Tuesday, November 15, 2016

How Modi’s demonetization move is a drama!

By Vinod Varshney
The Modi government is causing so much hardship to common people, farmers and retail businessmen across the country as prime minister Modi unwittingly demonetized the currency which is now of low denomination in value terms and is used by common people in day-to-day transactions. People go to buy even fruits and vegetable carrying a 500 rupee note and street-venders do accept them routinely.

One needs to look at the cost inflation index which is 1125 today on the basis of its value ‘100’ in 1980-81. Its value was probably 80 in 1978. Thus, the value of Rs 500 and Rs 1,000 today is only Rs 36 and Rs 72 in terms of the value of Indian rupee in 1978 when Desai government had undertaken demonetization exercise so successfully. 

When prime minister Morarji Desai had demonetized 500, 1,000 and 10,000 rupee notes in 1978, he was truly eliminating high value notes and thus conducting a true surgical strike against black money hoarders. I had been a sub-editor then with Hindustan, a national Hindi newspaper published from New Delhi. I like other common people had seen the Rs 1,000 note probably only once or twice. But never got to see a 10,000 rupee note!

Because of the demonetization of the high value notes, the Desai government had hurt only the black money hoarders, not the common man. That was the reason, there were no deaths like this time of old people standing in queues for long hours to get their notes converted and no deaths of children for not being able to get treatments owing to old 500 and 1,000 rupee notes not being acceptable to private medical service providers.

Prime minister Modi has rightly been accused for his arrogance as he fails to realize that his move is hurting common people across the board, in some cases even more than the black money hoarders who are using touts to get their notes changed with the new ones for a price.

Had Modi government really been sincere to hit the black money hoarders in India, it would have demonetized the Kisan Vikas Patra which were discontinued by the Manmohan Singh government as an action against black money hoarding but were relaunched audaciously by the Modi government to facilitate black money owners.

The current demonetization exercise looks more like a sadistic drama, and to say mildly, a face saver amidst countrywide criticism of prime minister Narendra Modi who failed to bring back the black money stashed abroad that was promised to be done within 100 days of forming his government during election rallies in 2014.  

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