It’s been close to a week since the whole demonetisation thing. I see people applauding all over, and people dissing all over. As always, like with everything about this Government, people are polarised into two extremes. And again, there is no scope for any objective debate or questioning. Sometimes I wonder if we elected a Government or a religion. Hard to make out the difference on most days.
The very basic thing about any new scheme or idea launched by any body, be it Government, a corporate or a person is that you define what you are trying to achieve. And once you do that, you weigh the costs, the risks and the benefits from a specific plan of action. To go ahead the basic expectation is that the benefits outweigh the costs and the risks by a decent margin.
Given that, one wonders what kind of analysis was done with the whole demonetisation idea:
- What is the benefit expected? Since this is expected to target black money, how do you measure success? How much money in 1000s of crores for example does the Government expect to gain from the exercise?
- What is the cost to be paid? Hundreds of millions of people are struggling with day to day life. Small traders dealing entirely in cash are affected. Those dealing with “expendable” stuff like flowers for daily worship and non-essential items like bakeries, darshinis and movies(not talking just producers, think of all those people who survive on movies, right till those who work in halls) are also going to be affected. A lot of people who would otherwise be productive are standing in queues. This is going to exact a cost on the GDP. How much did the Government estimate this to be in terms of real money numbers?
- What about the cost in terms of lives lost? Every day there is news of someone dying because of lack of medical care from private hospitals, or elderly persons dying because of the strain of standing in queues for hours(this, this and this). Was that included in the costs considered? Or is that acceptable collateral for “the nation”? Who decides this? What sort of nation are we building this way?
Of course, we’ll never know these numbers, as real numbers are something we are never allowed to deal with. Even if there are real numbers announced, how would you know that the numbers were really achieved? Are any numbers in the real world not cooked up? China routinely cooks up its GDP numbers. India is also following suit. How can you trust any numbers these days? It is almost becoming Dilbertian.
Even a basic analysis of black money matters raises some questions.
- What about Black Money from known defaulters like Adani or the big real estate fish? Does the Government know how much is hidden there and what is the plan to bring that out? Of course it wouldn’t want to bring that out.
- What about “agricultural income”? Why is it still exempt completely from Income Tax. It makes sense to protect small farmers, but given that the IT exemption is already set to 2.5 lakhs and only 10% till 5 lakhs, surely big farmers can be taxed? Income is income after all. Also, you can avoid situations like this where the amount under agricultural income is close to Rs.1000 crore. The way it works is that you buy some farmland and declare a lot of your income as coming from that. Of course, the farm would produce something but not to the tune of what you’re declaring. Money becomes white pretty easily.
- Through all this, one man manages to spend Rs. 500 crore on a wedding. All while people queue up to get money for their daily needs. How? Is this really an effort to bring in Black Money?
- And what about PSU loans to NPAs? Who brings them in? All this money going into bank accounts is going to raise the money with the banks. Will that be squandered on NPAs all over again? Apparently, yes.
We had enough problems with the last UPA Govt. People were, somewhat justifiably if you turn enough blind eyes, gung-ho when Modi got elected, despite his cozying up with Adani. And now we’ve reached a stage where Govts are like religions. You can no longer question them without inviting abuse.
And while you’re waiting in a queue, forests get “redirected” to Adani, rivers get interlinked. This is how democracy dies. While you’re waiting in a queue to access your own money.