Showing posts with label Rahul. Show all posts
Showing posts with label Rahul. Show all posts
Friday 25 August 2023
Sunday 26 March 2023
"Democracy is bad for India"
Former Justice Markandey Katju
Opposition parties in India have joined hands and are crying themselves hoarse in condemning Rahul Gandhi’s conviction and expulsion from Parliament as a huge assault on democracy. Many of the ‘liberal’ mediapersons and so called ‘intellectuals’ in India have also joined the chorus condemning the ‘murder’ of Indian democracy.
One sees hardly any other news in the Indian media nowadays.
However, these people proceed on the assumption that democracy is a good thing in India, which needs to be protected. But is this assumption correct ?
I submit that democracy, like freedom, may in some countries and in some circumstances be a good thing, but in others may be a bad thing, and one should not make a fetish or a holy cow out of it.
I submit that in India democracy is a bad thing, which has kept us backward, and therefore poor. Let me explain.
Everyone who has even a little knowledge of Indian realities knows that in India democracy runs largely on the basis of caste and communal vote banks. Casteism and communalism are feudal forces which have to be destroyed if India is to progress, but parliamentary democracy further entrenches them. How then can India progress with democracy ?
Most of our people have backward mindsets, full of casteism, communalism, and superstitions. Democracy means rule of the majority, but the majority of Indians have feudal mindsets. How can rule by them or their representatives take the country forward ? How can building a Ram temple in Ayodhya or cow protection solve India’s massive problems of poverty, unemployment, hunger, price rise, lack of healthcare etc ?
In my opinion to move forward we have to have an enlightened dictatorship led by modern minded leaders, like Mustafa Kemal of Turkey in the 1920s, or the leaders who came to power in Japan after the Meiji Restoration of 1868, and rapidly industrialised the country.
The Opposition parties in India, even if they unite or form an alliance in next year’s parliamentary elections, have no vision about how to take the country forward. In fact they have nothing in common except the desire to oust the BJP. Even if they win the elections and come to power, the first thing they will do is to scramble for lucrative portfolios.
Thereafter, too, they will keep jostling and infighting, like the constituents of the Janta Party which came to power in 1977, and eventually broke up over internal infighting in 1979.
And what is there in Rahul Gandhi, apart from being a member of the self-proclaimed India’s ‘royal family’? Has he any ideas how to solve India’s massive problems? He has none. All he knows is how to do stunts like the Bharat Jodo Yatra.
Why then should one have any sympathy for him?
Opposition parties in India have joined hands and are crying themselves hoarse in condemning Rahul Gandhi’s conviction and expulsion from Parliament as a huge assault on democracy. Many of the ‘liberal’ mediapersons and so called ‘intellectuals’ in India have also joined the chorus condemning the ‘murder’ of Indian democracy.
One sees hardly any other news in the Indian media nowadays.
However, these people proceed on the assumption that democracy is a good thing in India, which needs to be protected. But is this assumption correct ?
I submit that democracy, like freedom, may in some countries and in some circumstances be a good thing, but in others may be a bad thing, and one should not make a fetish or a holy cow out of it.
I submit that in India democracy is a bad thing, which has kept us backward, and therefore poor. Let me explain.
Everyone who has even a little knowledge of Indian realities knows that in India democracy runs largely on the basis of caste and communal vote banks. Casteism and communalism are feudal forces which have to be destroyed if India is to progress, but parliamentary democracy further entrenches them. How then can India progress with democracy ?
Most of our people have backward mindsets, full of casteism, communalism, and superstitions. Democracy means rule of the majority, but the majority of Indians have feudal mindsets. How can rule by them or their representatives take the country forward ? How can building a Ram temple in Ayodhya or cow protection solve India’s massive problems of poverty, unemployment, hunger, price rise, lack of healthcare etc ?
In my opinion to move forward we have to have an enlightened dictatorship led by modern minded leaders, like Mustafa Kemal of Turkey in the 1920s, or the leaders who came to power in Japan after the Meiji Restoration of 1868, and rapidly industrialised the country.
The Opposition parties in India, even if they unite or form an alliance in next year’s parliamentary elections, have no vision about how to take the country forward. In fact they have nothing in common except the desire to oust the BJP. Even if they win the elections and come to power, the first thing they will do is to scramble for lucrative portfolios.
Thereafter, too, they will keep jostling and infighting, like the constituents of the Janta Party which came to power in 1977, and eventually broke up over internal infighting in 1979.
And what is there in Rahul Gandhi, apart from being a member of the self-proclaimed India’s ‘royal family’? Has he any ideas how to solve India’s massive problems? He has none. All he knows is how to do stunts like the Bharat Jodo Yatra.
Why then should one have any sympathy for him?
Tuesday 14 March 2023
Are these rumbles of discontent coming together?
Jawed Naqvi in The Dawn
A PEOPLE’S movement is underway in Israel against its ultra right-wing government. Prime Minister Netanyahu is trying to subvert the judiciary’s neutrality, with a selfish aim to kill the criminal cases hanging over his head and that of his colleagues. In quite a few democracies, the judiciary is or has been under assault from the right wing for similar reasons. India is witnessing it in unsubtle ways. Pakistan too has seen political interference with the judiciary at least since the hanging of Bhutto. Then Nawaz Sharif and Gen Musharraf, vicious to each other, took turns to undermine the courts. Pakistan, however, has seen mass movements too that have thrown out military dictators and restored democracy even if intermittently. Where’s that old fire in the belly for India?
