Black Money
The unearthing of black money was the main objective of note bandi announced by Modi on Nov.8. In this his move has spectacularly failed, as was predicted by most economists and experts. Modi was foolishly expecting that black money held in cash would not be returned. Govt. officials said that anything between Rs.3-6 lakh crore would be unreturned. But all this wishful thinking has come a cropper. As per latest figures, out of the Rs.15.44 lakh crore worth of Rs.500 and Rs.1000 notes that were in circulation before Nov.8, over Rs.14 lakh crore has been returned to banks by the people. Economists had indicated that a small fraction of black wealth is held in cash. Even that has been successfully recirculated by the owners using various devious means. In fact the black economy continues like before.

Terrorism
J&K has seen the highest number of fatalities – 266 – in terrorist violence this year since 2010. Included among these are 187 security forces personnel, the highest toll since 2008. Specifically, in the two months since the note ban took effect, this year saw 43 fatalities compared to 22 last year. In September Modi govt. carried out the so called surgical strikes against Pakistan claiming that this would curb terrorist activities in J&K. But the figures say something else: during September to December 2016, 63 people were killed in J&K including 39 security personnel. In 2015, in the same three months, 43 people were killed including 31 security personnel. Clearly, neither notebandi nor the surgical strike have succeeded in curbing terrorist activities in the trouble torn state.

In fact deaths due to all kinds of terrorist activities in the whole country (J&K, N-E, Naxalites etc.) have increased this year to 890 from 722 last year. This is a direct consequence of the Modi govt.’s short-sighted and opportunist policies based on a weird mix of power hungry opportunism and jingoism, glued together by the idea that security forces can be used as cannon fodder to quell anything and everything.

The idea that terrorists would be unable to function if new currency was introduced was blown apart when two terrorists who were shot dead on Nov 22 at Bandipore, J&K were found in possession of the new Rs.2000 notes.

Fake Currency
This was initially touted by the govt. as one of the objectives but it was a patently ridiculous one. A study commissioned by the govt. had itself pointed out that the best estimate of fake currency in circulation was Rs.400 cr, which is about 0.2% of the total currency in circulation. The study had also said that it can be tackled by better screening at the banks. Withdrawing nearly Rs.16 lakh crore in order to find a mere 0.2% is like taking a sword to swat a fly. In any case, while there are no reports of any significant recovery of fake currency notes in the last two months, we have reports that new currency notes are already copied and are now in circulation in lakhs.
Cashless
Although making India go cashless was not officially announced as an objective of demonetization, Modi himself and his ministers and supporters have been drumming this since the beginning. In a country where 76% population does not have Internet coverage and just 17% people have smartphones, it is a travesty to think that people will adopt cashless payments in any significant way. Be that as it may, to coerce people into adopting cashless transactions by the disastrous note ban is nothing short of an open attack on the lives and rights of people. More than that, it is also a way of privatization of cash transactions and allowing private companies to make a profit every time you buy something. The govt. has thus acted only in favour of big corporations in pushing this line.

Bad Administration
One thing that was revealed by this whole exercise is that Modi is a disastrous administrator, unlike the image his supporters had hyped up about him. The whole note ban exercise was his own pet project, developed in secret by him with a team working at his residence, as if India is not a democracy but some banana republic run by a dictator. The planning was so faulty and full of holes that while people were put to enormous hardship for the past two months, those who actually had black money in cash successfully turned it into white. More than twenty changes were made in the rules as time passed. Such elementary considerations as letting farmers have cash so that they could proceed with sowing of wheat, or marriage expenses or inability of vast population to go cashless were not thought out before in this maniacal and ill-conceived zeal to implement a nonsensical plan.

Courtesy: Communist Party of India Marxist

Modi government’s historic blunder of banning notes on Nov.8 has destroyed the lives of crores of poor people in the country, causing irreversible damage that will cast a long shadow in the months to come. Typically, Modi and his sycophants have been going around claiming that this disastrous ‘plan’ will usher in achhe din for the country, ignoring the hardship and pain it has caused. Here is a brief look at some of the destructive results of Modi’s folly.

