If Narendra Modi Is Serious About His ‘Surgical Strike’ On Black Money Then…
IF is the word to remember all the while.
At
8:15 PM on November 8, Prime Minister of India, Narendra Modi in an
unscheduled live televised address to the nation announced the
circulation of all ₹500 and ₹1000 bank notes of the Mahatma Gandhi Series as invalid and announced the issuance of new ₹500 and ₹2000 banknotes of the Mahatma Gandhi New Series
in exchange for the old banknotes. This step was lauded by all (at
first) for its boldness and, showing resolve to fight the menace of
counterfeit notes running in market and taking fight against Black Money
which was Modi’s big electoral promise to new heights. This was initial
response (read mostly from social media). But next day when sun rose
and people started to function in real world, things got real. The
questions on execution of this ‘bold’ step which had large scale
ramifications started to make way into normal conversations. But on all
that after-effects later. Let’s first dive into that one reason which
government has been mentioning in all its addresses about this step.
Will this really weed out the Black Money?
But before that what is ‘Black Money’ and who has it? In India, black money
refers to funds earned on the black market, on which income and other
taxes have not been paid. The second question is important. The
immediate fallout of this decision was people queuing in serpentine
lines to exchange their now obsolete cash or to withdraw the small
limit. Why?
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pointed out that, about 85% of all currency in circulation has just
been turned into coupons that can only be exchanged in specific places.
These notes can be converted into currency again only with identity
proofs (which hundreds of millions don’t have) and the additional
hardship of standing in many queues for many hours. It further stated,
over half of India’s population doesn’t have any sort of bank account at
the moment and about 300 million don’t have basic ID such as Aadhaar
either and hence, cannot access the banking system at all. About 130
million Indians have mobile wallets (about 25 million have credit cards)
and there are maybe 550 million-600 million debit cards in circulation.
So access to cash is very, very important for average Indians.
This
average Indian is not the one against whom this supposed ‘surgical
strike’ against black money was carried out but it is he who is
suffering its biggest blow. Then who are these people who hold the black
money?
These
are those who have overseas accounts in safe tax haven countries like
UAE, Hong Hong, Singapore. And our political parties with unaccounted
donations. Bringing money from overseas swiss accounts and depositing
the same in each Indian’s accounts was Modi’s big election promise which
best to say is long forgotten. On that front, government so far seems
not so much interested in given their not-so-aggressive (which otherwise
is their default) approach on Panama Papers.
Also there is this HSBC whistleblower who has written to SIT judges
regarding HSBC probe but India is yet to respond to him. Our government
has initiated inquiry into Panama papers leak like into any storm that
arises but so far we know nothing from that inquiry. That’s gist of
offshore amount. Back home, there’s one clear winner where black money
is rampant — the ‘donation boxes’ of our political parties.
Firstpost in its report stated,
By conservative estimates, the bigger political parties such as the Congress and the BJP spend anywhere between Rs 10,000 crore and Rs 15,000 crore in five years. That makes the figures provided by the parties to the Income Tax department — Rs 1,662 crore and Rs 852 crore respectively for the period between 2007–08 and 2011–12 — look ridiculous. It doesn’t look convincing that the BSP and the SP, major parties in a state with 403 assembly and 80 parliamentary constituencies, would manage with an earning of a meagre Rs 424 crore and Rs 202 crore respectively. Obviously, the parties are not telling the whole truth to the tax authorities.
The
biggest myth about black money is that it’s stashed under mattresses
which is fueled by Indian movies. But the truth is, that cash is flowing
like bad blood and increasingly corroding our system from within.
According to reports, 90% of funds that our political parties receive
are from unidentified donors. Yes, we have no idea where they stay or
who they are. This huge gap between what parties reveal and what they
spend is where the roots of corruption lie. Just look at the structure
of our political parties — people with deep pockets are always occupying
high offices. No doubt the rich guys from mining sector or
industrialists get so much prominence. It is give and take at best.
Nexus between political class and corporate bosses is all well known.
