ALL SAID AND DONE IT HAS COME TO NAUGHT
In the beginning after the note ban the Reserve Bank of India was frequently notifying the public about the amount of banned '500 and '1000 notes that were being deposited in the banks. But suddenly after mid-December RBI kept mum about this. It was quite natural because the rate at which the amount of banned notes were being deposited, it put the government in a dilemma whether the whole lot of '500 and '1000 currency notes will be back. Questions continued to pour in from different quarters and like a music disc stuck up RBI went on repeating that 'counting isn't complete yet'. Finally RBI declared that 99% of the banned notes have been deposited. Out of a total amount of '15 lakh 44 thousand crores of banned notes in circulation about '15 lakh 28 thousand crores have been returned. That is something more than '16 thousand crores have not been returned. Just about 1% of the whole.
When surprising the whole country the Prime Minister Narendra Modi declared the note ban in a sudden, dramatic fashion he explained that with this 'surgical strike all of the black money will be caught. His logic was quite simple----those who possess black money they will not deposit the money because on depositing they will be caught red-handed. Consequently those amounts will not return to the Reserve bank and that will be a gain. Some even suggested that this is the opportunity for Modi to deposit, even though not '15 lakhs, but some amount in bank accounts of the public, to the Jan Dhan accounts from the profit of RBI.
What the government expected and ultimately what came to light? At one time the counsel for the Central Government through an affidavit informed the Supreme Court that according to the government the total amount of black money is '16 lakh crores and of the '15.44 lakh crores of notes banned 11-12 lakh crores will be deposited '4-5 lakh crores won't come back into the bank. That will be the black money. But in reality only '16 thousand crores has not come back. Rest of the total amount in circulation has come back. And that also because of the fact that the Central government suddenly preponed the last date of acceptance of banned notes. Prior to that the government declared the last date to be 31st March. Later when the surge of returned notes went beyond expectations the government put up different excuses to restrict the return. Even the Supreme Court requested the government to allow those who could not meet the deadline due to various but genuine reasons. But the government refused. Otherwise the undeposited amount would have been still lesser than 16 thousand crores.
Thus even by governments accounts recovering the full amount of black money remained a distant dream. Modi's 'surgical strike' could only isolate 1% of it. How much has been the cost of this? Between July 2016 to June 2017 during the period of note ban RBI spent '7965 crores on printing new currency notes. Then there has been expenses for sending this currencies to the banks. Then expenses for making changes in ATMs in accordance with the sizes of new '500 and '2000 notes, for overtime work of bank staff and others. Ultimately how much has been the expenditure that we do not know. But CMIE (Centre for Monitoring Indian Economy) estimated it at the start of note ban to be '35100 crores. Taking these two expenses together the expenses is much more than the amount identified as black money. Spending so much money how much could be trapped? Merely '16 thousand crores. All said and done it has come to naught.
But this is only the expenditure of the Reserve Bank and the banks. If the losses entailed in production in various industries due to this is counted then it will be far more. CMIE assessed the total expenditure to be of '1 lakh 28 thousand crores. But can we calculate for the huge losses incurred by the masses in rupees? Nearly hundred people died, some in the big queues of banks and some taking their own lives because of extreme financial crunch. But they were not owners of black money. They were all common middle class folk. Small business organisations, factories, petty businessman had to close down as their businesses depended on cash transactions. Workers and employees lost their jobs. Many such companies could not revive after note ban. This informal sector experienced another setback due to GST. After two such jolts of note ban and GST during the period of April to June the growth rate of GDP has come down by 2% to 5.7% from the earlier period before note ban. What resulted at the expense of harassment and big suffering of the masses is naught.
In fact for anyone following the episode closely, within a few days of the note ban the actual result of high sounding promises to catch black money became quite clear. That is why the government also started talking of certain new targets. It was said that as a consequence of note ban India will advance towards a cashless economy. A couple of days later it was changed to less-cash economy. Now it is also clear even that could not be achieved. From different news it is being revealed that during the period of note ban due to non-availability of hard cash cashless transactions increased. But later as the supply of cash increased the number of cash transactions have come back to square one.
