The Laughing Lady

The Laughing Beauty

Mohan Kothekar

Writer and Blogger

Beauty lies in the eyes of beholder, the proverb says.  The nature itself is beauteous and bewitching; appropriate mindset necessitate in capturing it through divergent senses.  Look at any direction, immeasurable instances do befall in everybody’s life that are most classy and memorable.  Even cozeners, defrauders, larceners, manslayers and persons with distorted ideologies do have inbuilt but dormant affirmative mindset; objectivity and expressions differs.  For man-slaughterer, an instant and flawless and unblemished strike like a proficient surgeon is the most beautiful act.  Adapting to teaching methodologies is the transcendent intent of an ideal teacher.  Ingenious convergence to decipher the unsolved enigma is the ultimate cherished hanker of a scientist. 

Artists are the eminently envious of all, creativity is the only objective.  Luminaries like Earnest Hemingway, Dhyan Chand, Adolf Hitler, Pablo Picasso, Robert Alva Edison and Charlie Chaplin have enjoyed their life to the fullest stretch.  Leonardo De Vinci’s Mona Lisa painting is the flawless amalgamation of beauty and smile. “To be or not to be” or “when beggars die, there are no comets seen” are few golden illustrious quotes of Shakespeare; it is for those who relish the articulate literature, but not for the passerby.  What a strange! Emily Dickinson – an American poet, lived much of her life in reclusive isolation – has written 1800 poems that deals with themes of death and immorality.  Lata Mangeshkar, the melody queen and most admirable god endowed playback singer, for her the beauty lies in preeminent repertoire of the rendition of euphonious songs.  For many, innovations and creativity itself is a laughing beauty, could be for the fraction of a second.  So, the beauty lies in one’s deep interest, for others difficult to secure.        

Mentally deranged though live measurably – its public presuppositions - but do laugh and enjoy.  Ron Howard’s biographical movie on Noble Literate, the Great Mathematician wizard Professor John Nash - A beautiful Mind – is a classic example of eternal beauty.  An asocial brilliant mathematical genius though paranoid schizophrenia patient who spent several years in psychiatric hospital has ultimately overcome due to consistent struggle.  Isaac Newton, Leo Tolstoy, Charles Darwin, Charles Dickens even Abraham Lincoln and Winston Churchill do have mental elements but were par excellence in the arena of own choice.  A beautiful mind with inherent competency to search beauty always smiles on their ingenuity.

Albert Einstein a German born prodigy, a Physicist, and by birth a Jewish, led Manhattan Project and innovated atom bomb for Allied forces, but, largely denounced idea of using nuclear fission as a weapon.  However, he is known to the history not as a savior of Hiroshima and Nagasaki but a demolisher.  Paul Tibbets, a pilot who flew Enola Gay when it dropped little boy, first two atom bombs, died due to enemy bombing fear psychosis, no funeral but cremated and ashes were scattered.  Japanese ruination was an exhilaration, delectation, carnival, yippee and jollification for rest of the world immediately after the end of World War II.  Yes, expression of amusement and facial movement with quality that provides pleasure to the senses do lies in nature; may be in the pious and purest form or in the ugliest entity.

                                            

          

  Cachinnate is a rare commodity of myriad.  Churlish seldom laughs but do enjoys nature’s creativity.  Animals have instinct of good mannerism, be it domestic or untamed feral.  Beast never assaults unless ravenous, otherwise, herbivorous and carnivorous do coexist without dismay.  Television channel’s TRP adorn as and when ferine plays and summersaults rather than beast on a prowl for a foray.  The definition of laugh mutates from individual to individual.  Writer once savored and cackled at the splendent beauty of newborn donkey’s timid acrobats.  Scientifically and socio-psychologically it was authenticated beyond distrust that pet plays consequential task in the treatment, non-medical intervention, of the long-term mental health problem.  Pets provide most valuable central social support and also build stable and close relationship with patients.  Consistent physical presence often distracts persons with strong suicidal tendencies.  “Pet knows when to come on my lap, I don’t have to tell him, he just senses my feelings”, a patient said.  Even then, in return, what human mankind gives them back?  Mere a chaining, scolding, lashing, scourging and besiege in cage in barbarous fashion!  Increasing trust over pets than people is the grave symptom of pathological human mindset that has lost entire charisma of affectionate love, beauty and laugh towards other. 

           

The dreadful and beautiful ingenuity on the earth is MOTHER, the queen of heaven, the antecedent and progenitor of the nature, the analogous to god.  And, for her, are her heirs, her seeds.  Children are the benedictions and transform her life worth living.  For every mother the child is the god’s the greatest gift.  There is only one pretty child in the world, and every mother has it; be of any shape, size, sex, color and intellectual competence but always is adorable.  “God could not be everywhere, and therefore he made mothers,” Gross said and “art is the child of nature in whom we trace the features of the mothers face,” Henry Longfellow ethically said.  Our planet is the mother of all, admire her, and we all are her lovable beautiful adorable laughing beauties.  Reciprocation in the purest form is philosophical serene and instill excogitation till the last breath.  The nature provided us a beautiful place; inculcate new ideas to nurture the mother earth.  One should not forget the quotes of Abraham Lincoln “all that I am or ever hope to be, I owe to my angel mother.”  What a concoction of nature, the mother and a child?  “The most precious jewels you will ever wear around your neck are the arms of your children,” unknown quote to be remember forever.

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Post Demonetization: Miseries and Vagaries

      Recently, Mr Arvind Panagariya, Vice-Chairman of Niti Aayog vented his views on demonetization policy.  The proverb says “the war is essential for peace;” with the same analogy, for higher GDP a gigantic shock in the form stringent action against black money holders is required.  In his words “the supply chains that get temporarily disrupted will recreate themselves quickly, like rebuilding of New Oreleans after Katrina devastation.”  So, sometime devastation is needed to cleave the plateau.  He said the transition is painful; India would recover the loss in growth in the current quarter very soon.  Some form of incentives to support digital transaction that substantially improve the economy, he replied.  In his opinion the scrapping of currency notes never to be looked as an isolated entity; it is the integral part of larger perspectives.  “India has a long way to go in terms of setting policies,” he said.  Regarding issuance of 59 directives from Reserve Bank of India and the government his observations are tangible.  Both, the Central bank and government have the integrated approach towards the implementation of the policy; though some hiccups are noticed.  With regards to non-performing assets, his observations are coinciding with the government; since, the government is very serious on this issue.  The government plea regarding improvement in ranking by MOODY – the US agency engage in worldwide ranking on the basis of countries economic assets and performance – has recently been rejected.

                     

             Harsh Mander – a human rights worker and writer – has surveyed a large number of villages from Odisha state.  The casual workers, street vendors, slum dwellers, homeless people, laborers, tribal communities, self-help group volunteers, widows, old people are the worst sufferers due to withdrawal of old currency.  Those who have bank accounts have to travel many a times to withdraw a paltry amount and that too due to mercy of bankers.  The youths who have migrated to different cities for work are either unemployed or unable to send money to old parents as youths have refused to accept old notes from the employer.  The farmers are not employing daily wagers for different agricultural operations due to paucity of funds; and, will face vagary of rain god after three consecutive years of less rainfall.  They have to loose entire crops as heavy rains are expected soon.  The misery through which they are passing is touching the hearts of readers. “But Modi devata turned out to be even more cruel than Indra devata,” these sarcastic remarks from villagers explains the worst scenario due to utter negligence and policy failure on the part of central government.  The vicious economic structure in Indian villages has been broken down due to sheer disarray.  “We are already cashless” the remark from half nude villagers is a slap on government when they were asked about cashless economy and its uses.

