Wake up Call – There is no light at the end of demonetisation tunnel
Razia of Aligarh died on
December 4. On the night of November 20 when she was rushed to the
district hospital in a critical condition she told media persons that
she took the extreme step after failing to exchange her old 500 rupee
notes for days together “out of total helplessness as her four children
had not eaten any thing for three days”.
The toll brought about by demonetization has now crossed
100. This includes old people unable to bear the strain of standing in
queues, people denied treatment at hospitals, students unable to pay
their fees – situations created due to demonetization and lack of
available currency.
The sudden withdrawal of 86.4 per cent of the currency
value in circulation without any preparedness and efforts to replace it
with notes of lower denominations for daily transactions has resulted in
unprecedented and continuing collapse of people’s earnings, purchasing
power and economic chaos.
With the beginning of a new month, even the salaried middle class has been pushed into a critical position with no cash in hand.
The Hidden Agenda
Black money is generated by the present economic system.
When he became Prime Minister, Modi had promised that he would bring
back the black money piled in foreign accounts and deposit Rs 15 lakhs
in the account of every Indian within a hundred days. Expectedly there
is no effort on this front but he went on protecting corporate black
money holders and even encouraging them to accumulate wealth by
channelling their illegal money as FDI flows into India through the
Mauritius route. It is officially recognized that most of the black
money generated by the ruling regime is in Swiss banks and other tax
havens and is double the size of our national income. Lion’s share of
the remaining 20% is held in the form of real estate, land, gold,
company shares, etc. by corporate billionaires like Ambani and Adani.
While demonetization claims at cleansing the system of black money and
corruption, Ministry of Finance has made it clear just about 6 per cent
of the country’s unaccounted wealth is in currency notes.
In a stated bid to capture this tip of the iceberg Modi has made common people pay with their life and livelihood.
Contrary to Sanghi propaganda, it is not as if all this
tumult is a sacrifice for a bigger cause. The aim of this move is to
promote corporate capital. By this masterstroke, except the corporate
elite and plastic money holders, all Indians including middle classes,
small businessmen, the working class and lower and marginal sections of
the peasantry, who need currency notes for their survival are badly hit.
Small vendors, shopkeepers and hawkers are all losing business to those
with card machines. Small shopkeepers have already downed their
shutters and will be joined by intermediate and small capitalists, and
that process will only accelerate the appropriations by the corporate
class leading to a greater concentration of wealth..
Corporate houses will also gain from lowering of
interest rates. In March 2015, India’s 10 most indebted corporate groups
were holding Rs 7.3 lakh crores in bank debt. A drop in interest rates
by a single percentage point would benefit these companies with Rs 7,300
crores this year alone. While crores of people cannot access their own
money, banks and corporates will be utilising it in their own interests.
Banks which had lakhs of crores of none performing
assets are now flush with ordinary people’s money. They are restricting
withdrawals of ordinary people’s hard earned money and issuing mega
loans to the large corporations. Little wonder that corporate criminals
are flush with praise of Modi.
Instead of supplying the badly needed small denomination
notes, the advance printing of Rs 2000 notes has been to appease
corporate billionaires. Modi has also dared to freeze the hard-earned
money of the peasants and common people in the cooperative banks,
agricultural credit societies, housing societies and so on declaring
them as having a high possibility for parking black money. In the
process he stopped the flow of cash to agriculture at the start of
sowing season. Half hearted attempts to allow seed purchase using old
notes were also thought of two weeks down the line. In the first twety
days the Banks serviced urban need for cash and supplied a bare Rs 350
per head to rural India.
By the end of November more than 11 out of the 14 lakh
crores in old notes have come back into the system with another month to
go for depositing old notes and it is clear that those with unaccounted
stashes of cash have found ways to force them on their employees and
farmers. Robust business continues in old currency notes that are likely
to reach the banks before the month ends. Demonetisation has in fact
fuelled black income generation. Discovery of new 2000 Rupee notes in
almost every raid is a pointer to this. From the threat of charging 200%
penalty on tax the Government came down to charging tax at the rate of
50% from defaulters.
