What has demonetization really done?

The “OFFICIAL” figures speak for themselves

pic courtesy – Hindustan times

  1. RETURN of 99% of the notes withdrawn implying that either there was very little “black money” in cash or whatever was there had been WHITENED!
  2. ALL so-called justifications of demonetization have FAILED FAKE currency is STILL around. A miniscule amount of fake notes was confiscated.
  3. “Terror funding” (as claimed by the government) certainly did not end.
  4. Indian economy has NOT become “cashless”!
  5. CRASH of the economy: India lost its fastest-growing major economy tag compared with China’s 6.9% in the same period.
  6.  GDP growth rate FELL from 7% (in Jan-Mar 2016) TO 6.1% (in Jan-Mar 2017) and further to 5.7% in Apr-Jun 2017.
  7.  Industrial STAGNATION: GVA (Gross Value Added) has consistently been falling, from 7.6% in the beginning of the year, to just 5.6% currently.
  8. Manufacturing GDP has FALLEN to merely 1.2%. Small and Medium Sectors have been severely hit.
  9. Massive FALL in the off-take of bank credit:
  10.  Non-food bank credit increased by 5.5 per cent in August 2017 compared to 8.2 per cent increase in August 2016.
  11. Credit to agriculture and allied activities increased by 6.5 per cent in August 2017, compared to 13.6 per cent increase in August 2016.
  12.  Credit to industry contracted by 0.3 per cent in August 2017 as compared with a contraction of 0.2 per cent in August 2016.
  13. Credit to the services sector increased by 5.0 per cent in August 2017, much lower than the increase of 12.1 per cent in August 2016.
  14. Personal loans increased by 15.7 per cent in August 2017, lower than the increase of 18.1 per cent in August 2016.
  15. MASSIVE fall in employment: CMIE has calculated 15 million job loss during the post-demonitisation first four months of 2017! Formal employment has declined from 928.7 lakh in Jan-April 2016 to 861.2 lakh in Jan-April 2017.
  16. Feku and Farcical Claims on the number of NEW taxpayers post-demonetization: MYTH of increased TAX RETURNS due to demonetization: The government has been on a PR overdrive this year, claiming all kinds of numbers at will:


Modi says 56 lakh (to match his supposed 56-inch chest);

the Economic Survey says 5.4 lakhs;

Arun Jaitley says 91 lakhs; and

Government in reply to a question in the Rajya Sabha on 1 August 2017, had stated that the number of new taxpayers post demonetization is 33 lakh!

Which one are we to believe Mr. Modi?

It is unprecedented for any govt to indulge in such fake claims!

Demonetisation Disaster

One full year has elapsed since Narendra Modi’s dramatic announcement of demonetization. Acknowledging the threat of disruption and inconvenience caused by the sudden withdrawal of 500 and 1000-rupee notes, Modi had assured the people that the pain would be temporary and that it was a necessary sacrifice to win the war on corruption, black money and terrorism. When he said ‘give me just 50 days and all your big notes and I shall give you freedom from black money’, his exhortation sounded almost as heroic as the famous call of Netaji Subhas Chandra Bose: ‘give me blood and I shall give you freedom’.But on the first anniversary of demonetization, the country can only feel cheated and devastated by the hurtful experiences of real life. What began as temporary disruption has paved the way for a longer-term disaster. India’s 8/11 has borne an uncanny resemblance to America’s 9/11, if the latter was an act of political terrorism by non-state actors, what we have experienced in India is nothing short of a massive blow of economic terrorism delivered by the state itself!

According to the RBI’s own figures, almost all the money that was supposed to be in circulation or private hands came back. If this included any black money it has all become white! The new notes have proved as vulnerable to counterfeits as their old avatars; the incidence of terrorism has certainly not gone down; and if recent reports of corruption from BJP-ruled states, the thriving phenomenon of crony capitalism within Modi’s ‘power parivar’ (be it the now closed Temple Enterprise of Amit Shah’s son or the ‘think-tank business’ of ShouryaDoval, son of National Security Advisor AjitDoval) and the explosive details of offshore operations of the Indian super-rich (individuals as well as companies, including MPs and Ministers of the BJP) as revealed first in the Panama Papers and most recently in the Paradise Papersare anything to go by, corruption, tax evasion and black money have only got more deeply entrenched.

