Voice from the Rooftop

Blog of Vincent Augustine D'Souza

Operation Crackpot

Fools rush where angels fear to tread.
Modi government’s move to replace 500 and 1,000 rupee notes with new 500 and 2,000 rupee and later 1,000 notes has been a disaster. The inconvenience for people was supposed to last three days. People with old notes can deposit them up to 31 December 2016. Banks were shut for a day. ATMs were to be shut for two days. Petrol pumps and government hospitals could take old notes for three days. Afterwards everything was supposed to be smooth.
What followed was nightmare for people with white money. Bank customers who had done business for years had to show proof of identity to deposit money. Exchange of old notes to valid notes was limited to 4,000 rupees. ATM withdrawal was limited to 2,000 rupees. After two days most ATMs did not open. Those who opened quickly ran out of money. ATMs had to be recalibrated for 2,000 rupee notes. Out of 2,20,000 ATMs as of 17/11/2016 20,000 ATMs were ready. People had to stand in queue for hours to deposit, withdraw or exchange money. Some slept outside ATMs.
Marriages had to be postponed. Some schools did not accept cheques and students were sent back home. People took leave to stand in queues.
The amounts of withdrawal and exchange were modified. Payment of electricity, gas and water bills by old notes was permitted. For marriage a person could withdraw 2,50,000 rupees. Farmers could withdraw 25,000 rupees against loan per week and traders could withdraw 50,000 rupees per week.
TV coverage was rigged. If two people talked of inconvenience, two people said it was a good move against black money. Short term pain for long term gain, was the statement. In TV studios many journalists were on government side and questioned the patriotism of people who opposed remonetisation or the hardship it caused.
Bank employees had to work long hours. Banks were kept open on second Saturday and Sunday. Use of indelible ink made the process of exchange longer.
Many daily wage earners had no work and no income. Factories reduced work or shut down. Film production suffered. Queues outside theatres vanished.
Modi said rich people were taking sleeping pills, poor were sleeping peacefully. Reality was vastly different. People with black money, except for a few, found ways to whiten their black money. Poor people struggled day after day. Some died standing in queue. Some children died because private hospitals did not accept old notes.
Janardhana Reddy held his daughter’s wedding. Some TV channels claimed the expenditure was 500 crore rupees. Reddy family claimed the expenditure was 30 crore rupees.
Arun Shourie said cash ban was as radical as suicide. Some compared Modi to Tughlaq or Nero or Marie Antoinette.
People with black money are less than one per cent. More than 99% are put to inconvenience due to remonetisation. Taking out 86% of currency from circulation will cripple and damage economy. Some said it was surgical strike against black money. Supreme Court said it was carpet bombing. People with black money will switch to new high denomination notes. It will be black to square one.

