates in the Supreme Court and high courts also get the consultancy fees in cash.
There has been no bar on political parties for taking donations from their well-wishers and friends. It is apparent that no white money ( taxed money) goes to the political parties as donation.
The CPI(M) veteran the late Jyoti Basu had once suggested to the Indian government that like in Germany it should provide funds to political parties. The step was necessary to stop black money operation in politics, Basu added.
It is a matter of record that the two major political parties- the Congress and the BJP--have an income of Rs 5 billion( USD 74 million) and Rs 2 billion ( USD 30 million) respectively. They had spent some Rs 100 billion( USD 1.5 billion) and Rs 150 billion(USD 2.2 billion) respectively in the last Lok Sabha polls in 2014. Some people suspect that a large amount of these political funds included black money coming from businessmen.



		EDITOR'S MAIL MATTERS OF PUBLIC POLICY NOTEBANDI DRAMA NOTEBANDI DRAMA FRANKLY SPEAKING POLL 2017 TAMIL NADU POLITICS TAMIL NADU POLITICS REALPOLITIK POLITICAL RESERVATION KASHMIR WATCH A HOLLOW RITUALRY ENVIRONMENTAL FALLOUT BABY TRAFFICKING AVIATION NOTE HITS & MISSES SPORT NOTEBOOK NEW PAK ARMY CHIEF PAGE FROM HISTORY MIDDLE EAST SCENE US WATCH NEW WHITE HOUSE INDO-VIETNAMESE TIES BOOK BAZAAR BOOK BAZAAR GENDER VIOLENCE SIGNS OF THE TIMES YOGA IN DAILY LIFE-IX ART OF LIVING Issue:January' 2017 Subscribe Now	NOTEBANDI DRAMA In the Modi drive Completing two and a half years in his office at New Delhi's South Block, Prime Minister Narendra Damador Modi in the evening of November 8 stunned the nation by suddenly announcing the de-monetisation of Rs 1000 and Rs 500 forthwith, declaring them " not legally tendered". He also stopped the withdrawal of money by the depositors from their own accounts in banks, post-offices etc, restricting the withdrawal limit at Rs 2000/ Rs 2500/ Rs 4500, which, according to former Prime Minister and the renowned economist Dr Manmohan Singh, " is nothing but an organized plunder", adding that "nowhere in the world such thing had ever happened that the people were not allowing to withdraw their money from their own accounts ". – (even during the two world wars). Modi said the decision was taken for detecting the black money and bringing the money launders and the hoarders to book. He had his information that there had been some huge inflow of black money and counterfeited notes to the country from across Pakistan by the terrorists which needed to be combated . Side by side, he also stressed that henceforth, the country would be brought under digitisation and cashless monetary network. But such proposal in the country at this stage is neither feasible nor desirable. In the US, the UK, Canada and in many European countries, cashless system is in operation in the marketing network. But there is also cash transaction as an alternative. In the modern market economy, the introduction of a total cashless system in the underdeveloped countries like India has been a futile exercise. Manmohan Singh We all know about Gresham's law of money circulation which says : "bad money drives out good money from the market". But bad money is not black money. Both the bad money and good money have the same face value in the market, while black money is much strong, forceful and harmful, which can upset the total money market and badly affect the country's economy. In this respect, Modi's drive against black money was commendable. But whether the de-monetisation of Rs 1000 and Rs 500 notes was a right step or not is debatable. A large number of prominent economists, including the nobel laureate Prof Amartya Sen, eminent scholar Dr Kaushik Basu, Dr Pranab Bardhan and other experts have expressed their views against the decision. In some countries the step was taken but nowhere it had been successful. On the country, the monetisation decision had adverse reaction and the step was suddenly withdrawn in the halfway Official records reveal that in 1982 in Ghana, the currency of 50 sedi was demonetized and replaced by 10. But the step backfired. In 1984, the military government in Nigeria led by Mohammadu Buhari issued new currency with new colour coins for resolving the country's debt-ridden crisis and inflated economy. But the attempt was strongly opposed by the people who did not accept the step. In Congo, Mobutu Sese administration in 1993 carried out back to back currency reforms and it was also not well-received by the people and the step resulted in an economic disruption. Soon Mobutu was ousted. In 2012, in North Korea, the military ruler Kim Jong II made certain changes in the currency operation system for tackling the black money problem. Soon there were protests and large scale demonstrations against the decision. Immediately the order was withdrawn and the finance minister had to lose his job. He was soon murdered by the angry people. In Soviet Russia also during Mikhail Gorbachev's tenure, at one point of time , there was large scale withdrawal of ruble from circulation for driving out black money. Soon there was disaster in the entire economy and this led to the breaking up of the country Arun Jaitley All the nations in the world admit that the operation of black money has been a perennial problem which needs to be stopped. But no country so far has suggested any right method. It has been proved that the demonetisation of currency is not the right method and the only method. Side by side, a total cashless economy in India has been an absurd proposition . Still, the Modi government had taken the bold decision of demonetising Rs 1000 and Rs 500 notes but he did not spell out the names of the experts who had advised him to take such step. Modi's main lieutenant and the lawyer-turned politician Arun Jaitley also looked surprised as if he had no prior knowledge about the decision. The decision was announced by Modi himself on November 8 evening and many people, including some of those close to him and the BJP, had expressed surprise. RBI governor Urjit Patel and union finance secretary Asok Lavasa were silent Modi's main lieutenant and the lawyer-turned politician Arun Jaitley also looked surprised as if he had no prior knowledge about the decision. The lone person- the