Black money is the oil that helps run the wheels of party machine. Black
money is pumped into election campaigns by this donors for favors in
future. That could be one important reason why they are reluctant to act
on this ‘mothership’ of black money.
The
rulebook says, contributions up to Rs. 20,000 need not be disclosed.
And they milk this provision for their maximum advantage. The Bahujan
Samaj Party (BSP) for instance has declared a total income of Rs 585.07
crore (Rs 5.85 billion) between FY05 and FY13, of which Rs 307.31 crore
(Rs 3.07 billion) was from voluntary contributions. However, the names
and other particulars of these 'voluntary' contributors are not known,
as the party has maintained that no donations above Rs 20,000 was
received, thereby not declaring the names of even a single donor in
eight years.
According
to the report, India’s major political parties fund themselves with
unaccounted money, their audited accounts revealing only a fraction of
their actual expenditure. It says that an analysis of Income Tax Returns
of national political parties between FY05 and FY13 shows that the
total income of the parties from unknown sources of income amounted to
Rs 4,368.75 crore or Rs 43.68 billion (72.98 per cent of the total
income of national parties).
Election
Commission (EC) in recent times has shown some tooth to act. But
political parties have found way here as well. EC in many cases has
seized hefty cash during election campaigns which has cost dear to this
parties. So now they give away free mobile phone recharges, alcohol, and
all kinds of other gifts. Parties are finding clever ways to circumvent
the rules and they will continue to do so.
BJP
government is midway of their tenure at center. Punjab and Uttar
Pradesh elections are staring at them. And this demonetization is their
way of saying, look we have fulfilled our promise to act against black
money. Apart from this, where is anything to show in this regard? But in
any case, have they really acted in true ways to tackle the menace?
Association for Democratic Reforms, ADR stated,
A major chunk of funding for political parties comes from donors whose identity is not revealed, says a study report prepared by Association for Democratic Reforms . 75% of the donors to the six national political parties from 2004–05 to 2011–12 are unknown. The report says that in eight years, these political parties declared income that stands at Rs 4895,96 crore collectively. Going through the IT returns, it was found that donors whose identity was revealed accounted for Rs 435.85 crore which is 8% and from asset sales, membership fee, interest on bank deposits, party publications sale income accounted for Rs 785 crore which is 16% of the income. The rest of the money comes from donors whose identity is not revealed. These mysterious donors have contributed Rs 3674,50 crore.
It further adds,
The Central Information Commission which governs the RTI (Right to Information) has passed an order that these six political parties’ accounts should be open to public scrutiny under the RTI law. This move was checkmated with a united house bringing in the Right to Information (Amendment) Bill, 2013 which gives immunity to political parties from providing information.
Congress
during its tenure didn’t showed any interest to bring political parties
under RTI so that general public can freely ask and get answers from
them about the sources of their funds. Not so surprisingly, most parties
who opposed and stalled houses then not opposed congress in their move.
India is probably among the very few countries, where political funding is not transparent. In most other countries — Bhutan, Nepal, Germany, France, Italy, Brazil, Bulgaria, the US and Japan — the complete details of the donors to political parties are publicly available.
The
irony in India is the champion of RTI law and one who made example of
showing accounts for each rupee received and spent on their party’s
website, Arvind Kejriwal too in recent times have chosen to remain quite
on this matter. Have you seen him ask why BJP is not revealing their
sources of funds or saw him ask Modi to bring political parties under
RTI? You won’t. The reason is, his own party since months have stopped
showing those details. Mayank Gandhi, former Aam Aadmi Party member, had
to say this earlier.
Transparency of political donation was Aap's promise. No donation list since June. No expense statement since 2014. Attacking black money?— Mayank Gandhi (@mayankgandhi04) November 12, 2016
So like Arvind Kejriwal used to say during India Against Corruption (IAC) days — Sab Mile Huye Hain (They are all united in their crime).