Describing the unprecedented attack on India’s democracy starkly at a Cambridge University talk is one thing. Few Indian politicians are capable of speaking with conviction without a teleprompter as Rahul Gandhi recently did before an enlightened audience, while also making plenty of sense. But just as he was holding forth — at a talk called ‘Learning to listen in the 21st century’ — two unrelated landmark events were unfolding in Turkiye and Israel. Was he listening to them too?
The events might send any struggling democratic opposition to the drawing board. In Turkiye, a last-minute collapse of the alliance of six disparate parties, preparing to challenge President Recep Tayyip Erdogan’s re-election in May, holds a lesson for any less-than-solid political alliance about possible ambush on the eve of an assured victory. Equally instructive was the opposition’s ability to bury its differences promptly, something that eludes India. The Turkish groups have made compromises with each other so that their common goal to defeat Erdogan remains paramount. There are good chances they would succeed, but even if they don’t, it won’t be for want of giving their best to restore Turkiye’s secular democracy.
However, it was the coming out of Israel’s air force pilots to join the swarming protests against the Netanyahu government that is truly remarkable, and unprecedented. These pilots are usually adept at bombing vulnerable neighbourhoods, including Palestinian quarters. But their taking a stand in defence of democracy offers a lesson to every country with a strong military. There were rumblings in India once. Jaya Prakash Narayan, the mass leader opposed Indira Gandhi’s authoritarian patch and called for the army and the police to disobey her, an unusual quest but an utterly democratic call when democracy itself is being murdered. The RSS had supported the JP movement. The boot today is on the other foot. Does the Indian opposition have the conviction to follow in JP’s footsteps to take on Prime Minister Narendra Modi? Does it at all feel the dire need to make sacrifices and compromises to rescue and heal the wounded nation?
The Israeli government may or may not succeed in neutralising the supreme court, which it has set out to do. But the masses are out on the streets to act when their nation is in peril. And India cannot exist as a nation without democracy. Secular democracy enshrined in its constitution binds it into a whole.
Rahul Gandhi has evolved as a contender for any challenging job that could help save the Indian republic from its approaching destruction. But he should also have a chat with Prof Amartya Sen perhaps who was quoted recently as saying that Mamata Bannerjee would make a good prime minister. Others have their hats in the ring. Gandhi’s talk in the hallowed portals of Cambridge bonded nicely with his 4,000-kilometre walk recently, from the southern tip of India to what is effectively the garrison area of Jammu and Kashmir. No harm if the walk served as a learning curve for the Gandhi scion, but even better if it were a precursor for a mass upsurge as is happening elsewhere, and which has seen successful outcomes in many Latin American and African states.
Rahul Gandhi spoke about the surveillance, which opposition politicians and journalists among others have been illegally put under. His points about deep-seated corruption, that shows up graphically as crony capitalism, are all well taken. Few can match the feat of mass contact across the country that he displayed recently and his declamation at the world’s premier university. The point is that Cambridge University cannot change the oppressive government in India. Only the Indian opposition can. Rahul Gandhi has the credentials to weld mutually suspicious opposition parties into a force to usher in the needed change.
There’s no dearth of issues to unite the people and the parties. To cite one, call out the BJP-backed ruling alliances in north-eastern states where its supporters assert their right to eat beef. And place it along the two Muslim boys incinerated in a jeep near Delhi by alleged cow vigilantes. The criminality and the hypocrisy of it.
The fascist assault on India’s judiciary is an issue waiting to be taken up for nationwide mobilisation. The assault comes at a time when the new chief justice is one with a mind of his own. Judges have stopped accepting official briefs in sealed envelopes as had become the practice, dodging public scrutiny, say, in the controversial warplanes deal with France. The court has set up a probe into the Adani affair, something unthinkable until recently.
The timing of the vicious criticism of the judiciary is noteworthy. The law minister described the judges as unelected individuals, perhaps implying they were answerable to the elected parliament like any other bureaucrat. This is mischievous. The supreme court set new transparent principles in the appointment of election commissioners. It’s a rap on the knuckles of an unholy system. Could anyone call it a fair election in a secular democracy when people are nefariously polarised and the election commission looks the other way? The questions are best answered by opposition parties, preferably in unison.
A PEOPLE’S movement is underway in Israel against its ultra right-wing government. Prime Minister Netanyahu is trying to subvert the judiciary’s neutrality, with a selfish aim to kill the criminal cases hanging over his head and that of his colleagues. In quite a few democracies, the judiciary is or has been under assault from the right wing for similar reasons. India is witnessing it in unsubtle ways. Pakistan too has seen political interference with the judiciary at least since the hanging of Bhutto. Then Nawaz Sharif and Gen Musharraf, vicious to each other, took turns to undermine the courts. Pakistan, however, has seen mass movements too that have thrown out military dictators and restored democracy even if intermittently. Where’s that old fire in the belly for India?
Describing the unprecedented attack on India’s democracy starkly at a Cambridge University talk is one thing. Few Indian politicians are capable of speaking with conviction without a teleprompter as Rahul Gandhi recently did before an enlightened audience, while also making plenty of sense. But just as he was holding forth — at a talk called ‘Learning to listen in the 21st century’ — two unrelated landmark events were unfolding in Turkiye and Israel. Was he listening to them too?
