Demonetization – surgical strike on black money or on a bigger target under the hood?

The act of demonetization and the so called surgical strike on black money launched by the Indian government has taken the country by surprise and storm in equal measure. No doubt the black money hoarders have been affected and the joke going around is that the hardest hit are the Indian wives who have the habit of hiding money from their husbands. They are now forced to bring out all those 500 and 1000 Rupee notes they had stashed away much to the chagrin of their husbands who now have to endure long queues before banks to get the currency notes replaced.

But key questions about the timing, implementation and most importantly, the objective remains to be answered. The government hasn’t been able to fulfill any of it’s poll promises for turning around the country’s economy. Inflation is still high, unemployment is growing and the GDP that government claims is not reflected on the ground reality. The Make in India initiative which was launched with much fanfare hasn’t really taken off. Foreign investors are largely staying away because of bureaucratic red tape. Discontent among people towards the government has been growing and the PM has been increasingly getting ridiculed for not being able to do anything to bring back black money from foreign bank accounts, something which he had vociferously promised during election rallies. Add to it, the ruling party has got trounced in some key state elections and even their grip on states they have been ruling for several years is under threat. Elections for the state of UP is coming up and UP is a key state for swinging votes in the general elections. Something substantial had to be there to talk about in election rallies and they have managed to connect recovery of black money with patriotism. This looks more like a surgical strike on people’s psyche with an eye to swing votes in future elections.

It is a known fact that 99% of the wealth in the world is owned by 1% of the world’s population. The top business and corporate houses are the biggest hoarders of black money. Most of the people who belong to above the well to do category invariably has one or more foreign bank accounts, mostly either in Switzerland, Cayman islands or any of those places and owning such a bank account has become a status symbol of sorts. Black money is getting rolled out of India into these bank accounts each and every day in connivance with some banks in India. Surgical strikes on these accounts as the PM had promised would fetch nothing. 99% of the black money would have got invested in foreign countries in every possible options and some of it may even be returning to the country in the guise of foreign investment. If the government is truly serious about their war on black money, they should have first shut down the banks that are aiding the flow of black money abroad and bottled up all the black money in the country but that has not happened and probably will never happen.

Any sort of action to curb the menace of black money is welcome but it should not be implemented at the inconvenience of the general population. Demonetization of 500 and 1000 Rupee notes has hit people squarely on their faces. People are running everywhere to get these notes out of their hands. For all these days, ATMs were spewing out these notes and when they are made worthless one fine day, the system is bound to go into meltdown especially in a country like India where situations can get chaotic at the drop of a hat. The long queues that start forming outside banks from early morning are excruciating, especially for the older people. Add to it, the new currency notes that have been issued does not fit the existing ATM machines. They have to be re-calibrated and that is going to take at least a few more weeks. A clear strategy has to be backed up by a precise implementation plan but neither seems to be present here.

The larger question is, is this just an offensive against black money or is there more to it? The planning might have started months in advance. It is a known fact that all budget and finance related decisions are taken with the benefits for the corporate world in mind and it is the corporate world that actually holds sway in the corridors of power. After all, it is the corporate world that funds election campaigns. So it is commonsense that any action on black money would have been told to them well in advance and they would have got enough time to cover up their tracks. So the eventual target is small to medium sized hoarders. But there is more happening that is on people’s faces but we probably haven’t seen it yet. There has been no restriction on online bank account operations and on the use of debit cards. Consumers are being herded away from small time traders into supermarkets, shopping malls and online shopping. Compound the situation by choking the flow of currency notes for about a month and it will be the death knell for small and medium sized retailers and road side hawkers. Why else was the currency notes changed without re-calibrating the ATM machines in advance? This might sound like a conspiracy but ground reality is pointing out to the fact that corporate houses are taking over the markets under the guise of weeding out black money. So how will people in rural areas deal with this? That is why bank accounts have been created for these people under some schemes. Those people must have all got debit cards. Is the country being moved to a “haves” and “have nots” based society? There is another aspect to it as well. Government can now monitor monetary movement in each and every bank account closely. Ordinary people who have got nothing to do with black money are going to get penalized heavily for even reasonably high transaction amounts.

People who are crying hoarse about patriotism aren’t obviously able to see through to the larger scheme of things. Blinding people out under the guise of patriotism is an easy way to slip in specific agenda with specific interests and objectives. Case in point is how 9/11 was so meticulously organised, how the disaster was engineered and how it was played again and again in the minds of people as a patriotic tune to garner public support and launch attacks on Afghanistan and Iraq. Who has benefited out of all the bloodshed? Obviously the corporate and specifically the weapons manufacturing industry. If the President of the US cannot bring in regulations on gun ownership in his own country, it clearly states how powerful the weapons manufacturing lobby is and implies that it is even more powerful that the elected representative of the people. This is nothing called democracy, capitalists have enslaved people under the guise of democracy. People forget easily that all people oriented programs are created after the interests of key stakeholders are addressed in advance and everything that gets played out in the public is only with the objective of garnering votes and people’s welfare and improved governance is never on the agenda. The world is being changed, for the good or bad is something only the road ahead will tell.