While the gains promised have proved illusory, the pain has been real and brutal – just remember the unconscionable shame of demonetization deaths, the crushing disruption of agriculture and small scale enterprises, cruel loss of livelihood and jobs, unmistakable slowing down of the entire economy, and of course the cost of printing new notes and enforcing the huge countrywide drills of demonetization. And now compounding the blow of demonetization has been the other massive assault of the Modi regime: tax terrorism in the form of GST. With elections round the corner, the government has of late begun to make some modifications on tax slabs and procedures (just like the changing rules of demonetization), but instead of giving any real relief it only underlines the inherently arbitrary and anomalous nature of the entire exercise. Most articles of mass consumption and essential services now attract taxes as high as 18%, if not 28%. While consumers have been badly hurt by GST-induced increase in prices, small businesses are reeling under the complex procedures and manipulations of the GST administration.

Both demonetization and GST have had a common underlying logic of pushing the Indian economy towards greater formalization and digitalization. And the biggest weapon for this coercive push is the most intrusive and ubiquitous mode of state surveillance ever designed for citizens – the biometric identification card ‘Aadhaar’ which is being indiscriminately linked to almost all services. The result is there for all of us to see – not just in the form of a completely unacceptable violation of the fundamental right to privacy but in large numbers of cases of the cruel deprivation and exclusion resulting in denial of ration, pension and relief to the needy and even starvation deaths as are being reported from Jharkhand. For the overwhelming majority of the Indian people, the economic programme of the Modi government during the last one year has looked like a trident of terror with demonetization, GST and Aadhaar as the three forks menacingly aimed at their everyday legitimate activities, earnings and existence.

Modi and Jaitley are trying to showcase demonetization and GST as bold structural reforms that have markedly improved India’s rating according to the World Bank Ease of Doing Business, with India jumping 30 places from 130th position among 190 countries last year to 100th position this year. This report prepared on the basis of surveys done in Delhi and Mumbai is only a commentary on the ease or difficulty of starting and running businesses on the basis of select parameters and not on the performance of those businesses and the state of the economy. A country like China which dominates the global market in terms of production and exports of almost the whole spectrum of consumer goods ranks 78 while most of the constituents of the former socialist countries of East Europe which are caught in a crisis-ridden process of capitalist restoration are placed much higher. The World Bank certificate of an improved ‘Ease of Doing Business’ performance cannot obscure the experience of small businesses in India many of which have actually been eased out in the wake of demonetization.

It is no secret that while Modi and Jaitley are brandishing the World Bank report card, economic data collected by the Modi government and indices compiled by various international institutions present a disturbing picture of steady economic deceleration and alarming levels of chronic mass deprivation and hunger. GDP growth rate has been declining non-stop for six successive quarters, the Global Hunger Index ranks India a lowly 100th among 119 developing countries, and in the Global Gender Gap ranking India has slipped 21 slots to the 108th place among 144 countries with more and more women being hit harder by the economic policies and programmes of the Modi government. But when it comes to tax evasion and potential black money operation, India figures quite high in any global list. In the Paradise Papers, there are as many as 714 Indian names, making India occupy the 19th position among 180 countries. The banking sector has been a major casualty of mega corporate defaults, mounting non-performing assets and credit deceleration triggered by overall economic slowdown have pushed the banks into a major crisis and the government has announced a Rs 2.11 lakh crore recapitalization plan to rescue the banks. Shorn of the terminological clutter, this is a classic case of ‘lemon socialism’: privatization of profits and socialization of losses.

Economic terrorism for the masses, license to loot for crony capitalists and lemon socialism to bail out the rich – this in a nutshell is the unfolding economic agenda of the Modi regime. On the first anniversary of demonetization disaster, the working people everywhere are rising in protest against this assault.

All through November we will see concerted action of the people across the country with student-youth activists campaigning for quality education and secure and dignified employment, Workers from all sectors reaching Delhi on 9-11 November for a massive demonstration outside Parliament and peasants staging their own parliament in Delhi after traversing the length and breadth of the country to demand land rights, freedom from debt and remunerative prices for their produce. A resolute and united movement of the people for bread, land and jobs will be the best bulwark of democracy and just development in the face of the Modi government’s economic aggression and communal hate.

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