That the ruling regime is in an unholy alliance with
corporate billionaires and that this draconian move had their sanction
is clear given the non-official members of the board of the RBI. They
include Sudhir Mankad, who was the ex-chief secretary of Gujarat during
2005-2007 during Modi’s tenure, Natarajan Chandrasekaran, the MD &
CEO of Tata Consultancy Services, Bharat Narotam Doshi the chairman of
Mahindra & Mahindra and Nachiket Mor, Country Director for Bill and
Melinda Gates Foundation. Thus the corporate giants were privy to the
entire plan for at least one month before the Board of Governers of RBI
met and recommended it though it was sprung as a surprise to people at
large.
It has also been revealed that the BJP knew all about
this move – and the state units of the party were frenziedly buying up
land since some time before November 8. In West Bengal alone, the state
party unit deposited Rs 3 crore in 500 and 1000 rupee denominations in
the morning of November 8, hours before the PM’s announcement.
The Effect
In a country where 95 % of all transactions are done in
cash, the catastrophic outcome of this cash squeeze has been a total
devastation of all productive activities including agriculture, small
scale industry, construction, retail trade, traditional rural employment
and so on. Since 90% of the workforce in India or 440 million workers
are engaged in the informal sector – and 96 % of female employment is in
this sector – where most transactions are cash based, this move has
been disastrous leading to numerous and arbitrary dismissal of workers,
job cuts, denial of wages, payment of wages in invalid 500-1000 rupee
notes, etc. Bereft of employment daily labourers and informal workers,
have also lost their meagre savings. These workers are on the brink of
starvation as they buy their rations on a daily or weekly basis.
While banks exchanged old notes for new till November
24, making the trip to a bank involved seeking permission from the
employer, and often the loss of day’s wages. In villages, daily-wage
workers are out of work or are not being paid on time as sowing is
adversely affected. The women are often the last priority for employers,
so they are suffering more. This may have a long-term impact on women.
After November 24, with the declaration that old notes could only be
exchanged at RBI counters, the situation has become even more precarious
for working people, especially those living in remote areas where the
news of demonetization and its implications had reached much later.
There are countless reports of women and men living in conflict zones
like Bastar being harassed by authorities who claim that they are trying
to exchange not their own hard-earned money but money given to them by
‘insurgents’ and Maoists.
With the demonetization of Rs 500 and Rs 1000 notes,
temporary jobs, especially in labour intensive sectors like garments,
textile, leather and jewellery, have taken a hit. About 4 lakh people,
comprising mostly daily wage workers, have either lost their job or
snubbed work temporarily due to lack of payment, and the number is
expected to keep going up. A fifth of the almost 32 million people
employed in the textile and garment sector (who are paid wages either
daily or weekly) have been hit. While some of them have already lost
their jobs, many are apprehensive of such a fate. A majority of garment
industry workers, especially in hubs like Tirupur, do not have a savings
bank account as 70 per cent of them are migrant workers from the north
and north eastern parts of the country. Similarly, 20-25 per cent of the
roughly 2.5 lakh workers in the leather industry have been adversely
affected as they are daily wage workers. The industry has been hit
particularly hard as 90 per cent of the units are small and medium
enterprises. In the jewellery sector, 15-20 per cent of workers, who are
paid daily, too, have been affected. Tens of thousands of workers in
the tea and jute industries, who are paid wages in cash are also hit
hard by the currency crunch. The fate of 44 million construction workers
who earn an honest wage from real estate sector that operates with cash
cannot even be imagined. The spiralling effect of all this is not hard
to understand.
Especially Women
The women are often the last priority for employers, the
last to be hired and the first to be fired, so they are suffering more.
This may have a long-term impact on women.
An estimated 80 per cent of women in India are outside
the banking system. Across the country, crores of women have long been
in the habit of saving little sums of money at home in cash. Women often
put aside money without the knowledge of their husbands, building a
nest egg for themselves and their children, and a safety net against
emergencies. For those who are victims of abuse, it is a much needed
safety net. This is no ‘black money’, but money earned through a great
deal of hard work and sacrifice. This entire savings of women, a
substantial part of which naturally was in 500 and 1000 rupee notes,
suddenly became ‘invalid tender’ by the arrogant announcement of the
prime minister. It not just left them with a cash crunch and a whole lot
of useless notes, but may also have laid bare their secret saving
strategies. Thus, the security of women and children and also a source
of some self-confidence and self esteem in an oppressively patriarchal
society, has been put in peril.
A step, purportedly aimed at combating the menace of
black money, gave rise to a new breed of racketeers who leaped at the
opportunity to ‘buy’ 500 and 1000 rupee notes off helpless women, people
living in far flung villages outside easy reach of banks, tribal
populations in remote rural areas, and others, at a steep discount!
