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Surgical Strikes On Pak And Black Money Have Failed

This week, it will be a month since the Prime Minister made that dramatic November 8 demonetisation announcement. The decision to devalue Rs. 1,000 and Rs. 500 notes, and the execution of the process of exchanging them for new notes, has proved to be a fiasco. The long queues outside banks from early morning, the empty markets, the despair on the faces of ordinary people, and the shortage of currency notes in the economy are there for all to see.

The BJP-led government realises this. It is too intelligent not to do so. Yet, it cannot step back, tweak the scheme, even at this stage, and make amends. It is too egotistical to do so. That is why, in the rush to explain the scheme and somehow paint it as a success, the government and its ministers and spokespersons - some of whom masquerade as journalists and television anchors - are constantly changing goalposts.

It started with an attack on terrorism and a national security issue. Soon it became obvious that far from being stopped, terrorism and terrorist funding were continuing apace despite demonetisation. The "surgical strike" of September 29 did not stop terrorism, the "surgical strike" of November 8 did not either. Terrorist attacks continue, and our valiant soldiers are still dying. The Line of Control remains a danger zone. Demonetisation has made no difference - after all, only 0.02 per cent of the old notes were counterfeit and used by criminal syndicates and terrorist sponsors.

After national security, the next cause that demonetisation embraced was rooting out black money and fighting corruption. The fact is only six per cent of the black wealth in India is held in cash. The rest is in real estate and gold, primarily. Even this six per cent is being laundered fairly rapidly. As the figures indicate, the entirety of the Rs. 14 lakh crore (in value) of demonetised currency is expected to come back to banks. It is estimated by some analysts and economists that a far larger sum has been stashed away in tax havens and slush funds abroad by corrupt Indian politicians, bureaucrats and businessmen. We keep being promised by the BJP-led government that this money will come home soon. When and how? The government has no answers and so it has resorted to this diversionary tactic called demonetisation.

What are we left with now? The government senses it is in a soup. There is no chance of any black money being unearthed, or of "10-30 per cent" of the Rs. 14 lakh crore being "extinguished", as the government's PR people had claimed. In six months, the cash economy will return in areas where its use is dubious. This is because the government has gone for symbolism and not sought to treat the basic, underlying causes of corruption and black money.

So now, the government has moved goalposts again. Suddenly, this is not about terrorism or corruption or black money - this is about plastic. This is about digital payments, credit and debit card use, mobile wallets. All very good, but where is the infrastructure for this? Telecom connectivity is in shambles in our bigger cities. Credit and debit card readers find it difficult to connect to a payment gateway server in Delhi and Mumbai. Can you imagine the problem in smaller towns, let alone rural areas?

Have people been prepared for this massive shift in consumer behaviour, which the government is forcing upon people? There are parts of India where the local bank is not in the same village, but seven or eight villages away. How do people use cards and visit ATMs here? Where are the shops that accept payments by cards? No wonder 95 per cent of ATM-cum-debit cards in India have been used just to withdraw money from ATMs, not to transact at a retail outlet.

All this is not stopping the APM - the Anytime Propaganda Machine of this government. It is now going on and on about digital payments, using cards, making mobile phones virtual banks. All this is fine, but where are the currency notes? Why was the printing of those new Rs. 2,000 and Rs. 500 denomination notes not organised better and why were they not distributed? Who goofed? Who is accountable? Has demonetisation hurt corruption at all? What is the evidence and where are the numbers? Was this all about plastic money and promoting e-wallets?

The government refuses to answer these questions. It only turns on its questioners. If you question demonetisation, you are "corrupt" and have "vast amounts of black money". If you wonder how demonetisation will tackle terrorism, you are "anti-national" and "pro-Pakistan". If you raise doubts about the easy roll-out and quick acceptance of plastic money and digital payments, you are "anti-modern", "backward" and "holding back the development of the country".