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12 November, 2017 10:00:58 AM
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One year after demonetisation

It was on November 8 last year that Prime Minister Narendra Modi had announced the withdrawal of all high-value currency notes from circulation
Kumkum Chadha
One year after demonetisation

November 8 turned out to be an eventful day in the political and economic history of India. Had it not been for demonetisation, it would perhaps have passed off as any other but this year it was marked and remembered by almost everyone with different adjectives though. Critics slammed it and the government went all hog to publicize the advantages of the move that had for months shook the nation, either for the better or for worse. There were of course two sides of the story: the good and the bad. The word black was common: the Congress slammed it as black day while the BJP said that it was a day that marked the end of black money in the country. Both claims were exaggerated though because the demonetization has had its advantages and also short term disadvantages.  It was on November 8 last year that Prime Minister Narendra Modi had announced the withdrawal of all high-value currency notes from circulation. Addressing the nation via a television broadcast, he announced that all 500- and 1,000-rupee currency notes would "no longer be legal tender." The move was disruptive for some months because there was shortage of new currency and a cap on how much one could draw from one’s account. There were serpentine queues outside banks and ATMs and reports of people, over 100, dying while waiting for hours to get money.
Supporters of PM Modi and his party, the Bharatiya Janata Party,  hailed this as a necessary measure that "will clean up the system." Critics  lambasted it as a "silly" move that caused enormous hardship.

A year on, there are mixed reports of a growth slow down and the government’s claims of unearthing black money somewhat busted. If BJP celebrated, the Congress took out protests to decry the move.

Former PM Manmohan Singh called it "a black day" for India's economy and democracy. Calling it  an "organized loot" and "legalized plunder”, Singh said there is no instance in the world where such a “coercive step” has been taken: "The damage it has caused has been multiple — economic, social, reputational and institutional. Slowing GDP is merely one indicator of the economic damage. Its impact on the weaker sections of our society and business is far more damaging than any economic indicator can reveal." Singh said.

Singh’s is an accomplished economist but on this he speaks more like a Congress politician.

As against this India’s Finance Minister Arun Jaitley called  demonetization  "a watershed moment in the history of Indian economy” and said that it indicates the Government’s resolve to cure the country from 'dreaded disease of black money.'" Jaitley claimed that the move had reduced cash in the economy, ended anonymity of cash, and brought in more individuals in the tax net and more importantly dealt a “body blow” to black money.

On November 8 this year BJP patriarch L.K.Advani turned  ninety. People queued up to meet him, some with flowers and others with good wishes. Singer Sonu Nigam came as a guest but sang a few songs including Advani’s  favourite numbers as a tribute to the man and the politician who had changed the face of the BJP. But Nigam was there more as a family friend than a party loyalist. There were others from across the political spectrum including Congress leaders Kapil Sibal, Abhishek Manu Singhvi,  Biju Janata Dal’s Jay Panda, Shiromani Akali Dal’s Naresh Gujral  and Trinamool Congress’s Dinesh Trivedi among others.

India’s Vice President Venkaiah Naidu was there and also the BJP flock including Prime Minister Narendra Modi, Finance Minister Arun Jaitley, Home Minister Rajnath Singh, Foreign Minister Sushma Swaraj and Union Minister Ravi Shanker Prasad among others.

The BJP does this well: express solidarity publicly even while sidelining its stalwarts when it comes to giving them their due. It is ironic that while the party and the Cabinet was going all hog flagging demonetization and its attack on black money it conveniently chose to ignore that the person who raised the anti-black money banner was none other than L.K.Advani much before Modi and company descended on the national scene. Equally, it was part of the BJP manifesto and Modi’s demonetization move was to keep that commitment because questions were raised on what the party was doing about cracking down on black money. But at no point was Advani mentioned even though he was among the first to raise his voice against the menace.

It was way back in 2009 when Advani raised the black money issue and spoke about the NDA’s commitment to bring it back were the party to come to power. Again some two years later, he demanded a White Paper on black money stashed away abroad and asked the Centre to come clean on the amount of money in foreign banks and what it proposed to do to bring it back.

The current government took up the issue with renewed vigour and struck with the demonetization weapon: seen by an effective tool in many quarters. Except it forgot to mention Advani’s original tirade and took ownership of an issue that the patriarch had, in the first instance, launched.

Linked closely to demonetization is the issue of the Goods and Services Tax or the GST that for many is a hydra let loose on the people of this country. An indirect tax, the GST was introduced earlier this year to replace a slew of indirect taxes and bring the entire country under a uniform tax regime.

As is with most far reaching reforms, the GST is not easy to implement and is causing heart burn among the people and the business community especially small businesses. In some cases, the nitty gritty is difficult to understand and hence the ruckus.

In the eye of the storm seems to be the forthcoming Gujarat elections which is being seen as a test case for the sweeping reform that the Modi government has introduced. With anti incumbency riding high, given that the BJP has ruled the state for several terms, Gujarat is not a cakewalk for the ruling dispensation. The onslaught is on the GST and its after effects the buzz being that the Modi government will “pay heavily” for this experiment.

The sentiment is similar to the post demonetization exercise when hell broke loose and it was touted that the BJP will pay for its misdeeds and loose the state elections that were due. Quite contrary to expectations, the BJP swept the polls and gave its critics a run for their money, as it were. History could repeat itself this time around and the GST cry may be much ado about nothing and the BJP may stump the Opposition and put up a good show at the hustings.

Even as they cry foul, critics miss a crucial point about Modi moving away from BJP’s core constituency of traders. Till such time that Modi occupied centrestage, BJP has banked heavily on businessmen and traders who have for decades supported it. But Modi decided to broad base the party’s electoral reach:  Instead of concentrating on the trading community, Modi deftly chose to focus on the poor. His calculation that the poor would see the note ban as a move to hit the rich was correct. Encore GST which while it has hit the traders, has had little  impact on the poor. It is at best a talking point and the BJP could sit smug had Gujarat not been the issue. Here it could be on a sticky wicket because Gujaratis are a trading community and hence both demonetization and GST have taken their toll on the people. Therefore, when they cast their vote the twin issues are sure to be a factor. But pitch this against the fact that Modi belongs to Gujarat and the state has a distinction of giving the country a Prime Minister, sentiment over economics is sure to rule.

The writer is a senior Indian journalist, political commentator and columnist of The Independent. She can be reached at: (kumkum91@gmail.com)

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Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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