Now the government is once again talking of still newer targets. The Finance Minister has said, ?Who said that if money is deposited in banks it becomes white money?? Now they are claiming these accounts will be investigated upon and the owners of such money will be penalized. From the experience of note ban episode it can well be guessed what will happen in reality. Even if the government penalizes those account holders the amount they will get will be meagre compared to the total black money.
From this experience certain well established facts have once again been proved. Those are:
1. From the very beginning we knew that Modi's note ban exercise would not solve the black money problem. The declaration by Reserve Bank confirmed that. Real owners of black money are rich and powerful people of society. They are either bureacrats, ministers or their close acquaintances. Hence any exercise to eradicate corruption of the rich and powerful by the government administration is bound to fail. These people with the help of those in power find out different channels to get out of any trouble, as they have done during the note ban episode. Using innovative methods they by-passed government instructions and either deposited their money or got it exchanged with new currency notes. Whereas probably those who earned money legally were not able to deposit some of their money within the deadline otherwise the Supreme Court would not have requested the government to allow them to deposit their money. The Finance Minister is now saying that they will be recovering black money from the amount deposited in banks. For argument's sake even if we agree that the government will sincerely try that, still then the owners of black money will largely foil that. They possess that power. The state structure is so much intertwined with the interests of the rich and the structure itself is so corrupt that no effective step against the corruption of the rich can be taken by the state.
2. We know very well that the total black money was never in hard cash, nor can it be. Rich people do not keep their black money under their cushions. They mostly invest the money in benami properties or stash them away in foreign banks. Naturally it was never possible to eradicate black money through note ban. That Modi also knew very well. Knowingly they deceived the people and are still continuing with that.
3. Black money is tax-evaded money. Is this the only form of corruption? In this capitalist system there are thousands of ways in which corruption takes place whose main perpetrators are capitalists, government bureaucrats and political leaders. The capitalists are selling their commodities at prices multiplied by them, looting the natural resources in collusion with the governments, destroying the earth by polluting the ecology to fulfil their insatiable thirst for profits. The most important thing is every rupee of their profit comes by usurping the labour of the workers. Capitalist system means corruption. In capitalist system, in any class-divided society corruption is inevitable. In such a society corruption cannot be eradicated.
Even then Modi has arrogantly declared that if needed he will do it again. Is Modi acting obstinately? Having done it once does he want to stick to his position adamantly?
Not at all. Because what Modi wanted to gain he gained. He wanted to prove to the people of this country that what other leaders could not dare to do against corruption only he could do through such a step. The backward sections of the masses had to stand in long queues and suffer tremendously for it but still they greeted the note ban with full support for Modi. Later when they came to learn how the rich people managed to get their money exchanged easily then their enthusiasm might have declined but still they never doubted Modi's intention. Till now the masses, especially the backward sections, feel Modi took a firm step against corruption by banning notes, his intention was good, but the owners of black money didn't let it succeed. Consequently in spite of some doubts the image of Modi has remained untainted and clean for them. The tragedy is the messiah like image of Modi has been projected before them in exchange for great sufferings, job-losses even lives of the poor and the middle-class people. Utilizing this the fascist campaign of the extreme hindutva forces have been strengthened. That the note ban has played a significant role behind the win of the BJP in the U.P. elections is the opinion of many observers.
We believe that the working-class and the toiling masses through real life experiences will understand Modi's deception and will stand up not only against him but against the hindutva fascist campaign. It is the duty of the communists to enlighten the advanced sections of the working class and the toiling masses so that they can turn around and get organized. The fascist forces are advancing. If the toiling masses are unable to build up resistance against it then the development of class struggle will fall in great danger.
8th September 2017
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