            The India is vertically divided in to two, the urban and the rural; both are diagonally opposite.  The large section of the society – almost 65 per cent - resides in villages are the worst sufferers.  There is no match between an urbanite computer savy and a person from far flung village as if both are from two different planets.  Modi’s almost all policies were rural centric except the present one.  The Modi government has taken utmost care while implementation of other policies, however, in the present case, the villagers are facing agonies after agonies due to withdrawal of old currency, though objectives were good but implementation is faulty.  How person of Arvind Panagariya’s stature – who is at the helm of affair - understands the need based problem of villagers is a basic question?

Post Demonetization: Vibrant Views

            Former Prime Minister Manmohan Singh is enacting in the meeting of the Parliamentary Committee on Finance.  His demur is on the Reserve Bank of India, its share and beneficence in implementation of demonetization policy.  He recommended the Parliamentary committee to dispose government officials first before it hears RBI Governor on January 18 and 19.  Being economist, Mr Manmohan Singh wants to determine the circumstances leads to its implementation in hustle.  The experts were called for conduce and offer connotations.  The experts were economists Rajiv Kumar and Mahesh Vyas, statistician Pronab Sen and Kavita Rao.  Majority of experts were critical during deliberations.  Singh said “we were discussing when the RBI Governor should appear before panel”.  The government took the decision on November 7 and RBI board stamped it on November 8 - as per RBI note – thus, government officials will be heard first.  This infringed on the autonomy of RBI institution; what Manmohan Singh wants to denounce.  Second, what Mr Singh wants to consummate is, the RBI was not adequately involved in decision making.  Third, the motive behind the policy is not flawless; as assertion changes from time to time; to eradicate the terrorism, nexalism, counterfeit currency – Home Ministry concern - and then deviated to cashless transaction.  Fourth, what steps the RBI has taken to alleviate the cash crunch?  The BJP members of Parliament may oppose any move to censure the Central Government and RBI.

   

            Union Minister M Venkaiah Naidu said that the black money is the malignant cancer to the society, and to exterminate it, the chemotherapy is needed that have side effects.  “The country is suffering from twin problems: corruption and black money.  It needed chemotherapy and surgery.  So prepare for its side effects that are temporary.” he said.  According to Mr Naidu, the Indian economy is expected to be ten trillion dollars form present two trillion dollars by 2030; so support Modi Government.

            Delisting of 255 defunct political parties is another step in the direction of eradication of black money from the society.  Delhi top (52 parties) the list followed by Uttar Pradesh.  Some of the party’s addresses are untraceable; one party’s address is of present Home Minister Rajnath Singh bungalow, while others is the office of CID Jammu & Kashmir office.  Rashtriya Hindu Sangathan is one man’s army located at Indore.  Some of the occupants of the party address never heard about party itself.                 

            Except political parties, the public fury has dwindled substantially due to partial availability of cash.  Villagers and small town residents are still facing misery from cash crunch as against urbanites.  E-commerce Company Snapdeal has launched home delivery of cash scheme for their customers.  Another advantage of the policy is Central Board of Direct Taxes and Enforcement Directorate is now busy guys.  Every now and then they are unearthing old and new currency along with gold and jewelry as well as benami properties.  So far, the Income Tax department has identified 67.54 lakh potential non-filers of income tax return.

            

Post Demonetization: Compulsions and Confusion

            Congress spokesman S. Surjitwala nomenclature Reserve Bank of India as Reverse Bank of India, since, the central bank has reversed the order following protest from customers and bank employees.  Two days ago, the RBI has issued directives to the banks regarding one time deposition of old currency notes above Rs 5000 by the customers and to explain at least to two bank officials regarding delay in deposition of these notes.  Following protest, the RBI withdrew its circular.  The bank federation, on December 21, protested against frequent changes in rules and regulations by RBI which leads to confusion.  Some of the banks are protesting in view of availability of less cash.  The union opined that the duty of bank officials is related to banking system and not of investigative agencies.  Another objection is on availability of cash to PSU banks vis a vis private banks; the HDFC, Axis and ICICI are getting sufficient cash.  Third, circular issued by RBI reaches bank branches after three days, but, announce it immediately through media and then people confronts with bank employees that leads to chaos.  Smooth supply of cash to semi urban and rural area is the biggest worry; the public is confronting with bank officials for want of cash especially of small denomination notes.

            The economic affairs wing of central finance ministry simultaneously issued circulars along with RBI; it creates embarrassment among customers and bankers.  From November 8, sixty circulars / orders / amendments have been issued by aforesaid agencies.  In the last communique the RBI amended the circular regarding KYC compliance that unnecessarily resulted in wrath from the customers.  Restriction on withdrawal of money is another confusion and confrontation issue; “the movement they (government and RBI) take away the restrictions, everybody will want to go and draw out a lot.  That becomes a problem.” SBI Chairman Arundhati Bhattacharya said.

            Another compulsion is RBI Governor and Economic Affairs Committee Secretary of Central Government will have to explain the detail facts regarding demonetization to Parliamentary Public Accounts Committee headed by Veerappa Moily in the second week of January.  Let us see the outcome of the PACs stricture and recommendations.  Only positive side is, till date RBI has released new currency of Rs 5.92 lakh crores and till mid of January sufficient currency will be circulation.  The Monetary Policy Committee of RBI has stated that the policy will have negative impact over industrial output.

            From the day one the RBI Governor Mr Urgit Patel is in limelight for one or the other reasons.  Like a shuttle, Mr Patel is unnecessarily moving from pillar to post and facing the orchestra from all the side.  He has no say in policy implementation; it suffices from the way the things are changing like chameleon from the day of announcement of the policy.  Probably, Raghuram Rajan (Ex RBI Governor) could not have yielded to the move from PMO office; this might be one of the reasons of his exit from the illustrious post.

       

Post Demonetization: Present Status

            The towering personality from the arena of political circle and Andhra Pradesh Chief Minister Chandrababu Naidu expressed deep concern, the way the scheme is being implemented.  In the beginning he welcomed it wholeheartedly and now deflects from the original stance.  According to him, the basic purpose of demonetization has been defeated; “there was no solution in sight even after more than 40 days” is his death-rattle.  Naidu heads 13 members high power central committee on demonetization issue, “I am breaking my head daily for two hours, but we are unable to find a solution to this problem,” he said.  How the people are striving for money and how farmers and small businessmen get frustrated is his the biggest mental badger.  On October 12, he himself wrote to Prime Minister regarding scrapping of high value notes of Rs 500 and Rs 1000.  He expressed umbrage over introduction of Rs 2000 note.  His objection is on RBI and banks inability for transformation from cash to cashless as well as their way of handling the present crises.

