The decline in the GDP growth rate was termed by the Finance Minister of India as “a matter of concern”. The GDP growth in the last quarter of 2016-17 came down to 6.1 per cent, indicating a steady decline from the 7.9 per cent achieved in April-June quarter. There has also been a corresponding sharp decline in the industrial activity during the period of concern. Among other causes, demonetisation is also partly blamed for this. Introduction of GST also made its contribution in leading to high level inventory de-accumulation in the first quarter as traders were worried regarding the eligibility on input tax credit for output generated before its implementation. Slowdown of industrial activity is also conditioned by lack of adequate thrust and concentrated attention to the MSMEs. The MSME sector is neglected despite there being a separate Ministry to focus promotional support. One should not be carried away by the belief that large industries necessarily contribute the largest quantum to economic growth and overall wellbeing. Germany is acclaimed as a highly-industrialised country and 90 per cent of the industries in Germany are in the MSME sector. The media projection made by large industries and big corporate houses keep the balance tilted in favour of such industries. Demonetisation also adversely affected the informal sectors of the economy.
The Reserve Bank of India has at last given an account of the impact of demonetisation. It estimated that people had returned almost 99 per cent of the demonetised Rs 1000 and Rs 500 notes. When demonetisation was announced, the avowed objects were elimination of black money and corruption, elimination of fake currencies and elimination of alleged source of funding of terrorist activities. Digitisation was a new goalpost introduced by the leadership on a later date.
The RBI annual report disclosed that the face value of fake high-value notes was only Rs 41 crore. Out of Rs 15.44 lakh crore of banned currencies, Rs 15.28 lakh crore has come back into the banking system. This is roughly 98.96 per cent of the scrapped notes. The RBI data also disclose that the unturned Rs 1000 notes in March 2017 amounted to Rs 8,900 crore. The RBI incurred a cost of Rs 7,956 crore in printing new notes in 2016-17. This figure was Rs 3,421 crore in the previous year. The RBI has also increased its provisions by over Rs 13,000 crore in order to enhance contingency reserves. This practice has returned after three years. The net effect of this is that the dividend paid to the Government was halved and came down to a figure of Rs 30,659 crore in July-June financial year 2016-17. PM Modi announced demonetisation on November 8, 2016; and 86 per cent of the currencies in circulation turned invalid. There were long queues at the banks. The service of the banks was inadequate. The cooperative banks were left out in the first instance. ATM and other gadgets failed to meet the demands.
The originally-avowed objects of demonetisation were not really achieved notwithstanding some impact on the economy. The Prime Minister in his Independence Day address indicated that Rs 3 lakh crore worth of black money that had never come into the formal system entered the system because of demonetisation. Former Finance Minister P Chidambaram has pithily said that the RBI gained Rs 61,000 crore but lost Rs 21,000 crore in printing new notes. Alongside, the RBI also admits that its income for 2016-17 decreased by 23.56 per cent while the expenditure escalated by 107.84 per cent. We must note that Rs 500 notes were substituted by issue of fresh Rs 500 notes and Rs 1000 notes were not reissued. Instead, a Rs 2000 note came was issued. The Finance Minister has defended demonetisation stating that its real objective was to create a less-cash economy. Digitisation and an increased tax base would gradually crack down black money. If that be so, a long-drawn litigation rigmarole will continue as the Income Tax Department picks some lakhs of cases with unusual deposits that attract scrutiny. Consequently, the results of the scrutiny will take quite a few years to bear fruit, if any. No doubt, the banned currencies that have not come back to the banking system are only Rs 16.050 crore. This figure does not justify a marathon task, penetrating and intrusive in character.
There is a surge of activities in the ruling party, which is indicative of preparatory arrangements for an election in 2018 or 2019. There has been a reshuffle of the Ministry at the Centre, professedly to induct new talents with adequate experience.
Every ruling party (in different governments) is propounding the theory that it has provided the best governance. let us see how democracy is at work in our capital city of Bhubaneswar. The lower PMG area of Bhubaneswar has become a battleground of demands. Many of these grievances and demands are legitimate. Take for example the case of Block Grant teachers. It required a prolonged agitation of an intense character, pushing the Government to take a favourable decision. What could have been sorted out years ago brought the people to the streets. There is an allegation that the Government is insensitive to legitimate demands and a prolonged agitation, sometimes, yields results.
The youth power has been bewildered with the confusing scenario and continues to be exploited by political vested interests. It is time the youth power representing the largest number of voters was brought to the mainstream and permitted to participate in different decision-making processes. What have been narrated above are matters that concern us all. At the grassroots, rejuvenation is the immediate requirement to integrate the youths in an enlightened atmosphere and make an informed choice. Having crossed the age of 18, many young persons are now voters. But their voting power has not been integrated and galvanised for making youth movements purposive and efficacious. The decisions that had taken after the agitations are staged at the lower PMG could have otherwise been taken in the ordinary course of representation and amelioration of grievances. A responsive Government is a concomitant of the democratic system. It is time that the leadership involved youths in participating in the democratic process. This requires a proactive Government. Policy decisions are being announced from New Delhi and the country follows suit. The evaluation of the policies is not generated from the grassroots. They continue to be the brainchildren of the political and bureaucratic mandarins. This has led to disconnect between the ruler and the ruled. In causing this reorientation and integrating the youth power more meaningfully into the system, inevitable structural changes have to take place at the grassroots level to ensure involvement of the younger elements. It is a democratic requirement for better governance. In this endeavour, the older generation must necessarily yield to the new generation. But both must be concerned and involved. Whereas the Finance Minister has been “concerned” with the decline in the DGP, for the society at large, each one of the voters must be concerned with changing the power balance in the democratic setup. For rejuvenation and regeneration, no section of the society can stand isolated. 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)