The events might send any struggling democratic opposition to the drawing board. In Turkiye, a last-minute collapse of the alliance of six disparate parties, preparing to challenge President Recep Tayyip Erdogan’s re-election in May, holds a lesson for any less-than-solid political alliance about possible ambush on the eve of an assured victory. Equally instructive was the opposition’s ability to bury its differences promptly, something that eludes India. The Turkish groups have made compromises with each other so that their common goal to defeat Erdogan remains paramount. There are good chances they would succeed, but even if they don’t, it won’t be for want of giving their best to restore Turkiye’s secular democracy.
However, it was the coming out of Israel’s air force pilots to join the swarming protests against the Netanyahu government that is truly remarkable, and unprecedented. These pilots are usually adept at bombing vulnerable neighbourhoods, including Palestinian quarters. But their taking a stand in defence of democracy offers a lesson to every country with a strong military. There were rumblings in India once. Jaya Prakash Narayan, the mass leader opposed Indira Gandhi’s authoritarian patch and called for the army and the police to disobey her, an unusual quest but an utterly democratic call when democracy itself is being murdered. The RSS had supported the JP movement. The boot today is on the other foot. Does the Indian opposition have the conviction to follow in JP’s footsteps to take on Prime Minister Narendra Modi? Does it at all feel the dire need to make sacrifices and compromises to rescue and heal the wounded nation?
The Israeli government may or may not succeed in neutralising the supreme court, which it has set out to do. But the masses are out on the streets to act when their nation is in peril. And India cannot exist as a nation without democracy. Secular democracy enshrined in its constitution binds it into a whole.
Rahul Gandhi has evolved as a contender for any challenging job that could help save the Indian republic from its approaching destruction. But he should also have a chat with Prof Amartya Sen perhaps who was quoted recently as saying that Mamata Bannerjee would make a good prime minister. Others have their hats in the ring. Gandhi’s talk in the hallowed portals of Cambridge bonded nicely with his 4,000-kilometre walk recently, from the southern tip of India to what is effectively the garrison area of Jammu and Kashmir. No harm if the walk served as a learning curve for the Gandhi scion, but even better if it were a precursor for a mass upsurge as is happening elsewhere, and which has seen successful outcomes in many Latin American and African states.
Rahul Gandhi spoke about the surveillance, which opposition politicians and journalists among others have been illegally put under. His points about deep-seated corruption, that shows up graphically as crony capitalism, are all well taken. Few can match the feat of mass contact across the country that he displayed recently and his declamation at the world’s premier university. The point is that Cambridge University cannot change the oppressive government in India. Only the Indian opposition can. Rahul Gandhi has the credentials to weld mutually suspicious opposition parties into a force to usher in the needed change.
There’s no dearth of issues to unite the people and the parties. To cite one, call out the BJP-backed ruling alliances in north-eastern states where its supporters assert their right to eat beef. And place it along the two Muslim boys incinerated in a jeep near Delhi by alleged cow vigilantes. The criminality and the hypocrisy of it.
The fascist assault on India’s judiciary is an issue waiting to be taken up for nationwide mobilisation. The assault comes at a time when the new chief justice is one with a mind of his own. Judges have stopped accepting official briefs in sealed envelopes as had become the practice, dodging public scrutiny, say, in the controversial warplanes deal with France. The court has set up a probe into the Adani affair, something unthinkable until recently.
The timing of the vicious criticism of the judiciary is noteworthy. The law minister described the judges as unelected individuals, perhaps implying they were answerable to the elected parliament like any other bureaucrat. This is mischievous. The supreme court set new transparent principles in the appointment of election commissioners. It’s a rap on the knuckles of an unholy system. Could anyone call it a fair election in a secular democracy when people are nefariously polarised and the election commission looks the other way? The questions are best answered by opposition parties, preferably in unison.
Thursday 9 March 2023
Does the BJP have an obsession with the freedom movement?
Vir Sanghvi in The Print
Should Rahul Gandhi have been critical of the way things are in today’s India when he spoke in the UK? Does this amount to asking white people to colonise India as some BJP supporters have suggested? Or is he merely following in the footsteps of Narendra Modi who has also not always been complimentary on foreign soil about the situation in India, especially in the years after he first became Prime Minister? Is the BJP making the mistake of believing that attacking Narendra Modi’s governance is the same as attacking India, as Congress supporters claim?
There are no ‘yes’ and ‘no’ answers to these questions as we have seen over the last few days as the controversy has raged. My guess is that people who support the government will criticise Rahul while Congress supporters will argue that if he is asked questions about how things are in India, then he should tell the truth and not lie to make Modi look good.
Either way, how you approach this debate is largely determined by what you already believe.
So I am not going to waste your time by recalling the arguments of the last few days all over again. Instead, I am going to ask a different question: is the BJP doing Rahul a favour by making him the centre of a new controversy every week?
Consider the reality of the situation. Ever since he became the Congress’s chief campaigner, Rahul has faced setback after setback. He lost the 2014 election to the BJP and to Modi’s charisma. He tried again in 2019 but was defeated again even in his own constituency of Amethi. During his period as the Congress’s most visible leader, the party has lost state after state. Its top leaders, many of whom were Rahul’s friends, have either left the party or, at the very least, tried to leave. The consensus is that Rahul will not be able to beat Modi at the next election either.