            Election commission of India wants to delist at least 200 odd defunct political parties who have not contested election from 2005; have not filed income tax return, and could do nothing but involved in money-laundering operations.  EC inform Income Tax department and hope they will scrutinize the financial transactions of these parties.  At present, there are seven national, 58 state and 1786 registered unrecognized parties in India.  A bold step against non-serious parties will be a lesson for others, with regards to transparencies in term of transactions and donations.  This is the right time for political reforms especially in view of unnamed donations the political parties receives, that leads to black money generation.

            From the day one, the black money is unearthed from different sections of the society.  Till date, more than Rs 3 thousand crore of unaccounted money has been identified; more than Rs three hundred crore new and old notes and equal amount of gold and jewelry has been seized.  Many bank officials have been suspended.  The agencies are issuing letters to those in whose account suspicious transactions are noticed.  The co-operative banks are under radar.   Seizure operations are going on.     

            If you look at the whole issue from birds eye view, in nutshell, you will notice that all are frustrated but satisfied due to hard hammer thud over black money hoarders.  The common public will exhibit sigh of relief even if black money menace will reduce down to some extent.  In India anything is possible; the only thing is that, the public must realize its importance.  Take an instance of cell phone; the common masses have accepted it within a span of a decade.  Farmers, maid servants, small venders so on and so forth are using mobiles as if it is part and parcel of their life.  It is likely that demonetization along with cash less transaction will transform India in to a superpower; provided, the Prime Minister Modi and his dedicated team should act affirmatively in the positive direction and satisfy the basic need of common people.  

Post Demonetization: Banker’s Narrations

            State Bank of India Chairman Arundhati Bhattachrya, on and often categorically is advising the central government on many issues.  The latest suggestion is worth to note.  The government should charge a levy on cash transaction above certain limit after normalcy restore;   paradigm change will be noticed soon from cash to cashless transaction.  “Cash is a huge burden.  We don’t understand it as it is not immediately visible.  The physical infrastructure to maintain cash is not cheap.” She said.  The present cash to GDP ratio (12%) reflects the poor digital transaction, although efforts are now underway in this regard, according to SBI chief.

 

P. Chidambaram former Finance Minister levied cash withdrawal tax of ten points above Rs 10,000 in 2008 with the view to desist from prevention and laundering of black money, but was abolished in 2009.  Her explicit problem is handling of cash, as it is a long and tough exercise.  The bank has to bear the cost of maintenance of infrastructure need to keep cash, payment to staff, security and transportation cost, etc.  Due to paradigm shift, the charges of re-calibration of ATMs and additional auditing charges are bound to borne by the banks.  “The cost is something that the government should look at and help us”, she asked.  The additional financial burden is going to hamper the total profit during current fiscal year; thus will nose dive the share prices of PSU and private banks.

All of a sudden the complete banking system is in limelight of print and TV media.    The Reserve Bank of India, Central Government and general public are putting high pressure on day to day functioning of banks.  On the other side, the image of banks has maligned and tarnish by some unscrupulous bank officials.  Banks are hiring services of hundreds of Chartered Accountants to restore its credibility.  The CA firms will audit the branches to unearth any irregularities on the part of bank officials and customers.  Monitoring the footage of CCTV will assist them to locate the culprit.   They will scrutinize the documents as per day to day guidelines led down by RBI and Finance Ministry.  PAN verification of high value transaction, bulk disbursement, Jan Dhan accounts, NEFT / RTGS transaction and many more scrutiny will be undertaken before finalization of the report.  The auditors should not take it lightly using random sample method of auditing.  The government and RBI must keep control over CAs nefarious activities.

From political point of view, the governmental agencies must exercise arduous task regarding any political angle in sabotaging the image of ruling party by the bank officials.  It is an axiom that bank officials are hand in gloves with hawala marketers, builders, black money hoarders, businessmen, industrialist and many more.  What dirty tricks they are playing since decades needs to be ascertained; otherwise the demonetization program undertaken by the government for the upliftment of common public will be sabotaged in the initial stages itself.

                    

Post Demonetization: Tharoor’s Views

            Congress parlous parliamentarian Shashi Tharoor seems to be a child prodigy who knew how to impressively debate a topic; that has proved once again while replying queries from Indian Express staff.  In his opinion there are inherent flaws in its implementation in astonishingly incompetent manner.  “Nobody in the world has done this” he said while commenting on illegality of old currency in just three and half hours.  The size of new notes and re-calibration of 2.5 lakh ATMs by 55 thousand engineers makes government amateurish, he commented.  He has objection on changing of the goalpost.  His masterstroke on BJP government is “there has been a complete disavowal of responsibility and culpability in these failures, which is also troubling”.  Stacking of brand new notes by few, while ordinary public in long queue is another failure, he expressed.  He also objected on absence of infrastructure for cashless economy.  His last comment was “ambitions are exceeding groundwork and ability to fulfill it”.

            Though the party he represented is in complete befuddlement, his adherence to party’s ethos is noteworthy.  His stand on parliamentary democracy is par excellence, and reflects his upbringing in a family where a tenet of life is more important than the position acquired.  “My voters have not sent me for disruption” indicates the stature and richness of his eternal views.  Disruptions have become deeply en-grained in our parliamentary practice, he said in the saddest tone.  His body language, mastery over oratory and demeanor reflects the ideal personality he possesses.  To strengthen the parliamentary democracy such towering personalities do require in large number; what a shame, ruling and opposition parties are behaving in irresponsible manner.

            

Post Demonetization: Political Gimmick or Battle against Corruption

              Probably, nowhere in the world, the politico-publicity stunt was experienced due to initiation of popular policy like demonetization.  Digging the past, Modi said, even then PM Indira Gandhi has not shown courage to implement demonetization.  “For them party is bigger than country, but for us, country is bigger than party” said Prime Minister.  While quoting reference of former RBI Governor Y V Reddy, PM said, the Benami Transactions (Prohibition) Act was passed in 1988 but was not implemented; if applied today then “they will shout”.

       

          Congress and CPM hit back at PM Modi for his speech.  Congress Vice President Rahul Gandhi while addressing rally at Goa said “All cash is not black and all black money is not cash.  The policy helped India’s rich to super-rich, and fire-bombed the 99 per cent of honest poor people of India.  The super-rich – 50 families travel with PM – have benefited from demonetization”.  Congress leader Sibal said “PM is neither aware of history nor does he try to find out”.  He quoted Rajendra Prasad’s remarks on demonetization before the independence that it will hit hard large section of society.  “Would Modi also call him anti-national?” Kapil asked.  “It is the CPM pressure on government of Morarji Desai that high valued notes were not normal exchange currency”, said CPM Secretary Sitaram Yechury.

             Today’s Indian Express editorial – PM prefers to speak outside Parliament, Rahul says he will only speak inside - is worth to read.  The opposition is divided and confused, preferred to stall the house than to debate; the government deviated from floor management culminated in to senior parliamentarian BJP leader L K Advani’s adverse remarks “felt like resigning from Parliament”.  The blame goes to the government for logjam.  All are loudly speaking outside the Parliament and slinging stones and mud over others.  Regarding Rahul Gandhi’s bombshell and further silence, “will he now tell the party and the people to wait until the Budget session? Each day of silence dents his credibility” the editorial asked.

