The dramatic demonetisation undertaken by Prime Minister Narendra Modi is a bold step lacking the desired advance planning. The imponderables should have been given priority. As a result, problems galore of an inevitable cash crunch causing immense hardship to the poor. The rural economy appears to be hit badly. This well-intentioned move could backfire for the BJP if the problems continue for long. Modi has urged the suffering people to bear with him for 50 days to bring some order to the widespread disruption in his determined bid to make India corruption free.
There is an unmistakable message to most of the political parties which cannot escape responsibility for contributing to the parallel economy with its mindless spending of unaccounted money which has assumed alarming proportions.
The million-dollar question is whether there will be a perceptible change in seven week’s time in dealing with the monster of a parallel economy which has plagued the country since independence. Only this time there is no amnesty which has created a piquant situation for those who have stashed away an incalculable amount of money for a rainy day. Inevitably the sudden withdrawal of 85 per cent of the currency from the market has created mind boggling problems for a wide cross section of people even as they backed the Prime Minister’s intent of tackling the black money menace head on.
Bankers say it will take another three to four weeks for the ATMs to be calibrated for dispensing the new Rs 500 and Rs 2000 notes. The deadline for depositing the banned notes of these two denominations has been extended till the end of this year. Cash for daily wage earners has literally dried up. Small businesses are badly hit.
It can have a cascading effort with supplies being affected. Trucks have come to a standstill at several places in the country as they do not have the money for filling diesel. The situation in rural areas inadequately served by banks and ATMs is crippling. By coming down hard against black money, counterfeit currency and funding of terrorism are bound to be affected. The Prime Minister has drawn pointed attention to the risks that he has faced and continues to do so in serving national interests but he is not unduly worried on that score. “Whatever I had, my family, my home…I left all of it for the nation. I know they (read Congress) are against me,” Modi said in an emotional vein in Belgaum on Sunday. “They may not let me live. They may finish me because their loot of 70 years is in trouble. But I am prepared,” he asserted.
It is for the first time that demonetisation of such a magnitude has been undertaken globally. This has started a debate on the timing of the demonetisation coming as it does barely five months before certain assembly elections, particularly in the most crucial state of Uttar Pradesh.
This assumes significance as the ruling BJP is involved in a do or die struggle in UP. Regaining power in that State will set the stage for the 2019 general elections for the Lotus party. As witnessed over the last week, the currency swap has been anything but smooth.
Regional satraps like West Bengal chief minister Mamata Banerjee and SP patriarch Mulayam Singh Yadav and UP chief minister Akhilesh Yadav as well as BSP supremo Mayawati among others have expressed their annoyance in no uncertain terms with the demonetisation.
This is bound to have an adverse impact on their extravagant spending during the ongoing election campaign. Even as Ms Banerjee expressed her desire to join hands with staunch rivals, the Left parties and others in fighting the menace of black money, certain other leaders felt Modi could have waited for a few months before unleashing this radical step.
It is an out and out political gambit with beneficial economic outcome in pursuit of his theme of “Sab ka saath, sab ka vikas”. It is a desperate move as Modi is about to complete half his term of two-and-a-half years in office with not one of his multitude of promises including creation of jobs along with tackling the menace of black money as well as depositing Rs 15 lakhs in each and every savings bank account holder’s account in the country having materialised so far.
He paints the Congress party black which has ruled the country for nearly six decades with a thriving black money economy in the country. The move is intended to snuff out political competition in pursuit of his pursuit of securing a second term as Prime Minister along with meeting the unlikely objective of a “Congress mukt Bharat”.
Modi’s endeavour is to change the political scenario and equation in the national capital. However, a section of the BJP is worried about the political fallout from demonetisation. They are concerned about the negative perceptions being created due to the continued travails and hardship faced by the common man. This is all the more so with the much touted pledge of “achhe din aane wale hain” being farfetched even after 30 months in office.
Once again political parties of all hues and shades are being lampooned for lacking the will in reforming the electoral process and going in for state funding of elections. The imperative need is for political parties to reform themselves rather than stashing away unaccounted money and gorging on them, especially during during elections.
It is time the autonomous Election Commission of India cracked the whip for overspending far in excess of the prescribed amount while contesting elections. It is a huge wake-up call for the ECI as the bulk of political funding is from undisclosed sources. Once again the dire need for electoral reforms has come to the fore with the Prime Minister’s surprise demonetisation.
Let’s wait and see if the political bosses have the will this time around.
The writer is a senior journalist and commentator.