Given this background, does he deserve so much attention? As the BJP itself has told us, he is not fit to be a leader; in fact, it has said much worse things about him, not all of which can be repeated here. So, if he is such a useless person, then why is the BJP so obsessed with him? Why does it use up so much energy in attacking him?
BJP, a party of obsessions
You could argue that despite the Congress’s dismal electoral performance over the years, one reason why Rahul has such a high profile and still acts as though he is the pre-eminent opposition leader is that the BJP takes him so seriously. No other opposition leader is subject to the kind of scrutiny the BJP subjects Rahul to.
In the early days of the BJP’s Rahul obsession, I used to think that the single-minded focus on the Congress leader was strategic. Perhaps, the BJP wanted to shine a spotlight on him to show Narendra Modi in a better light. But that time has long passed. Nobody regards Rahul as the man who will topple Modi in the next election. So why does anything he says rattle the BJP so much?
My conclusion is that the BJP, despite its shrewd grasp of strategy, is becoming more and more a party of obsessions. Take the BJP’s obsession with Nehru. Once upon a time it may have made sense to rubbish Nehru to discredit his descendants. But that ploy has run its course. Even those who support Rahul today do not do so because his great grandfather, who died nearly 60 years ago, was a great guy.
The BJP’s obsession with Nehru now extends to criticising the freedom struggle. It is entirely valid to say that we have made too much of Nehru and ignored other freedom fighters. But is it necessary to insult MK Gandhi and to praise his murderer Nathuram Godse as Sangh Parivar members have done?
Certainly, it does not help the BJP electorally. The attacks are launched not for sound strategic reasons but because a section of the Parivar has its own bizarre obsessions.
Beyond a point, it only makes sense to go on about the freedom struggle if the BJP believes that the Congress massively benefits from its history as the party of Nehru and Gandhi. But does it really? Does anybody believe that this version of the Congress is the party that Gandhi once mentored? I doubt if the Congress gets any votes on that basis.
There is a logic to going on about the freedom struggle if the BJP believes that its leaders have been insufficiently recognised for their role in fighting the British. But this is not the case. The BJP was only founded in 1980. The Jana Sangh, its predecessor, was only established in 1951. Nobody can reasonably expect either party to have been part of the freedom movement because neither existed before India became independent.
This should be fine. Most parties in today’s India were not around before India became independent. They don’t try and rewrite the history of a struggle they were not around for or abuse those who were. Why then does the BJP care so much?
Why BJP does what it does
Yet such is the BJP’s obsession with creating alternative icons that it strains credulity by hijacking historical figures. Yes, Vallabhbhai Patel and Jawaharlal Nehru had differences. But then so did Atal Bihari Vajpayee and Lal Krishna Advani. That does not mean that Advani did not subscribe to the BJP’s ideology. So it is with Patel who even banned the RSS. And so it is with Bhagat Singh who was a left-leaning (communist even) atheist who had nothing in common with the ideology the BJP now espouses. And yes, Subhas Chandra Bose did fall out with Nehru and Gandhi but he was hardly a Hindutva supporter. He named a brigade in the Indian National Army (INA) after Nehru and after the war it was Nehru who defended INA veterans from persecution by the British.
Even the case of VD Savarkar is complicated. Yes, he was a patriot and freedom fighter who suffered for his views. But to hold up Savarkar as your own icon against Gandhi, you have to explain away too many things: his apologies to the British, his differences with the RSS, his support of beef-eating, etc.
So here’s my point: why does the BJP even bother? People who vote for the BJP support it because they admire Narendra Modi, respect his achievements and perhaps because they believe in a vision of a Hindu India. Nobody votes for the BJP because of anything that occurred in the freedom struggle. Or because the party now glorifies Bose or Bhagat Singh.
The only explanation possible is that on some issues – Jawaharlal Nehru and his descendants, the freedom struggle and Gandhi in particular – the BJP goes beyond strategy and gives in to an obsession. It is an uncharacteristic lapse for a party that is otherwise so pragmatic and worldly-wise.
But it works, I suspect, to Rahul Gandhi’s benefit because it keeps him forever in the news and at the centre of the public debate.
Should Rahul Gandhi have been critical of the way things are in today’s India when he spoke in the UK? Does this amount to asking white people to colonise India as some BJP supporters have suggested? Or is he merely following in the footsteps of Narendra Modi who has also not always been complimentary on foreign soil about the situation in India, especially in the years after he first became Prime Minister? Is the BJP making the mistake of believing that attacking Narendra Modi’s governance is the same as attacking India, as Congress supporters claim?
There are no ‘yes’ and ‘no’ answers to these questions as we have seen over the last few days as the controversy has raged. My guess is that people who support the government will criticise Rahul while Congress supporters will argue that if he is asked questions about how things are in India, then he should tell the truth and not lie to make Modi look good.
Either way, how you approach this debate is largely determined by what you already believe.
So I am not going to waste your time by recalling the arguments of the last few days all over again. Instead, I am going to ask a different question: is the BJP doing Rahul a favour by making him the centre of a new controversy every week?