               

          Supreme Court three judge bench has transferred all cases to Constitutional Bench of five judges to look after all aspects of demonetization scheme.  The Constitutional bench will give verdict on nine issues.  The verdict will certainly eased out hardships and sufferings faced by the general public.

        The general public concerns about the Supreme Court verdicts rather than Parliamentary proceedings.  Both the houses are now-a-days as good as nonfunctional.  The Supreme Court is slowly extending their tentacles in the realm of parliamentary activities and for which only Parliamentarians are responsible.  Somebody should strictly impose rules and regulations for parliamentary day today exercise; it may be the President of India, the Supreme Court or the highest body - the people of India.  Or otherwise, abolish parliamentary democracy and accept some other type of executive and legislative functioning methodology.

Post Demonetization: Shades and Depth

            No one ever thought of regarding the different shades and depth of the demonetization policy, when scheme announced by the PM Modi.  In the first instance, postulations were, the scheme will raked out black money and will have long term effect on economy.  The picture differed; briefly, everyday old and new currency is being seized from across India, the major junk of old currency is being deposited in banks, the opposition is at its high peak and average population is experiencing heat of demonetization.  The subject is still hot in print and TV media.  And, the future prospect of PM Modi is at stake.  The political graph was at peak during surgical strike at LOC and now at nadir due to present politico-socio-economic fuss.  S A Khan AIIMS Professor in his article in Indian Express reported the difficulties in health sector due to cash crunch.  Already 16 top companies have registered sharp decline in their advance payments for the third quarter, indicating the economy is in shamble.  So far the journey from the day one is exhibition of different shades of political and social spectrum.

  

BJP’s electoral prospects likely to be affected in ensuing election, concerns Uttar Pradesh Parliamentarian.  Mamata Banerjee West Bengal Chief Minister is provoking RBI Governor and urged him “to stand up against policy onslaught against the public”.  In her opinion, five crore workers have a wrath due to draconian policy.  RBI Governor Urjit Patel has shown black flags and manhandled by Congress workers. What a shame?  Resentment over scheme was expressed by Uttar Pradesh Chief Minister Akhilesh Yadav.  While attacking BJP, he said “those who promised to bring ‘acche din’ have forced the people to stand in queues”.  Nobody knows what cards Rahul baba is playing.  Congress as well as opposition parties – including stalwarts of Congress – are in dark about what information he possesses about corruption charges involving Prime Minister.  Logjam continued in Parliament; both sides are accusing each other.  Attorney General Mukul Rohatgi has difficulties in replying queries from Supreme Court.  These are the political activities on 37^th day of demonetization.

                       

          Some incentives were given so as to have positive impact on bringing maximum persons under tax net.  Government is planning to award customers and merchants to strengthen the policy of digitization.  To the other side, officials said that the common man will have to face difficulties even after December 30 deadline.  The cash withdrawal limit will not be raised in near future, as only Rs 5 lakh crore new currencies have brought in to circulation.  As per Economic Affairs Secretary, 50 per cent of worth of withdrawn currency would be in circulation by the end of the month.  The bank officials are under scanner of investigation agencies, facing public abuses and threats, tremendous pressure due to over load, and thus growing resentment in bank employees, as observed.

Post Demonetization: 38th Day

            For employment generation and for self-employment enhancement, cleaning the system of black money and corruption is very high on agenda, PM Modi reiterated.  Economic transformation using digital and cashless economy, the country is witnessing, he told while addressing video conference on ‘Economic Times Asian Business Leaders Conclave 2016’ in Kuala Lumpur.  In his remarks, Najib Razak, Malaysian Counterpart praised PM Modi “being good reformist he has attempted something that lessor mortals would not have attempted.  If you are courageous enough to implement reforms, you will reap the rewards”.

            To carry far ward the massage, more than a dozen ministries have given presentations to PM Modi regarding spreading awareness on digitization of transactions.  In contrast, Kerala Opposition leaders protested the policy in connection with role of co-operative banks that has direct impact on co-operative and agriculture sector movements of the state, and also on non-resident keralites that have deposited money in these banks.  Rahul Gandhi, Congress Vice President described the move as “monumental disaster”.            

            The Central and State Government are exerting in the direction of PM Modi’s cherished child ‘cashless economy’.  They are launching new schemes; the Haryana government recently notified that the state employee (2.35 lakh) should make at least one digital transaction within a week time and will have to submit the proof.  While, the employee organization has condemned the move, and said that the state government has no right to compel the employees to do online transactions.  The motive is good but implementation is inappropriate.  In Chennai, both, the cash crunch and Vardah cyclone are hitting the people hard.  The cyclone has disrupted the electricity supply and also telecom and internet services.  So, Chennai faces one or the other type of calamities – cashless, the additional - during December month.

            Controller General of Accounts, M J Joseph has warned Central Government in view of pressurizing e-wallet transaction involving government services and utilities.  He said “we should think through procedures first so that we don’t land ourselves in a mess later”.  Safety, custody and control and flow of funds along with procedure details are the liability and must be streamlined to ensure that the money reaches the coffers.  So, government in association with Reserve Bank of India shall have to decide the procedure first, otherwise, it may lead to scams after scams.  The CGA has no objection on new technology, but things being complex and auditable, the fund at last must reaches the RBI is the foremost duty with transparency.

            There are many firms/manufacturing units that have given lay off to the employees and the last payment is in demonetized currency.  Many workers are agitating on streets.  First and foremost, the employer should be send behind the bars - at once – for illegal old currency transaction.   Good news has been reported from Pune; after demonetization the export of grapes has substantially been increased.  The vineyards activities have not affected by the policy; all payments are through banks.  Some voluntarily and others because of compulsion are shifting towards cashless transaction.  The live example is of Agriculture Produce Marketing Committee, Nashik has initiated the process whereby farmers are receiving payment through cheque.   The problem lies in long serpentine queue as time is precious for them.  North East region of India is in severe cash crunch.  The majority of people are not connected with banks.  They have not yet opened the bank account.  Border villages are severely affected.  They are using Bhutanese currency in exchange of Indian.

            There is need to ascertain the effect of policy on investment of Indian companies abroad. At present, the investment plunged by 70.9% in November month.  While, foreign portfolio investors have pulled out over Rs 56 thousand crores since inception of the reforms.  The impact would remain for further six months, experts quoted.  The rupee has been depreciated by 2.4% in these months against US dollar.

            The income tax rate and interest rate is likely to come down, said A R Meghwal, Minister for State for Finance.  Opposition is likely to raise this issue in Parliament as the announcement is the breach of secrecy of the forthcoming budget.  The Income Tax department will take action against those who will revise and file their IT returns.  Rs 500 old notes is out of circulation from today midnight, however, the notes can be deposited in banks.                        