Finance
Minister Arun Jaitley said that if election expenses get reduced
because of their demonetization move then its good sign. Well, if they
are really serious about weeding out black money from the system, if
only Narendra Modi is serious about his poll promise then this is where
he should do his ‘surgical strike’. If not, all this is but a big game
played out to sway minds into fooling people to vote them to power in
coming elections. Or as journalist Swati Chaturvedi asked
if this was just another way to grab headlines. If the Modi government
is indeed serious in tackling the black money menace, it should show the
willingness to overhaul the process of political funding and make it
transparent. Until then, the government’s fight against black money
wouldn’t be a convincing one.
Before
I dive into this sea of questions, let me state it very clear. This
writer is happy over this move of demonetizing old currency to clean the
counterfeit currency. Also support this if (there’s big if) this will
weed out black money. The black money Narendra Modi spoke about during
elections was all stashed abroad and how incompetent Congress party was
not to bring it back. It’s two-and-half years of Modi government now.
There are long lines before banks and ATM booths, there are reports of deaths due to shock and standing in long lines, and there is whole barrage of rumors from nano chip in Rs. 2000 notes to how prices of salt has increased.
Most of them started with Whatsapp forwards which has become notorious
for such rumors in recent past. But in all this, one thing has just
baffled me even more. No, it’s not people’s intelligence. But their
desire to attack those who are questioning. Yes, the move was bold and
maybe needed but is it flawless? Or its execution good? No. It isn’t.
What do you want people to do? To turn themselves into cheerleaders of
government and just stop questioning?
People
are no doubt annoyed about standing in long lines. Who won’t get
annoyed of that? And what is your answer to them? “You stand in lines
for Jio
SIM, for movies, for auditions, for phone, why not for the good of your
country?” and “look at our soldiers who stand at borders for our
nation, why can’t you a little while?” I mean, seriously! Where do you
keep your brains when you ask something as that. Let me tell you why
people (again some of them, not all who are standing before ATM or bank
stood for Jio) stood for Jio. For Jio, it was free internet, for movies,
it’s the prospect of first day shows, for auditions, its freaking
audition and you want to participate and grab that coveted prize. What
do you get standing in line before ATM or branch? Your own currency in
new notes! And just to remind you, if the notes were not changed this
need to stand hours in line wouldn’t have arrived. So it is out of compulsion and not choice
as is the case in other scenarios. Coming to army jawans point, come
on, find some other nipples to milk. Leave army on their own. Enough.
One, they don’t stand all the time and they get paid for their service
to nation(people standing before ATM don’t get a single buck extra which
is not their own!). I respect the army but please, don’t bring them
into your stupid politics to defend your masters.
Other
point I have seen is, don’t be negative all the time. All I remember is
almost everyone welcoming the decision on that night when it was
announced. Only on next day when people started to go about their lives
and felt the uneasiness they went complaining. Even opposition parties
were silent until West Bengal Chief Minister and TMC leader, Mamata
Banerjee started speaking out against the move. Her primary focus being
the working class, daily laborers and poor households who mostly rely on
cash. That’s when opposition saw it and started firing at the
government. Mamata in her series of twee
ts on November 8th said,
While I’m strongly against black money, corruption, deeply concerned about common people, small traders. How they will buy essentials tomo? This is a financial chaos and disaster let loose on the common people of India... The PM could not get back the promised black money from abroad from the rich so a drama to divert his failure… I want to know from PM how my poorest brothers sisters,who’ve recd their week’s hard earned wage in one 500 re note will buy ata,chal, tomo? Heartless and ill- conceived blow on the common people and the middle class in the fake name of anti-corruption. Rs100 notes not available in banks. Without availability in market how will people,small farmrs,all employees, labourers purchase essentials…
WITHDRAW THIS DRACONIAN DECISION— Mamata Banerjee (@MamataOfficial) November 8, 2016
There were also reports of wrong printing on Rs. 2000 notes. But it turned out to be another hoax as well. So all in all, this move has certainly annoyed the general crowd at large but did it really bother those having black money? Will we see any arrest of black money-holders? As Ravish Kumar said, Vo jab hoga dekha jaayega (we will see when that happens).
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