The Prime Minister’s speech on the New Year-eve complimented the citizenry as if there was a peoples’ participation in a war effort. If there was a war, it was professed to be against black money and corruption, fake currency and currencies in the hands of terrorists. The manner in which the Prime Minister chose to thank what is called the support base for the “Suddhi Yajna” did not spell out or relate to any fake currency being unearthed or illicit corrupt cash holding being exposed or terrorists being got in the net. In the national suffering, both in rural and urban sectors, for the simple reason he was permitting time up to December 30, 2016 for the old currency to be deposited in the banks, but he put restrictions on withdrawals. The facts will speak for themselves. The Reserve Bank of India is yet to disclose fully the situation after December 30. But by that date, almost 90 per cent and above of the currencies stood deposited in the banks. However, the availability of new currency was less than half the quantum required for convenient functioning. In effect, for whatever the reasons (which we shall discuss a little later), the banking sector and economy were cash-starved in so far as the new currencies are concerned. This caused immense harassment and, more so, to the poorer sections of the society, especially in the unorganised sector. This situation could have arisen because the RBI was not ready with as much cash and ready till as much of cash as required from November 8 onwards till the end of December whereas Rs 12.44 lakh crore of old currency has been deposited in the banks by December 23. The availability was of a meagre Rs 5.92 lakh crore by that date. This shows improper planning and does not behove a welfare state and does not reflect well on the RBI. The other reason can be that there was some theory which was accepted that starving the economic system of new currency would itself be a curative measure. The first speaks of bad administration and a little indifference towards the citizens, and the second reflects a total lack of appreciation of the manner in which black money flows. This dearth of new currency has been a lingering problem even today when 86 per cent of the currency has been demonetised. There is a corresponding obligation to remonetisation in such a manner that no genuine depositor is inconvenienced.
There was no indication in the PM’s speech as to the quantum of the prescribed currency returned to the banking system by December 30 that could be termed as black money or fake currency. Therefore, it is reasonable to hold that probably by December 30, leaving aside a negligible percentage of the old currency, had come into the banking system. The gain to the exchequer out of putting the entire machinery into inconvenience and the poorer section into a harassing situation is not forthcoming from any of the statements of the Government or from the Prime Minister. The reasons for the restrictions and withdrawals were obviously conditioned by the inability of the Government that they were not able to provide adequate flow of new currency into the banking system. Even, as on the New Year’s Day, bankers in Noida called upon the Reserve Bank to immediately fund them because economic activity had been badly affected and a meagre Rs 680 crore had not even been promised to them. Even if it is promised, it is insufficient to their requirement. The request of the bankers of Noida is yet to be accepted, but a substantial share is hoped to be forthcoming. But that would not meet the requirements of the local economy, which has resulted in investments by about one lakh buyers who are stuck in 50 delayed real estate projects. In the Yamuna Expressway Authority area, 20 builders have failed to complete their projects, and the investment of around 20,000 home buyers is at stake. Similarly, there are about 95 under-construction real estate projects in Greater Noida and around one lakh home buyers in 80 of these projects are estimated to be affected. The Noida, Greater Noida and Yamuna Expressway areas are to recover a total amount of around Rs 25,000 crore from the builders in land dues and the builders have turned defaulters and the de or re-monetisation have caused a dislocation in the real estate projects. Twenty real estate builders in Noida have failed to complete their projects and requested the project authority to exit from them. The push that the Government has promised to the section, especially in rural areas and urban areas, would not be ameliorating these elements.
The PM in general analysed and preached without pinpointing or answering the specific benefit that has accrued to the economy in general and probably such an assessment has been avoided because there was no appropriate study before undertaking such a venture.
A part of the PM’s speech was related to announcement of the Budget proposals and nothing was great new in them repackaging of the old projects; and then, additional burden was assured to be taken by the Government relating to the housing interest for subvention. No gain as such was indicated of the massive measure of the demonetisation causing immense pain, difficulties and harassment to a majority of populace.
The last part of the speech was fight against corruption, and the Prime Minister said that the battle against corruption would continue. Neither were any programmes spelt out nor any future plan laid out so that black money holders were identified, and there was no indication of funding of any new ventures to help the innocent and honest. There was an appeal to the youth to stand by the Government in the “Suddhi Yajna”, but what Suddhi was to be undertaken was not disclosed through any concrete plan of action. The youth has, therefore, a reason to be more concerned as the currency has received a jolt in the international market, which he hardly any so-called black money being brought out and there is no co-relation between the present steps and the future plan which would bring about a fillip in the economy and give a kick start to the growth. Rather, growth has been hugely damaged and the future may be costly to all of us where young, middle age or old one can remain indifferent to what has gone on and what is further being planned out. It has been tragic not to hear a word of rumour regarding the loss of around 100 innocent lives. It has been nobody’s case that they were corrupt and black money hoarders and deserved to die on account of the indifferent action of the state. Total silence in this regard in the reasonably long speech of the PM smacks of insensitivity on the part of the Government regarding the death of innocent citizens because of an economic adventure. The citizens at large cannot ignore this and cannot be unconcerned regarding its implementation. This involves all of us, more so the youth. And surely this 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)