As he demonetised the higher value currency Modi played
on poor people’s emotions saying that now the rich would spend sleepless
nights.
Very soon his tune changed and Modi exhorted Indians to
bear the hardship for fifty days. This hardship applied only to common
citizens because during this period mining baron Janardhan Reddy
celebrated his daughter’s wedding, with a vulgar display of indisputably
ill-gotten wealth – it was a Rs 500 crore do – and BJP bigwigs joined
in the merrymaking. As the transport business reduces to a trickle, the
transport Minister Gadkari transported thousands of guests for his
daughter’s wedding by chartered flights. Congress leaders like Adur
Prakash are joining the BJP in equal measure in such wedding revelries.
Though the Government claims that Janardan Reddy had no
black money, the suicide note of the driver of the KAS officer who was
forced to help in converting Rs 100 crore states otherwise.
Modi Government has lost no opportunity to brand people
as criminals working for black money hoarders. Threats were issued to
investigate Jan Dhan accounts if they showed a deposit of more than
50,000 rupees. Indelible ink was used to mark people who had exchanged a
paltry sum of Rs 2000 that would not last most families for even a week
by portraying that they were queuing up for their masters.
Only 20 per cent of the population is acquainted with
“plastic money” or credit and debit cards, mobile and internet banking
or other electronic money transfer facilities. The number of ATMs in the
country is far from sufficient and they are distributed in a lop-sided
manner biased heavily towards 13 states and metropolitan cities where
more than half lie. While Russia has 184 ATMs per lakh population, India
has only 18. How are villagers with persisting illiteracy, ignorance of
internet, erratic power supply going to use plastic money? It should
not be forgotten that the benefits of plastic money will be derived more
by finance companies regardless of who pays their charges. When India
is far behind the required infrastructure for a cashless economy,
withdrawing bulk of the cash in use is nothing short of deliberate
penalization of the masses, especially women. In fact the stress on
cashless economy is no more than a ploy to cover up the ill managed
demonetization.
A dismal future
The promise of a bright future for the have-nots of
today has no more meaning than the electoral promises of Modi. The
reality will be a spiralling depression because the government simply
does not have the capacity to remonetize the system for months to come.
Modi’s appeal to spare him for 50 days is just a means of postponing
people’s anger. The sleepless nights of black money hoarders are not
evident and they continue as before because raids by tax authorities do
not just uncover old notes but bundles of new 2000 rupee notes. Lay
offs, sleepless nights and endless wait for cash to buy food, medicines
and other essentials are the changed reality of the masses.
It is not as if the workforce rendered useless will
settle back to a normal life when adequate notes are printed. They will
be pauperized and indebted in the coming months.
Those with the agenda to help the corporates have shown
little understanding of the interlinkages in the economy. Their plans
will also remain pipe dreams. Lack of demand is already manifest in the
automobile industry that has curtailed production to half the working
days and reduced the number of shifts.
Modi and his coterie are mouthing that there is Indians
are supporting his move. The reality is otherwise. He is coercing the
dissent by calling dissenters as being pro-black economy. Compliance is
being forced – on 9th Decemeber the Institute of Chartered
Accountants has issued a notification which says ” members are advised
not to share /write any negative personal views by way of an article or
interview on any platform regarding demonetisation ” In the past also
government officials have warned dissenting voices in this matter.
WSS unequivocally
condemns the Modi government’s demonetization drive as a brutal and
massive corporate assault on the people which has affected the most
vulnerable section of society. We appeal to women and the working people
in general to resist this corporate onslaught and expose the true
intentions of this far-right, anti-people, anti-women regime. We demand:
1) A white paper by the government on assessment of
activities that have come to a standstill and the number of people
adversely affected and on its actual plan vis-à-vis bringing the economy
on track.
2) Urgent measures to tide over the cash crunch and
special measures to alleviate the sufferings of the workers and farmers
brought about by demonetisation by way of expeditious implementation of
Food Security Act, enhanced allocation for MNREGA and employment
guarantee for urban workers.
3) Retrieval of actual bank money from abroad and penalization of offenders.
4) No waiver on tax to make black money white
5) Fulfillment of electoral promise to deposit Rs 15 lakh in every account
6) Stop the call for ‘cashless economy’ and expeditiously print notes of smaller denominations.
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