Trump Triumphs

The strong man is the strongest when he fights alone.
It is not over till it is over.
Don’t count your chickens before they are hatched.
The best laid plans of men and mice go awry.
When the going gets tough, the tough get going.
Donald John Trump won the Presidential contest against many unfavourable circumstances over a long period of time. His rival Democratic nominee Hillary Clinton had the support of many Republicans, film stars, newspapers and businessmen. Trump waged a lone battle.
When Trump began his campaign in June 2015 not many gave him a chance. In 2011 also he had thought of contesting Presidential election. This time among the candidates for Republican nomination, when his name appeared first in opinion polls, he was second. That was a surprise. When Trump was asked about it he said “Why am I not first?”
When Trump made his first speech as a candidate he attacked Mexicans. From then he dominated news. He said many things which many found outrageous. Many times journalists said Trump has gone too far. It is the end of his candidacy. Nothing of that sort happened.
Trump’s slogan was “Make America Great Again.” Hillary said America is great. We don’t have to make it great again.
Trump repeatedly said “The system is crooked and rigged.” That found resonance with many people.
After the Conventions the electoral fight was bitter and nasty. Trump fought the system, the establishment. People of Republican establishment were not happy with Trump and 50 of them supported Hillary.
Trump had India connection. Once in an interview he said “By the way, India is doing great.” It is said that he has construction projects in Bombay and Poona. Hindu Republicans supported Trump. The slogan was Ab ki baar, Trump Sarkar, copy of a slogan used by Modi in 2014. It was also copied by David Cameron in 2015. On 6 November 2016 he said American companies were moving jobs to India, China, Mexico and Singapore. Trump is said to have sued Kotak Mahindra Bank for their use of Kotak Trump Card and settled the case outside court.
Most polls for six months preceding election put Hillary ahead of Trump. Trump said the polls were rigged. Polls were wrong about Brexit.
Trump said media was against him. That was true to a great extent as 51 newspapers had endorsed Hillary and many TV journalists were against Trump. Trump at his speeches pointed at journalists against him.
Hillary had planned celebration at Javid Centre made of glass and steel, to show she has broken a glass ceiling. On 8 November 2016 after voting was over in New York her supporters gathered there. In initial stages of counting Hillary supporters were jubilant. As counting progressed Trump led in Electoral College votes. Many channels stopped counting Trump votes at 244. Fox News reported other victories of Trump. Around 2 a.m. Eastern time (12.30 p.m. IST) on 9 November 2016 John Podesta, Hillary’s campaign manager, took the stage at Javid Centre. He said Hillary has not done yet. He praised the supporters and wished them good night. At 1.03 p.m. Fox News reported Electoral College 276 votes for Trump. Trump had won the election and had become President-elect.
Pollsters have lost credibility. They were wrong about Brexit. They are wrong about Trump. Nathaniel (Nate) Read Silver in May had predicted Chicago Cubs victory and 8 days later Trump victory. He was right on both counts. If he changed his prediction about Trump later it was a big blow to his reputation. Sanjiv Rai of MogIA had predicted Trump victory. Recently LA Times had predicted Trump victory.

Black money and notes

In USA, 8 November 2016 was Election Day. Indian channels were interested in the election and in the evening there were discussions about elections. I put on RT at 8.08 a.m. At 8.40 p.m. I switched to India Today. It was a surprise to see Modi talking. Greater surprise was to hear about demonetisation of 500 and 1,000 rupee notes. Banks and ATMs are closed on 9 November 2016. People can exchange notes from 10 November 2016 to 30 December 2016 in banks and post offices. There will be new 500 and 2,000 rupee notes. The move is to take black money out of circulation.
Modi’s announcement changed the course of discussion on Indian news TV channels. Panelists who were to discuss American election were out of work unless they could speak on black money. TV channels went to politicians, economists and industrialists for their reaction.
Modi’s move is like curate’s egg, good in parts. The decision to do away with 500 rupee notes was a good one. It is cancelled by new 500 rupees notes. The decision to do away with 500 rupee notes was a good one. It is made worse by having 2,000 rupee notes now and 1,000 rupee notes at a later date.
RBI Governor Urjit Patel said “Notably, in recent years, fake Indian currency notes in high denominations – Rs 500 and Rs 1,000 notes – has been increasing. The government has also observed the misuse of genuine high denomination notes in terror financing and also holding black money.”
Counterfeiting is easy with computers, colour copiers, and scanners. It is just a matter of time before black money is held in new 500, 1,000, and 2,000 rupee notes.
BJP’s opponents, some of them Congress members, have said this move will not change much. Most black money is held in participatory notes, real estate, gold and jewellery. Congress did not end participatory notes when it was in power.
Best thing is to stop printing 500, 1,000 and 2,000 rupees notes. When they are soiled exchange them with 100 rupee notes. Corruption is the main reason for black money. Tax evasion is another. Ending corruption will put an end to black money to a great extent and tackling tax evasion will put an end to black money to some extent. Some taxes have to be lowered or abolished.
In January 1978 Janata government had demonetised 1,000 and 10,000 rupee notes. There was a cartoon. A beggar says to a person who has moved away “Take back this 10,000 rupee note and give me 10 paise.”

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