                              

Post Demonetization: 36th Day

Bimal Jalan, Ex Reserve Bank of India (RBI) Governor pointed out that there must be reason, war or security threat, for demonetization.  Jalan raised the question “why now”.  In the present context, there was no need of secrecy unless the country faces emergency.  People should have taken in to confidence and also given warning to black money hoarders, what he proposed.  He opined that 90 to 95 per cent people are innocent.

      Banks are instructed to preserve CCTV recordings of complete operations until further instructions, as per RBI notification.  It will be helpful for enforcement agencies to deal with matters related with illegal accumulation of new currency notes and many more.  A total of 41 notifications are being issued by RBI.  As per RBI survey, 90 per cent (94.2 crore) of debit/credit card holders are using cards for withdrawal of cash from ATM and not for other purpose such as PoS terminals (8 per cent) for purchase of goods and services.  Hardly 50% of cards are in use even though rate of installation of PoS terminals has increased many folds.  There is an urgent need of campaigning for multiple utility of these cards.  In October, Rs 29.9 thousand crore point of sale transaction was recorded through cards. 

The government has announced waver of sales tax on digital payment up to Rs 2,000, petrol diesel purchase, railway tickets, state own insurance policies.  The loan growth at banks has nosedived to Rs 1 lakh crore (6.6%) in the first fortnight after announcement of demonetization scheme as against average growth rate Rs 30 to 35 thousand crore fortnight before.  At present, the main objective of the bank is to cope up with cash crunch and so the normal business of bank was hampered to a great extent.  The operation costs of banks have gone up after announcement.  Waiver and reduction in charges and fees on credit cards and ATM use and PoS transaction has reduced bank’s income.                                         

            

           Former Union Finance Minister P. Chidambaram is raising questions after questions from day one; though he himself has not contributed anything in strengthening the economy on one hand and action over black money hoarders on other.   “Is the money going directly to them from the currency chest” Chidambaram asked at a press conference and described it as “the biggest scam of the year”.  He himself being advocate, is pressing some trifle matters like the cases should be probed not by Income Tax department but agencies related with criminal investigations etc.  He claimed that foreign investment has brought down by Rs 30 thousand crores.  He is blaming RBI for announcing policies that are pre-scripted.  “The narrative has been shifting from the original objectives of elimination of black money, fake money and terrorist funding to a cashless economy.  Where in the world the economy gone cashless on such a big scale (3% to 100%)?”, he said.

     

           The Parliament is in session.  Perhaps, there will be discussion with brick bat from both side but without voting.  It seems, the opposition will play street politics to garner the votes than discussion in the Parliament; three days are left to complete the winter session.  Contrarily, Income Tax and Intelligence wing recovering huge quantity of new and old notes.  So far, more than 230 crores of notes have been seized.  Bank officials have played a major role in this racket and they are under scanner.

          Surjit Bhalla in today’s article – Indian Express – vehemently stated that all economists are against demonetization, it is the political will that is against main stream of politics.  As per author’s estimate the black money is Rs 8 lakh crores.  If all - Rs 15.44 lakh crore – the money deposited in banks then the government will earn Rs 2.5 lakh crore in form of tax that itself is a big achievement.  The positive response from Union Finance Minister is the tax rate will slash down due to demonetization.

           At least PM Modi has exhibited political will – against the flow - to wipe out corruption. He has no other thought than to squeeze the top echelon of the society that has enjoyed the fruits of our loose democratic system.  We the common citizen wants better infrastructure, better facilities, cleanliness, governance, education etc.   Our demands are meager and for which money is required.  What a person of Modi stature will do is to disturb the livelihood of bad elements and provide money for a good cause.  It is shameful to note that hardly one per cent are controlling major stake of our economy.

  

Post Demonetization: 34th Day

            The government has circulated Rs 5 lakh crore of new currency.  It is approximated that a total of Rs 7 lakh crore old and new currency notes are in circulation.  Rs 13.23 lakh crore of old currency of Rs 500 and Rs 1,000 has been deposited in banks.  On an average, daily Rs 12,500 crore to 15,000 crore of new notes are produced and distributed.  So the total figure the government is likely to add is Rs 2.5 lack crore of new notes within next 20 days.  Approximately, Rs 9 to 10 lack crore notes will be in use by the end of December 30.  Now-a-days old notes are deposited in the banks at an average rate of Rs 12,500 crore per day as against 45,000 crore at the commencement of the policy.  The withdrawal rate has enhanced to Rs 16,000 crore per day and expected to increase the demand on every passing day.

            To mitigate the demand of currency notes and special ink, the government is planning to import 20 thousand tons of currency paper; the general demand is 8 thousand tons.  The general comprehension is that the country import currency paper; however, most of the paper is manufacture by Reserve Bank of India.  The purchase order will be distributed among the firms that have already obtained security clearance.

            Demonetization scheme has negative aftermath over manufacturing sector.  In and around capital, thousand of regular workers became jobless as the production has halted due to currency crises.  About 70 thousand workers from a thousand utensil manufacture units have given lay off.  Instead of going back to respective villages the unorganized workers are searching new jobs with less pay and dignity.  It is astonishing to note that, the owners have paid them cash with old notes of Rs 500 and Rs 1,000.  The government should take stern action on businessmen at an earliest so that the workers will resume their old jobs without any monetary losses and tribulation.

            Harish Damodaran has extensively elaborated the concept of money in the context of present policy.  The extract is, the money is in physical form with public and deposits in banks called ‘store of value’.  As inflation increases the money value dwindles and hence money is transmuted in to financial asset say share/debentures, mutual funds, government bonds, insurance policies, provident funds etc and physical asset say gold, land and property.  “When saving accumulates to certain level, a significant part gets converted into non-monetary assets” Harish said.  The animadversion behind present policy is that the Modi government is targeting arduously 6 per cent of total black economy.  He said only 40% of annual saving is in ‘financial form’ and of which ten percent in currency form.  Approximately, 45% is in bank deposit form.  The total money available on October 28 was Rs 124.15 lakh crore (currency + bank deposits); of which share of currency notes was Rs 17.01 lakh crore (13.7%).  So, 87% old currency of Rs 500 and Rs 1,000 was demonetized (Rs 15.44 lakh crore).  He said, the whole economy (GDP) lies on sale and purchases of goods and services, veraciously the currency notes in circulation only.  The present policy has rived the back bone of economy.  “It has caused an unprecedented loss of the vital medium of exchange, or oil lubricating the wheels of commerce” Harish added.  As per RBI circular hardly 28% currency has been replaced till December 7.  Well, the solution is how fast the lost liquidity can be restored; one through replacement of currency by new notes and disseminating cashless economy.

            Nandagopal Rajan in his article expounded pros and cons of cashless economy.  He warned government the pace at which cashless economy is being bestowed to general public.  In his opinion the digital safety is more important than digital swiftness.  Cashless economy will open Alibaba’s door for hackers.  Giant personalities like Rahul Gandhi have got the bitter taste of hacking, so better not to talk about illiterate masses.  “Crime related to fraudulent digital payments will be news of the day” he anticipates soon.  “Digital safety is more important even if it is not that swiftly” he said.  In his opinion, first and foremost duty is formulate stringent laws and penalties.  He has rightly pointed out that the general masses should be taught how to stay safe online than cashless benefits.