Consider the reality of the situation. Ever since he became the Congress’s chief campaigner, Rahul has faced setback after setback. He lost the 2014 election to the BJP and to Modi’s charisma. He tried again in 2019 but was defeated again even in his own constituency of Amethi. During his period as the Congress’s most visible leader, the party has lost state after state. Its top leaders, many of whom were Rahul’s friends, have either left the party or, at the very least, tried to leave. The consensus is that Rahul will not be able to beat Modi at the next election either.
Given this background, does he deserve so much attention? As the BJP itself has told us, he is not fit to be a leader; in fact, it has said much worse things about him, not all of which can be repeated here. So, if he is such a useless person, then why is the BJP so obsessed with him? Why does it use up so much energy in attacking him?
BJP, a party of obsessions
You could argue that despite the Congress’s dismal electoral performance over the years, one reason why Rahul has such a high profile and still acts as though he is the pre-eminent opposition leader is that the BJP takes him so seriously. No other opposition leader is subject to the kind of scrutiny the BJP subjects Rahul to.
In the early days of the BJP’s Rahul obsession, I used to think that the single-minded focus on the Congress leader was strategic. Perhaps, the BJP wanted to shine a spotlight on him to show Narendra Modi in a better light. But that time has long passed. Nobody regards Rahul as the man who will topple Modi in the next election. So why does anything he says rattle the BJP so much?
My conclusion is that the BJP, despite its shrewd grasp of strategy, is becoming more and more a party of obsessions. Take the BJP’s obsession with Nehru. Once upon a time it may have made sense to rubbish Nehru to discredit his descendants. But that ploy has run its course. Even those who support Rahul today do not do so because his great grandfather, who died nearly 60 years ago, was a great guy.
The BJP’s obsession with Nehru now extends to criticising the freedom struggle. It is entirely valid to say that we have made too much of Nehru and ignored other freedom fighters. But is it necessary to insult MK Gandhi and to praise his murderer Nathuram Godse as Sangh Parivar members have done?
Certainly, it does not help the BJP electorally. The attacks are launched not for sound strategic reasons but because a section of the Parivar has its own bizarre obsessions.
Beyond a point, it only makes sense to go on about the freedom struggle if the BJP believes that the Congress massively benefits from its history as the party of Nehru and Gandhi. But does it really? Does anybody believe that this version of the Congress is the party that Gandhi once mentored? I doubt if the Congress gets any votes on that basis.
There is a logic to going on about the freedom struggle if the BJP believes that its leaders have been insufficiently recognised for their role in fighting the British. But this is not the case. The BJP was only founded in 1980. The Jana Sangh, its predecessor, was only established in 1951. Nobody can reasonably expect either party to have been part of the freedom movement because neither existed before India became independent.
This should be fine. Most parties in today’s India were not around before India became independent. They don’t try and rewrite the history of a struggle they were not around for or abuse those who were. Why then does the BJP care so much?
Why BJP does what it does
Yet such is the BJP’s obsession with creating alternative icons that it strains credulity by hijacking historical figures. Yes, Vallabhbhai Patel and Jawaharlal Nehru had differences. But then so did Atal Bihari Vajpayee and Lal Krishna Advani. That does not mean that Advani did not subscribe to the BJP’s ideology. So it is with Patel who even banned the RSS. And so it is with Bhagat Singh who was a left-leaning (communist even) atheist who had nothing in common with the ideology the BJP now espouses. And yes, Subhas Chandra Bose did fall out with Nehru and Gandhi but he was hardly a Hindutva supporter. He named a brigade in the Indian National Army (INA) after Nehru and after the war it was Nehru who defended INA veterans from persecution by the British.
Even the case of VD Savarkar is complicated. Yes, he was a patriot and freedom fighter who suffered for his views. But to hold up Savarkar as your own icon against Gandhi, you have to explain away too many things: his apologies to the British, his differences with the RSS, his support of beef-eating, etc.
So here’s my point: why does the BJP even bother? People who vote for the BJP support it because they admire Narendra Modi, respect his achievements and perhaps because they believe in a vision of a Hindu India. Nobody votes for the BJP because of anything that occurred in the freedom struggle. Or because the party now glorifies Bose or Bhagat Singh.
The only explanation possible is that on some issues – Jawaharlal Nehru and his descendants, the freedom struggle and Gandhi in particular – the BJP goes beyond strategy and gives in to an obsession. It is an uncharacteristic lapse for a party that is otherwise so pragmatic and worldly-wise.
But it works, I suspect, to Rahul Gandhi’s benefit because it keeps him forever in the news and at the centre of the public debate.
Saturday 4 March 2023
Wednesday 30 November 2022
Tuesday 30 August 2022
The Nehru-Gandhis and the Congress Presidency
Saeed Naqvi in The Dawn
THE media is riveted to the news that the Congress party will elect a new president in October, one who will not be from the Nehru-Gandhi family. So what will that do for the party or even for the country? Usually, insightful friends see in the jostling a pantomime sponsored by corporate chiefs whose names the Gandhis have dared to call out. The ‘rebellion’ within the Congress led by some who never won a Lok Sabha election, is an element in the script. When business captains met in Gujarat ahead of the 2014 elections to name Narendra Modi as their prime ministerial candidate, the move had a main purpose: to ensure the removal of the Gandhis from the opposition frame. The Gandhis on their part never wanted to be in politics. Now, they have an interest: to keep certain party men from capturing the party.
