This week we are concerned with the fiasco of demonetisation and the threat of shortage of water in the Mahanadi and the reservoir thereon at Hirakud.
By December 30 last, 14.5 lakh crore of the old 500 and 1000 rupee notes were back with the banks. This is out of a total of Rs15.44 lakh crore put out of circulation from November 8 midnight. The Modi Government initially estimated about Rs3 lakh crore to be the one-time windfall gain from demonetisation. This figure now stands reduced to around Rs90,000 crore only. Economists estimate that around 97 per cent of the demonetised currency was back with the banks by December 30. It is not unlikely that the balance amount will come in through foreign travellers and NRI deposits, permitted up to another three months and six months, respectively. The RBI has come out with the theory of errors of double counting and the Central Bank has to recheck its data according to them. Contrary to Modi’s statement, the RBI is refusing to receive the demonetised currency from resident Indians after December 30. The PM had announced availability of such a facility to all up toMarch 31.
Sources in Bloomberg also report that banks have received about 97 per cent of the demonetised currency. It is also further alleged that when the Government demonetised Rs15.4 lakh crore of Rs1000 rupee and Rs500 notes, it did not visualise that the entire lot of money would return to the banking system. The demonetisation, to a great extent, has facilitated conversion of black money into white. This is independent of the fact that around six per cent of the black money is estimated to be held in cash. The demonetisation decision has put a burden of Rs2.18 lakh crore on the Government and the banks. The construction sector, the garment industry and the leather industry, dominantly engaging daily-wagers, have considerably reduced their workforces. The National Institute of Public Finance & Policy has also estimated the economic loss at around Rs12 lakh crore attributable to the adventurist decision. leading companies like Intex, Karbonn, lava, etc., are planning to terminate or otherwise disengage 10 per cent to 40 per cent of their workforces.
The demonetisation is not likely to yield any long-term benefits as around 6 per cent of the black money exists in cash and this has more or less returned into the banking system and turned white. The Government spent around Rs17,000 crore for printing and transportation of new currency but derived no commensurate benefits. The hoarders have deposited money in the Pradhan Mantri Jan Dhan Yojana accounts reaching a mind-boggling figure of Rs87,000 crore within 45 days of the note ban. The GDP, bereft of demonetisation, has shown a declining trend. The farm sector contributes around 14 per cent of the GDP and is in a state of disarray. Farmers are facing distress sale due to cash crunch.
The adverse impacts on the farm sector will have its lingering effect, making it difficult to reverse the trend. Overall, the demonetisation (despite the chocking of remonetisation) has not yielded its desired results.
A near-financial emergency situation continues to persist with the withdrawal amount limited to Rs24,000 a week. The MSME sector has been most adversely affected though this sector generates sizeable quantum of employment. A disturbance in them will bring down the purchasing power in the hands of the employees through unemployment and layoffs. Our currency has been subjected to serious damages in the international market. The scenario is apparently dismal and not holding out any hope for the future. Notwithstanding all this, the Modi Government continues to drumbeat a success story of demonetisation. The average citizen, who feels the pinch, is bound to punch out his reaction as the pinch becomes more painful and more damaging.
w Now, we turn to the other matter of concern relating to the Mahanadi water. Reports indicate that the Chhattisgarh Government has closed some gates of the Kalma barrage in Chapa district to hold back Mahanadi water in the upper catchment area. This is bound to have its adverse effects on the power generation and on the Rabi crops. Even the Mahanadi barrage (storage-II) at Munduli received much less water. It is estimated that farming in 76,513 hectare would be affected, leading to a drought-like situation in Sambalpur, Bargarh, Subarnapur and Balangir districts.
The Hirakud Dam receives around 24 million acre feet (AFT) of water in rainy season during June to October. The water holding capacity of the dam is around 630 feet. The dam stores around 3.91 million AFT of water and releases nearly 20 million AFT for various purposes. Between November and May, the dam received 1.2 million AFT of water. This was the non-rainy season. The Burla Power House requires around 1.9 million AFT to consistently generate electricity from November to May. Around 1.3 million AFT is required to ensure supply of water to the four western Odisha districts for agriculture. Additionally, several industries, mainly metal-based, and the Ib Thermal Power Station, depend on the reservoir for supply of water. These industries are Aditya Aluminium, Vedanta, Sterlite, Bhusan, Aryan Steel, MCl and some others.
An analysis of power generation from the Burla Power Station reveals disturbing features. In 1960-61, the power house generated 747.5 million units of electricity. This figure went up to 1023.94 MUs in 2012-13. But, strangely, in the subsequent years, there has been a reduction in power production. In 2013-14, the power house generated 1,014.03 MU of electricity. This figure further came down to around 820.08 MU in 2014-15 and to a still lower figure of around 645 MU in 2015-16. In the current fiscal year, the power house has so far generated only 524.23 MU as per the data available last week. In short, over the last four to five years, there is a steady decline in power generation because of lack of adequate water supply.
This should lead us to focus our concern on the inflow of water into the dam. The dam received around 13,240 MU of water instead of 24,910 MU, during 2015-16. It received less than around 11,670 MU of water during the current fiscal year. If water is impounded further by the Chhattisgarh Government, both power generation and irrigation will be adversely affected in a very significant manner. As of last week, the level of water in the Hirakud Dam was about 627.71 ft. At this juncture, further closing the gates at the barrages by the Chhattisgarh Government would worsen the situation in so far as Odisha is concerned.
The Odisha Government has spent lakhs of rupees to consult lawyers in New Delhi to be advised within minutes that the probability of scrapping the completed projects or stopping the ongoing projects looks bleak. It has been opined, according to reliable sources, that the State should fight for its legitimate share of Mahanadi water as an inter-State river. Odisha is already before the Supreme Court, amongst others, for this purpose. But let the apathy and lethargy, as in the previous years, not damage the interest of the community at large. The irresponsible inactions of the previous years are costing us dear. We did not take appropriately timely remedial measures. We were indolent and not diligent. This permitted Chhattisgarh to cause the mischief that is already implemented or is under implementation. No orchestrated cacophony can remedy the situation. We have to put up an aggressive fight to get our legitimate share of the water. “Kalas Yatras” are no answer to the problem. Effective court action is the only remedy. But are we ready with our armour of facts and law so as to effectively achieve somethingIJ
Both demonetisation and Mahanadi issues ring a disturbing bell for all of us. We have to raise our voice so as to remedy the situation to some extent. Otherwise, we are in peril. let there be less of hypes and more of truths and let there be involvement of all. This definitely concerns us all!
(The writer, a Senior Advocate, is a former All India Service officer, a former diplomat, a former editor, a former President of Orissa High Court Bar Association and a former Advocate General of Odisha. jayantdas@hotmail.com)