            One fifth of the total 25.8 crore Jan Dhan accounts are still with zero balance.  The total balance in accounts is Rs 74.6 thousand crore of which Rs 29 thousand crore deposited after proclamation of the policy.  The good part of the story is the rate of deposition of amount in these accounts is declining as the days advances.

            It is felicitous to cultivate masses with regards to cashless economy and menace prevailed while dealing online business/transactions.  The government should look after the safety side of the public money by formulating stringent laws and also cyber security.  Fire walls needs to be established at each step.  Specialist from the field of cyber crime should be educated regarding various methods of control of hacking.  Hackers from Pakistan, Nigeria and many more countries will play havoc if cashless economy will flourish without comgerment.  Second, the government should take stern action on gold and benami property holders that are controlling 94% of our precious economy.

Post Demonetization: 33rd Day

            Banks will remain closed for three days.  At many places ATMs are closed due to cash crunch.  It seems the cash crunch is partly artificial.  Most of the new currency notes released by Reserve Bank of India are not reaching to the last destination.  Approximately Rs 4 lakh crore new cash is in circulation along with old one.  Now the question is where is the cash?  It is likely that before it reaches in the hand of common man of Mr R. K. Lakshaman part of it got lost in thin air.  The probable destination is money hoarder, hawala marketer, smuggler, politician, black money generator.  Definitely, the bankers had played major role in hand in glove deal.  To search out the currency is likely finding needle in hay stack.  Non-availability of cash has suspended operations in tea garden of West Bengal.      

           The Human Resource Development ministry has issued circular to central Univercities, IITs, IIMs etc regarding participation in cashless mission.  It is mandatory on the part of faculty and students to propagate advantages of cashless transaction to people and for that marks will be allotted.  Opposition is criticizing the issue.  There is spurt in cashless transaction mission and neck throat competition noticed between varied companies.  Open any channel within a minute you will find e-payment advertisement.  Government is going to promote digital transactions in association with NITI aayog by announcing weekly and quarterly lucky draws.  The scheme would initiate e-money in public of lower strata.  So government is working on many fronts to bridge the gap between urban and rural masses.  The state government is promoting digital economy using its resources.  The Maharashtra state is rising the force of two lakh volunteers to study individual sector at rural and urban area and suggest ways and means to align with a cashless economy.  The target is 50% cashless transactions within a span of a year.  

            Income Tax department is suspecting 1% account holders have deposited black money.  They will have to scrutinize around 40 lack accounts.  Total strength of IT department is 8000 of which only half staff will be available for scrutiny.  How to complete gigantic task within stipulated time is a big problem.  The capacity of IT department is hardly three lakh cases in a year.  Innovative approach - especially computer programming for data analysis – is needed for careful selection of suspicious cases.  Government has issued directives to IT officials to avoid undue harassment to general public in view of reopening of past assessments and ensure necessary and strict compliance.                             

            Demonetization has derailed the robust economy, said Mamta Banerjee, West Bengal CM while squarely attacking PM move on e-economy.  Prime Minister while addressing party workers of Gujarat state asked them to promote digital transactions policy to help bring people under cashless economy in a bid to curb corruption.  The observations made by P. Chidambaram as usual are half true.  He said “Banks run out of cash within a few hours of opening and most ATMs are dry.  All major markets remained closed.  Retail business is down by 80%.  Millions of people have been deprived of their daily wages”.  Some hiccup is there otherwise things are smooth if you take stock of the entire country.

Post Demonetization: Thirty Second Day

            Supreme Court (SC) passed strictures on economic reform policy.  Observations of SC are noteworthy; “When you framed policy, was any mind applied? Was there a plan or was it brought in an impulse?” court questioned and no satisfactory response was received from the government.  On December 14 the SC will hear the argument from the respondent.  It is the duty of Modi government to fight the battle, if looser; government will have to resign.

            The Income Tax department and Enforcement Directorate decided to begin massive assessment exercise and will scrutinize all offbeat and suspicious accounts.  To outflank the unending official procedures, department is planning to bestow the discretionary powers to concerned officers.  Processing and inferring more than 40 crore accounts is not an escapade.  Member of task force on direct taxes said “The size is large, there is need to work out rational solutions.  It has to be rule based and non-discretionary.  Otherwise, the return of investment in such investigation may be negative.”  The observations are extremely important, if officers are granted discretionary powers then can be used as per their vagary (Inspector raj).

            Let me quote two examples.  Jewelry firm from Delhi has earned Rs 75 crore between 8 pm to 12 midnight on November, 8; the IT department is investigating at three branches of a firm regarding sale of 200 – 250 kg of gold.  Surprisingly, the jeweler has not obtained PAN card details of customers.  The Jeweler intentionally showed sale below Rs 2 lakh per customer since the law permits sale below the limit without PAN number.  The proprietor denied allegations against him.  Second, a novel way of cheating was noticed.  Money launderers have open fake accounts in the name woman and her parents without their knowledge and deposited Rs 4.25 crores.  When concerned questioned the lady, it was an ictus for the family.  Such instances are the tip of iceberg.  It is practically difficult to unearth each and every misdeed.  On an average, every day, minimum of Rs one hundred crore of illegal transactions, hard currency transfer and alleged wealth is being detected.

            To outflank the money crunch crises, innovative methods are being utilized.  Organizers of annual agricultural fair near Pune have distributed coupons of Rs 100 to farmers in exchange of Rs 2,000 note.  Internal currency system was found useful and farmers were happy to carry out financial transactions.  A total of 10 lakh visitors have visited a fair and business of Rs 10 crore was recorded by the organizers in a day.

            Figures across the country indicated drop in financial activities in real estate sector.  To quote a few, the percentage of drop in real estate sector is 39% from Mumbai, 16.4% from Delhi, 43% from Gujarat, 66% from Jharkhand, 20% from Punjab and 30% from Chandigarh.  In above cases, the deal was done before annunciation of policy, however, sundry number of deals is registered after November 8.

            It seems, politicians are playing their own cards in and outside Parliament.  The unity among UPA as well as within NDA is shattered.  Shiv Sena happen to have close association with opposition; and JD (U) fraction, BJD, TSR are affiliated to ruling party.  In Rajya Sabha, because of lack of quorum (minimum 25 MPs) the house adjourned till coming Wednesday.  In Lok Sabha, the opposition was ready for discussion but ruling party has not allowed to debate, resulted in huddle due to slogan shouting and blame game.   Rahul Gandhi, Vice President Congress Party told the media that he wanted to speak about the biggest scam committed by PM single-handedly.  The opposition is questioning regarding reduction of import duty on wheat from 10% to zero when the bumper buffer stock is available, it probably due to cash crunch and to avoid food riots.  Union Commerce Minister and Industry Minister Nirmala Sitaraman stated that the policy is to make economy digitized and cleaner.  The Reserve Bank of India has instructed banks to circulate new Rs 500 notes through ATM.  “Digital transactions have surged up to 1,000 per cent” said Law and IT Minister, Ravi Shankar Prasad.  The decision of printing of plastic currency notes is in progress, it was announced by the government in the Parliament.