So, elect a new president by all means. However, a truer groundbreaking quest would be to perhaps figure out what really does India’s oldest party plan to do that would make it worthy of being the only party with a pan-India base. Statistics can be a misleading ploy but who can’t deny the hard facts the strangely stacked numbers reveal? The BJP won all of 37 per cent votes nationwide in the last general elections. The Congress got only slightly more than 19pc votes that translated to fewer than 10pc of the Lok Sabha’s seats for the first time.
But statistics are like a babbling toddler. You have to patiently understand the babble to divide the angst or the joy as the case may be. The cold facts are that the Congress was routed in 1977 and removed from power with a tally of 34pc votes, just 3pc fewer than the BJP’s current numbers. And with 34pc, the Congress was routed. However, and this is crucial, what the BJP hasn’t succeeded in doing is to have an imprint with a vote share spread in almost every Indian state. The Congress holds the position despite being in power only in Rajasthan today. Spare a thought for the needed change, if only the Congress puts its act together, not necessarily as the Lone Ranger of Hollywood movies but more like the Samurais of Kurosawa, rallying the entire opposition, resolutely and selflessly. The BJP rubs in the point that the Congress has only two seats in Uttar Pradesh, true. But the BJP had two seats in parliament once, and that was not long ago as Indian politics goes.
Focus is key. The torture the other day of a physically frail Sonia Gandhi being summoned by the government’s revenue sleuths to their offices was despicable. The BJP thrives on being mean with critics and opposition parties. When BJP’s senior leader L.K. Advani was grilled, however, over charges of dubiously transacted election funds wealth, which implied money laundering, the Congress ensured that all questions were asked at Advani’s residence. It was not his privilege, just a courtesy to a senior opposition leader.
However, what was disconcerting other than Sonia trudging to the revenue officers thrice in a row was to see the party ‘in action’ over the matter. Every senior leader was dying to court arrest. They who never came out when mobs killed innocent Indians, or when wrong Indians were sent to jail. Protest the leader’s perverse grilling by all means. But spare a thought also for the time the same leaders were missing from view when a woman was gang-raped in Gujarat of 2002 and her rapists were set free with a nod from the highest court. Masses would have joined the Congress had it protested then as it did Ms Gandhi’s personal trauma. Who was advising the Gandhis to squander the precious chance to redeem their pledge for a national movement when citizens were being assaulted by the state? Is the new president going to lead the charge?
Whatever has happened to the second freedom movement, anyway? Had the leaders spoken out of turn? Was the thought too unwieldy for their brand of slothful politics? In that case it’s so ironical.
Gandhi critics cite the party’s recent habit of perpetually losing elections. They seem less concerned that where the party did win the states with allies, it found its satraps deserting the party to join or help the BJP in toppling the Congress and its allies. Karnataka, Madhya Pradesh and more recently Maharashtra come to mind as states the BJP did not win but rules. Is changing the party president the answer?
It could be crucial, therefore, that while ushering in a new party chief, Congress leaders also define what they meant when they called for a second independence movement. Focus on that instead of undermining the critical importance of the Gandhis, not necessarily as leaders but as a uniting force at this critical juncture of politics ahead of the 2024 polls.
Let’s be clear. The family was thrust into politics by a string of dark events, beginning with Indira Gandhi’s assassination. It’s a lie that her son coveted the job as her successor. There’s no evidence to support the claim. The minions may have created the pressure rightly or wrongly that he alone could save India from the instability triggered by Indira Gandhi’s policies, chiefly towards Punjab, and then by her gruesome death. However, Sonia Gandhi is on record as threatening to leave her husband if he became prime minister. She feared, presciently as it turned out, that he too would be killed. Now that Rahul is setting out on a ‘Unite the nation march’ next month — after having refused the party president’s job yet again — he could be preparing India for the resumption of mass politics that had gone missing from the Congress worldview. He is taking a very necessary risk at a very violent moment in Indian history. Is this ambition?
THE media is riveted to the news that the Congress party will elect a new president in October, one who will not be from the Nehru-Gandhi family. So what will that do for the party or even for the country? Usually, insightful friends see in the jostling a pantomime sponsored by corporate chiefs whose names the Gandhis have dared to call out. The ‘rebellion’ within the Congress led by some who never won a Lok Sabha election, is an element in the script. When business captains met in Gujarat ahead of the 2014 elections to name Narendra Modi as their prime ministerial candidate, the move had a main purpose: to ensure the removal of the Gandhis from the opposition frame. The Gandhis on their part never wanted to be in politics. Now, they have an interest: to keep certain party men from capturing the party.
So, elect a new president by all means. However, a truer groundbreaking quest would be to perhaps figure out what really does India’s oldest party plan to do that would make it worthy of being the only party with a pan-India base. Statistics can be a misleading ploy but who can’t deny the hard facts the strangely stacked numbers reveal? The BJP won all of 37 per cent votes nationwide in the last general elections. The Congress got only slightly more than 19pc votes that translated to fewer than 10pc of the Lok Sabha’s seats for the first time.