Jobs
Various economists have estimated that economic growth will dip by anything between 2 to 7 percent because of note ban. If the economy itself slows down, jobs are going to be lost. This is confirmed by evidence from all corners of the country. Various sectors like automobiles, construction and allied sectors, jewelry, textiles and real estate have reported temporary closures and retrenchments for formal/regular workers. Some reports have indicated that over 4 lakh jobs were lost in the first three weeks of note ban. In the textile sector, nearly 25% jobs were reportedly lost while over 60,000 workers became jobless in the leather sector and about 15-20% workers in the gems and jewelry sector lost their jobs. But the real axe has fallen on contract and casual workers in India’s informal sector that employs 94 percent of the workforce. Large scale stoppage of work was reported from agriculture, micro and small manufacturing, retail and wholesale trade, and various service sector units like shops, warehouses, etc. Informal sector job losses are such that when and how they will be recovered is uncertain. Large scale return migration of agricultural labour from states like Punjab has also taken place. Even MGNREGS jobs declined by 23 percent in the aftermath of notebandi. This was the most devastating blow to the poor given by Modi’s plan.

Wage Loss
Apart from those who lost their jobs, lakhs of agricultural labourers, casual labourers in rural and urban areas, and even formal sector workers lost wages for two to three weeks after the note ban. This was because the whole economy ground to a halt. In some parts of the country, like Jharkhand and Odisha’s tribal belt, daily wage fell to a mere Rs.50 per day. For these millions of daily earners, this was a huge damage and has pushed many into debt. Regular wage earners too had to spend days in queues trying to get out cash just to sustain themselves. Many had to barter away small items in exchange for other necessities while others were forced to accept payments in kind, often at much lower rates (like a kilo of rice for a day’s work). 

Rabi crop
Another major economic loss at mass scale, especially in the Northern states, has been the delay in rabi sowing, especially of wheat. In the week ending 11 November, wheat sowing was down by 41 percent over the normal. After that it continued to be behind schedule and reached normal levels only by 16 December. It was only on 21 November, almost two weeks after the ban was announced that some concession was given for farmers to withdraw cash for completing the sowing process. Reports indicate that farmers somehow managed to get the sowing done after delaying as much as they could but they are now facing the problem of providing water, fertilisers, and other inputs. Many farmers have reported that new plants are not going to survive or may yield low grain output because of pinched input availability.

Farmers' prices
A direct result of the notes ban was that for several weeks afterwards, producers of fruits and vegetables were unable to transport their produce to bigger mandis because of lack of cash. This resulted in prices crashing in rural areas across the country, with some APMCs recording 70 percent drop in prices. In many areas farmers abandoned standing crops of tomatoes and other vegetables, or threw away harvested produce because they did not have the money to transport it. Small farmers have been especially hit because they did not have the kind of resources, credit-worthiness or connections to ride out the storm. Fruit farmers in the hilly states as also orange farmers in Vidarbha lost heavily because their precious crop was sold at throwaway prices.

Nutrition
According to various reports, govt. run nutrition programs in anganwadis and in schools have suffered because of the note ban. Anganwadis reported that over 16 lakh less children turned up to get supplementary nutrition across the country in November compared to October. This was because the anganwadi workers were struggling to arrange food for them with funds inaccessible in banks. Similarly about 5.8 lakh pregnant women and 4.7 lakh nursing mothers, both in dire need of nutrition, were unable to get the supplementary nutrition from anganwadis. Note that in India, over half of pregnant women are anemic and almost a third of infants/children are badly nourished. The sudden deprivation of nutrition would cause irreversible damage to them. Besides this, lack of cash has also destroyed family budgets and would have led to slashing of daily food consumption for at least a few weeks.

Other Suffering
Life was completely thrown out of gear with normal activities like schools, marriages, other family occasions, trips etc. getting postponed. Sickness and injury had to be neglected and treatment postponed, even child birth in remote areas was undertaken at home rather than the nearest govt. center because of lack of cash for transportation. In many cases when expenditures were unavoidable – as in a pre-fixed marriage or medical emergency – the family ran up a huge debt. Many families suffered losses because of having to exchange old notes for less than their value in emergencies. In many rural areas, commodities were selling at higher price if you had only old notes to give, effectively causing a loss to the owner of those notes. Those without bank accounts or who could not get easy access to their banks suffered the most.

Courtesy: Communist Party of India Marxist