            Mr Kaushik Basu, former Chief Economic Adviser of India warned the government regarding enhancement in sufferings of people and also new form of corruption practices in society due to demonetization.  Due to complexity in the policy, collateral damages are many more.  The difference - deposition of Rs 12 lakh crore old notes minus circulation to the most Rs 6 lakh crore new notes - will hamper the overall growth.  In his opinion the only poor are the sufferers.  There will be eminent slump in growth of economy as GDP is likely to go down to 6.9 per cent, he said.  He described the term “money mule” for those who will convert black money to white.  “Black money is 20 to 25 per cent of GDP, some time will be required for digital mode so as to curb illegal practices, change in mind set is required, work burden has increased unnecessarily” are some of the quotes from his lecture at IIT, Mumbai.

  

Post Demonetization: Phase II

Finance ministry has waved off service tax for e-transaction below Rs 2,000 as the first step in the direction of cashless economy.  To boost up the cash less economy the government affirmed discount offer on purchase of petrol and diesel (0.75 per cent), monthly or seasonal railway tickets (0.5 per cent), railway accidental insurance cover up (Rs 10 lakh), railway catering, accommodation, retiring room services (5 per cent), buying insurance policy from PSU companies (8 – 10 per cent) and toll plaza (10 per cent).  ‘The Government wants to increase the pace of this switch over’ Finance Minister said.  The ministry will provide two lakh Point of Sale (PoS) machine to villages free of cost; and Kisan Credit Cards holder will be provided with Rupee Kisan Card for digital transactions.  Paradigm shift was noticed at petrol pumps; Rs 360 crore (40% of total) transaction per day is through digital mode.  The ministry is deploying PoS machines at those places where rural masses do cash transact. The e-payment will reduce down burden on cash transaction on Rs 2 lakh crore in petrol and diesel and Rs 3,000 crore on railway.  A major section of society (58%) is utilizing railway’s e-ticket facility.

         

On 30^th demonetization day the government agencies have seized more than Rs hundred crore old and new currency notes and gold bars costing more than Rs 100 crore.  Names of politicians, businessmen and actors are surfaced in print and TV media.  AIDMK leader and businessman Shekar Reddy, TV actor Rahul Chelani, bank officials, contractors, middlemen and many more are detained and questioned about its source.  Bank account of hundreds of Mumbai residents has been allegedly used paying 15% commission.  Rs 30 lakh has already been recovered from the person who has deposited the amount.  The businessman, agent, sub-agent, account holders and many more are under IT scanner.

 

Prime Minister of India said ‘yagna against corruption, terrorism and black money will empower the poor people and benefit coming generations’.  He tweeted that the short term pain will pave way for long term gain.  While commenting on PM move none other than Congress Vice President Rahul Gandhi said that ‘the bold decision can be a foolish decision’.  He said more than hundred people died due to single handedly autocratic decision and PM is changing narratives again and again.  ‘The centre has turned into a salesman trying to sale plastic cards.  PM has no moral right to continue and must resign.  People must have hassle-free accesses to their own money.  Who is responsible for death of 90 people’ Manta Banerjee Chief Minister of West Bangal said.  Lalu Prasad Yadav RJD chief asked if no change is observed after 50 days, will PM tender his resignation.  Shiv Sena Chief is going to spell their stand after 50 days period.  The party is neither opposing nor welcoming the move; however want reprieve to common man soon.

 

In Parliament, the opposition party wants discussion without any condition, whereas the ruling party is demanding apology from opposition for stalling the proceedings for 16 days.  It seems the whole session will be washed out without any discussion.  ‘Responsibility of running the house is that of government and speaker’ Rahul said.  When Congress was in power it has not taken single step against black money, said Finance Minister.  Rajya Sabha Chairman Hamid Ansari rebuked the treasury benches for disrupting the proceedings.  ‘How can the treasury benches be agitating?’ asked Ansari.  The demonetization policy has given abrupt shock and surprise to the people, has been referred as Tsunami by economist Lord Meghnad Desai.

      

The ministry of external affairs is in contact with finance ministry to resolve monetary issues of some of the embassies facing cash crunch.  The assurance for smooth functioning was given to the Dean of Diplomatic Corps Frank Hans Dannenberg Castellanos who represents the voices of 157 foreign missions.  He sought the PM intervention and said the present situation is the serious breach of Vienna Convention.

Mr Devara serving IAS officer and former Secretary, Department of Cooperation, Maharashtra State studied the role of co-operative banks in the context of socio-economic development of a farmer.  His findings are the eye opener for the policy makers.  The scheduled commercial banks in India have 1.33 lakh branches and 2.2 lakh ATMs spread over metros, medium and small cities and towns.  While, the post office has 1.55 lakh branches across the country.  There are about 370 district cooperative banks with 14 thousand branches; also 93 thousand primary agriculture credit societies.  The society and co-operative bank is spread over Maharashtra, Karnataka, Kerala, Tamil Nadu and Gujarat.  There network is rural based.    The RBI has not allowed them to exchange old notes with new one.  It has affected routine functioning of banks that are catering the daily needs of the farmers.  Primary survey indicated that it has untoward effect on harvest during kharif and sowing during rabi season.  The societies and co-operative banks render short term loans to the farmers.  National Bank of Agriculture and Rural Development (NABARD), state co-operative and district co-operative are linked together.  NABARD is the controlling authority.  The policy has dried off their liquidity thereby shattered the trust and confidence among rural flock.  The plea of politician was to let them function as that of other PSU and if fraud or irregularities happened then take stern action as per rules and regulations. 

Demonetization policy has direct impact over agricultural economy.  The prices of sugar, jaggery, paddy, vegetables and what not are falling down than the production cost.  The market price is lesser than minimum support prices.  The demand is subdued as there is little cash available in market.  The sugar mill owners have not paid cane prices to farmers for the year 15-16.  The move is definitely suicidal for the agrarian population unless urgent steps are taken at once. 

                     

Post Demonetization: Month End Account

            Finance Minister Arun Jaitley’s said ‘The issue should be looked at from the long-term impact that is going to have on the Indian economy’.  The shortage of new currency had to be substituted through digital means, he reiterated.  As per the assessment of Jaitley, two to three months will be required to streamline the economy.  The Reserve Bank of India (RBI) has not changed the repo rate at 6.25 per cent due to uncertain global and local factors.  Now the RBI growth projection for the financial year 2017 is 7.1 per cent as against 7.6 per cent as ascribed earlier.  As per the record, Rs 3.81 lakh crore new currency notes of different denomination is in circulation from the date of proclamation of the economic reforms.

 

Repercussion of demonetization policy is buzzing in state assemblies.  The District Central Co-operative Banks had widespread network in many states and are not allowed to deposit old currency by the RBI.  All co-operative banks are controlled by politicians.  Precautionary measures were taken by RBI in view of fear of parking unaccounted money.  Mr Fadnavis Chief Minister of Maharashtra state along with opposition leaders associated with these banks visited Delhi to meet higher ups regarding permission to deposit old notes in co-operative banks.  Politicians are always of same tribe barring few.  In Maharashtra state assembly, Mr Prithviraj Chavan Ex Chief Minister has asked a valid question on floor of the house.  ‘Rs 62 lack cash was recovered from the house of Arun Jaitley.  What was the cash doing in the finance minister’s residence?’ he questioned.  Shiv Sena, the alliance partner of ruling party, the unsatisfied soul, is raising different issues from the day one.  Congress party is expressing anguish in Madhya Pradesh State Assembly.  They are squarely blaming Mr Narendra Modi as farmers and daily wagers are facing lot of difficulties.