But statistics are like a babbling toddler. You have to patiently understand the babble to divide the angst or the joy as the case may be. The cold facts are that the Congress was routed in 1977 and removed from power with a tally of 34pc votes, just 3pc fewer than the BJP’s current numbers. And with 34pc, the Congress was routed. However, and this is crucial, what the BJP hasn’t succeeded in doing is to have an imprint with a vote share spread in almost every Indian state. The Congress holds the position despite being in power only in Rajasthan today. Spare a thought for the needed change, if only the Congress puts its act together, not necessarily as the Lone Ranger of Hollywood movies but more like the Samurais of Kurosawa, rallying the entire opposition, resolutely and selflessly. The BJP rubs in the point that the Congress has only two seats in Uttar Pradesh, true. But the BJP had two seats in parliament once, and that was not long ago as Indian politics goes.
Focus is key. The torture the other day of a physically frail Sonia Gandhi being summoned by the government’s revenue sleuths to their offices was despicable. The BJP thrives on being mean with critics and opposition parties. When BJP’s senior leader L.K. Advani was grilled, however, over charges of dubiously transacted election funds wealth, which implied money laundering, the Congress ensured that all questions were asked at Advani’s residence. It was not his privilege, just a courtesy to a senior opposition leader.
However, what was disconcerting other than Sonia trudging to the revenue officers thrice in a row was to see the party ‘in action’ over the matter. Every senior leader was dying to court arrest. They who never came out when mobs killed innocent Indians, or when wrong Indians were sent to jail. Protest the leader’s perverse grilling by all means. But spare a thought also for the time the same leaders were missing from view when a woman was gang-raped in Gujarat of 2002 and her rapists were set free with a nod from the highest court. Masses would have joined the Congress had it protested then as it did Ms Gandhi’s personal trauma. Who was advising the Gandhis to squander the precious chance to redeem their pledge for a national movement when citizens were being assaulted by the state? Is the new president going to lead the charge?
Whatever has happened to the second freedom movement, anyway? Had the leaders spoken out of turn? Was the thought too unwieldy for their brand of slothful politics? In that case it’s so ironical.
Gandhi critics cite the party’s recent habit of perpetually losing elections. They seem less concerned that where the party did win the states with allies, it found its satraps deserting the party to join or help the BJP in toppling the Congress and its allies. Karnataka, Madhya Pradesh and more recently Maharashtra come to mind as states the BJP did not win but rules. Is changing the party president the answer?
It could be crucial, therefore, that while ushering in a new party chief, Congress leaders also define what they meant when they called for a second independence movement. Focus on that instead of undermining the critical importance of the Gandhis, not necessarily as leaders but as a uniting force at this critical juncture of politics ahead of the 2024 polls.
Let’s be clear. The family was thrust into politics by a string of dark events, beginning with Indira Gandhi’s assassination. It’s a lie that her son coveted the job as her successor. There’s no evidence to support the claim. The minions may have created the pressure rightly or wrongly that he alone could save India from the instability triggered by Indira Gandhi’s policies, chiefly towards Punjab, and then by her gruesome death. However, Sonia Gandhi is on record as threatening to leave her husband if he became prime minister. She feared, presciently as it turned out, that he too would be killed. Now that Rahul is setting out on a ‘Unite the nation march’ next month — after having refused the party president’s job yet again — he could be preparing India for the resumption of mass politics that had gone missing from the Congress worldview. He is taking a very necessary risk at a very violent moment in Indian history. Is this ambition?
Wednesday 24 February 2021
Tuesday 23 February 2021
Bleeding from Shylock’s cut
Jawed Naqvi in The Dawn
SHYLOCK is the big business, Antonio, the political parties. Let’s throw in Portia, symbolising law and justice, but which mostly eludes Indians currently. The news is heart-warming in the interregnum though. A brilliant woman journalist won a tenacious legal battle with an alleged sex predator of a powerful social echelon. And octogenarian leftist poet Varavara Rao got bail too, albeit for six months.
But Rao’s comrades, India’s most brilliant and selfless souls, are cramming the jails. A battery of leftist intellectuals and lawyers along with a merrily self-effacing octogenarian Jesuit priest stand accused of plotting to murder the prime minister in a laughably bizarre plot. Others are facing sedition charges for orchestrating communal violence in Delhi, which their rivals actually waged under police protection.
An American newspaper has revealed how the dubious assassination plot was structured around hacked computers that were used to plant the “evidence” of the purported crime. So, the victories here and there are welcome aberrations — happy aberrations — in a system that stands entrenched against equal rights and dignity for women and which ambushes dissenting citizens at will.
It’s no secret that major political parties receive funds from big business, which becomes a fertile ground for quid pro quo. In fact, it’s a curious rule of thumb that the parties whose leaders are in jail or face charges for alleged graft, are precisely the ones that the corporate lobbies shunned, and, therefore, did not favour with their largesse. It is also likely that the leaders didn’t accept the implied quid pro quo and chose to suffer.
It’s a bit like the movie industry. If one didn’t pick the money from the usurious market the movie is likely never going to find a theatre to screen it. Mayawati and Lalu Yadav are a case in point of politicians who have been made an example of for seeking alternative routes of raising money, tainted money, to fight costly elections, and which they mostly won. Portia will have to be more innovative than leaning on her fabled court craft and throwing in a clever interpretation of law to tilt the argument. Today, she has to weigh the cases as presented.