economic affairs secretary, Saktipada Das, a senior IAS officer, was in the forefront as an official spokesman who could be seen now and then on TV channels announcing the government's "time to time changing decisions" on the ongoing drive against black money There were widespread angry protests and demonstrations against the decision without making any prior alternative arrangement for maintaining normal functioning of money market and business activities No steps were also taken for protecting the interests of people. Some political leaders, including Rahul Gandhi (Congress), Mamata Banerjee (TMC), Arvind Kejriwal (AAP), Sitaram Yechury(CPI-M) and others, smelt some foul play in the drive, which they alleged, had been launched for serving the interests of businessmen and traders at the cost of the poor people. Within a few days, a total chaos and country. There were mad rushes disorder prevailed everywhere in the everywhere- in the banks, ATM counters, post offices and other establishments for depositing the old currency notes and withdrawing them. Everyday, the people- from all sections were seen standing hours and after hours in the queues before banks and post-offices for getting little amount of money from their own accounts. But most of the time they had to return in empty hands. About 100 people( mostly aged and ill)standing in the queues for many hours at a stretch died due to sudden heart attack. The people got agitated. The old people who had never experienced such odd situation were upset. The entire nation was engulfed into an unwarranted crisis. Modi's slogans for fighting against black money sounded well but it was not well accepted. The plan was not welldesigned and wellimplemented. The countrymen still do not know if the demonetisation was an administrative decision ( since there was no word either from the RBI and the finance ministry on the issue). The BJP adversaries – the Congress, TMC, CPI(M) and all other anti-BJP parties, allege the drive was drawn by the BJP leadership as its campaign tricks on the eve of the forthcoming Assembly elections in Uttar Pradesh and some other states, for wooing the voters. Earlier, on September 29 , the surgical strike was conducted by the Indian tropes in PoK in gunning down 40 terrorists and five Pakistani soldiers in retaliation to the terrorists' attack at the Uri camp in Kashmir on September 18 in which 19 jawans were killed. The BJP soon launched campaign in lauding the army's successful operation in PoK, which was conducted at the instance of the prime minister. But the surgical operation and the demonetisation drive misfired so far as the BJP's pollcampaign drive was concerned. On the contrary, the public anger against the Modi government in the wake of the people's sufferings raised high . The sufferings of the people in the rural areas have been worst. In both houses of Parliament, the issue was raised and caused uproar all the time. There was no normal functioning of the two Houses during the session. Many important bills got stuck. Soon the public agitations spread like Some political leaders, including Rahul Gandhi (Congress), Mamata Banerjee (TMC), Arvind Kejriwal (AAP), Sitaram Yechury(CPI-M) and others, smelt some foul play in the drive, which they alleged, had been launched for serving the interests of the businessmen and the traders at the cost of the poor people. wildfire in every nook and corner of the country. At long last, the Modi brigadecomprising the finance minister Jaitley, Ravi Sankar Prasad, Ananth Kumar, Venkaiah Naidu, Prakash Javrekar – all cabinet ranking ministers and host of others swung into action in rescuing Modi from the predicament and saving the party in the crisis. But several others, who apparently did not approve of the demonetisation decision, kept silent. The government report says within one month's time since November 8, an amount of Rs 11.5 lakh crore (of the total Rs 15.5 lakh crore) in the denomination of Rs 1000 and Rs 500 in circulation had been deposited in banks and post offices within one month's time. There was still another 30 days in hand for depositing the remaining amount. An official report states that the Indian black money worth USD 1.06 trillion was illegally held in Switzerland. Others claim that USD 2 billion had been held by the Indians in Switzerland banks. In February, 2012, the CBI stated that the Indians had USD 500 billion illegal money in foreign tax havens in Switzerland and some other places like Singapore, UAE and Hong Kong In 2011, the government got a list of 782 Indians who had deposited in $92.95 billion in HSBC banks abroad. But the names were not disclosed as per agreement with the bank. But no black money could be brought back to the country. While taking over as prime minister Modi promised to bring back all black money from abroad within 100 days but he could not fulfill the commitment. Inside the country, the black money operates in many areas likes real estate business, film industry, chit funds operation, sports activities, construction business and various other trades and industries. Political parties are often accused of receiving black money as donation from corrupt businessmen, which many political leaders admit. Several people have questioned why film actors in Bollywood take acting fees in cash ? Why the barristers and advocates in the Supreme Court and high courts also get the consultancy fees in cash. There has been no bar on political parties for taking donations from their well-wishers and friends. It is apparent that no white money ( taxed money) goes to the political parties as donation. The CPI(M) veteran the late Jyoti Basu had once suggested to the Indian government that like in Germany it should provide funds to political parties. The step was necessary to stop black money operation in politics, Basu added. It is a matter of record that the two major political parties- the Congress and the BJP--have an income of Rs 5 billion( USD 74 million) and Rs 2 billion ( USD 30 million) respectively. They had spent some Rs 100 billion( USD 1.5 billion) and Rs 150 billion(USD 2.2 billion) respectively in the last Lok Sabha polls in 2014. Some people suspect that a large amount of these political funds included black money coming from businessmen.