     

L. K. Advani senior BJP leader and parliamentarian disgruntled about din in parliament and for which Lok Sabha Speaker and Parliamentary Affairs Minister hold accountable.  He asked who is running the house and Why not sine-die the house when Lok Sabha was often adjourned.  ‘Number one liar is the BJP party’, said Samajvadi Party leader Mulayam Singh Yadav at public meeting in Bareilly Uttar Pradesh.  He rebuked the government by saying ‘entire black money is in the hands of hundred families of the country and one among them is PM’s friend.  The people will give befitting reply to BJP in ensuing election’.  Shiv Sena President Uddhav Thackarey met Home Minister Rajnath Singh and expressed displeasure about the way the policy is being handled.  Thackarey is likely to meet Finance Minister and Prime Minister soon and will discuss regarding hardship people are facing.

 

 The Enforcement Directorate (ED) is keeping a watch over the bank transactions of 50 branches to detect money laundering and hawala dealing.  Along with bank auditors the ED has swooped 50 branches of 10 public and private banks across the country.  They are scrutinizing each and every transaction of all types of account wherever they are getting important intelligence input from different agencies.  Ledger books, cash books and other relevant material are under random scrutiny.  Accounts associated with petrol pump owners, students, hawala racketeers, jan Dhan and dormant account where disproportionate amount is deposited is under scanner of government agencies.

 President of India stated that ‘the Parliament is meant for legislative business and not for disruption’.  PM Modi while addressing BJP parliamentarian stated that ‘in a democracy, janshakti should be above rajshakti’.  He urged the members to create awareness for digitization and cashless economy among masses.  The ruling party is denouncing opposition for not allowing Parliament to function legislative business.  Contrarily, the opposition parties are squarely censuring ruling party for a spoiled broth.  Opposition parties are observing completion of a month of demonetization policy as ‘black day’.  Rahul Gandhi has sarcastically described ‘PayTM cashless facility’ as ‘pay to Prime Minister amenity’.  Congress party, Trinamool congress and few small parties are stalling the proceedings of both the houses and holding dharna in front of Gandhi statue in Parliament with black badges.  Many important bills are pending in both the houses for discussion and legislative approval.

Nandan Nilekani former Chairman of the Unique Identification Authority of India said ‘the fact is that we have had a shock given to the currency system and, in my view, this will boost digital economy’.  The companies associated with e-payment are doing grossly business.  They are receiving orders from semi-urban areas; inquiries are coming from sundry business outlets like cycle shops, cane juice seller, temples, tea and pan vender, daily needs center, etc.  By digitization the transaction will be accountable.  Large number of section of society will be in tax net thereby surge in direct and indirect tax collection. ‘Digital acceleration needs strong internet connectivity’ Chairman of the Telecom Regulatory Authority of India said.

           

Post Demonetization: future prospects

            Two mind blowing articles were published in Indian Express.  Bhaskar Chakravorti’s article ‘Demonetiser’s dilemma’ dated December 5 dealt with wide spread digitization activism and mobile banking vis a vis cash transaction.  When 86 per cent transaction is in cash how India defy looking forward in the direction of cent per cent e-banking at a galloping speed?  He opined that e-wallet companies will have a roaring business; but what about infrastructural facilities prevail at customer’s door.  The author analyzed the data of 70 cash based countries and inferred that cost of cash score is the highest in India.  It indicates as and when dealings betide using cash it requires some expenses.  He elaborate steps involved in cash transaction and cost demanded at each step, such as cost to consumers, cost to business, cost to banks and other institution, cost to government.  Since independence the country is enduring the cost due to gargantuan cash dealing.  The author further warned the authority not be so smart regarding abrupt transformation to cashless business model.  ‘Telling people to go cashless is putting the cart before the proverbial horse.  The horse in this case is the digital infrastructure’ he said.  The smart phone holder number is one third of the society with incredible internet access due to lack of infrastructure facility.  Ladies are looking after house hold activities; hardly 17 per cent of them are utilizing internet.  Better not to talk about rural and semi-urban community.  The author appropriately pointed out that the percentage of notes and coins to GDP is 12.04 per cent in India which is higher than many developing countries.  The cashless dealing is not a full-proof alternative.  So, the best approach is to go step-wise from cash to cashless.  It may take few years more.

            Another article written by Surjit Bhalla (Black cash in India) dated December 6 is regarding control over generation of black cash and GDP growth.  In the first instance the author pointed out that the abrupt decision of demonetization was well intended but inappropriate and costly.  He has differentiated black cash and black economy and stated that the black cash is six per cent of black economy.  The present policy is only concerned with six per cent of the total black economy.  He said ‘Black cash has low shelf life and smart people do not keep black income in cash’.  He opined that the service sector will only get affected, the effect on GDP will be one per cent, and large number of people will be in permanent tax net.  After lot of computation he concluded that ‘demonetization policy will likely to be a huge success in view of further reforms’.

            Revenue Secretary of India, Hasmukh Adhia added fuel in conflagration.  The government is anticipating cent per cent return of old currency notes of Rs 500 and Rs 1,000 to banking system, he said.  The assessment is against the presage of one and all.  Experts were anticipating part of the total cash will not bounce back to banking system.  Now, the liability of RBI has increased.  Centre for Monitoring the Indian Economy has calculated 1.28 lakh crore cost (November 8 to December 30) due to implementation of the policy.  The fulgent side is, the IT department will scrutinize each and every account.  If taxes and penalties exceeds more than the cost incurred on the policy, then only the whole drama will be a face saving exercise.  Tracing entire transaction is not a joke.  Cahoots between bankers, black money hoarders and their agents need to be ascertained.  RBI Governor, Mr Urjit Patel announced that Rs 12 lakh crore (till December 7) of old currency notes has already been deposited with banks and post offices, and GDP is likely to decline by 0.5 per cent.  Ambassador of Russian Embassy, Delhi has written a letter to Minister of external Affairs regarding cash crunch.  They have no cash to pay salary and operational expenditure to their subordinate staff.  Other embassies are also facing same difficulties.

            The Income Tax department has so far seized Rs 130 crore cash and has investigated 400 cases detecting more than Rs 2,000 crore undisclosed income.  About 30 cases have been referred to CBI and ED by the department for further investigation and legal action.    

            Initially, it was expected that at least Rs 2.5 lakh crore of cash will not be deposited in banks.  Scenario has changed.  If the prediction of Revenue Secretary comes true then it is going to affect prospects of Modi government.  It will tarnish the image of party in general and Mr Modi in particular.  Censure to Modi government may hamper the future prospects of the party.  The opposition will exploit the prevailing situation and corner the Modi government in the Parliament and on the streets.  How the government defends needs to be seen.