Chara ghotala or fodder scam is up for public scrutiny and trial by media, a bail-less crime, but an opaque defence deal has to be decided for reasons of national security through sealed envelopes in highest court rooms. This, therefore, is a political battle and has to be fought politically. It is far-fetched to think of defeating a closet patriarchy or a renegade state in a court battle.
In this regard, a key component of Prime Minister Modi’s hare-brained demonetisation move had a clever edge. He mopped up 85 per cent of India’s cash on Nov 8, 2016. The Uttar Pradesh assembly polls began on Feb 11, 2017. By cancelling big currency notes on the eve of a huge election, which Uttar Pradesh always is, he sucked out a vital resource the rivals needed to give him a good fight.
Why don’t Indian parties crowd-fund as some, but only some, sections of the left do? Even in the heartland of capitalism in the United States, Bernie Sanders could come tantalisingly close to becoming president with crowd funding. Delhi’s Aam Aadmi Party came to power with the help of this mostly shunned method of raising electoral funds. In the bargain, AAP inspired donors to see themselves as stakeholders in the great endeavour.
We read in the morning paper that India’s main opposition Congress party has run out of money. Elections are due in key states where the party could do well, primarily Assam, with clever handling. It’s a wrong time not to have money. West Bengal, Tamil Nadu, Pondicherry and Kerala are also up for polls.
Being in penury, or near penury, is, however, a good sign for the Congress party and may not be such a bad idea for India’s democracy either. Remember the tycoons muscling their way through pliable media contacts to claim cabinet berths for their acolytes in the second innings of the Congress-led alliance of Manmohan Singh? The ministry of telecommunications was crucial to the quest. And with all the deals being done to monopolise data and e-commerce today, the stakes were bound to be high. The BJP has emerged as the monopoly beneficiary of corporate donations, not least by tweaking the law to make the transactions opaque. No surprise there.
A great reason for the Congress’s financial crunch is Rahul Gandhi’s decision to make a direct connection between India’s prevailing economic crisis and Mr Modi’s patronage of his crony capitalist friends. Protesting farmers, dissenting intellectuals and assorted environmentalists across the world have seen through the plot. (Whoever can see the plot is an enemy of the state.)
On the flip side of the Congress’s course correction under Gandhi, an interview was published of Punjab’s Congress Chief Minister Amarinder Singh. He is rowing back from the bold demands by the farmers for the repeal of pro-business farm laws. Singh favours suspending the laws for two years instead of annulling them. The India Today magazine did some fact-checking to show that Singh had not met Modi’s friend Mukesh Ambani, as claimed, a day ahead of the nationwide strike by the farmers. The cordial picture of the two was from 2017.
Amarinder’s challenger in Congress is cricketer-turned-politician Navjot Sidhu, a vocal critic of big business. Shylock is hemorrhaging India. Rahul Gandhi is losing his MLAs to corporate-political pelf, the latest casualty being his government in Pondicherry. It’s time he went to the people with the bowl, an agreeable way to involve them in his bold analysis of the country’s crisis. He can start to stitch the wounds, not as a grand leader for which he must win a mandate, but as a caring citizen like those languishing in jails. The Congress will be the richer for it. Good for Portia too.
SHYLOCK is the big business, Antonio, the political parties. Let’s throw in Portia, symbolising law and justice, but which mostly eludes Indians currently. The news is heart-warming in the interregnum though. A brilliant woman journalist won a tenacious legal battle with an alleged sex predator of a powerful social echelon. And octogenarian leftist poet Varavara Rao got bail too, albeit for six months.
But Rao’s comrades, India’s most brilliant and selfless souls, are cramming the jails. A battery of leftist intellectuals and lawyers along with a merrily self-effacing octogenarian Jesuit priest stand accused of plotting to murder the prime minister in a laughably bizarre plot. Others are facing sedition charges for orchestrating communal violence in Delhi, which their rivals actually waged under police protection.
An American newspaper has revealed how the dubious assassination plot was structured around hacked computers that were used to plant the “evidence” of the purported crime. So, the victories here and there are welcome aberrations — happy aberrations — in a system that stands entrenched against equal rights and dignity for women and which ambushes dissenting citizens at will.
It’s no secret that major political parties receive funds from big business, which becomes a fertile ground for quid pro quo. In fact, it’s a curious rule of thumb that the parties whose leaders are in jail or face charges for alleged graft, are precisely the ones that the corporate lobbies shunned, and, therefore, did not favour with their largesse. It is also likely that the leaders didn’t accept the implied quid pro quo and chose to suffer.
It’s a bit like the movie industry. If one didn’t pick the money from the usurious market the movie is likely never going to find a theatre to screen it. Mayawati and Lalu Yadav are a case in point of politicians who have been made an example of for seeking alternative routes of raising money, tainted money, to fight costly elections, and which they mostly won. Portia will have to be more innovative than leaning on her fabled court craft and throwing in a clever interpretation of law to tilt the argument. Today, she has to weigh the cases as presented.
Chara ghotala or fodder scam is up for public scrutiny and trial by media, a bail-less crime, but an opaque defence deal has to be decided for reasons of national security through sealed envelopes in highest court rooms. This, therefore, is a political battle and has to be fought politically. It is far-fetched to think of defeating a closet patriarchy or a renegade state in a court battle.
In this regard, a key component of Prime Minister Modi’s hare-brained demonetisation move had a clever edge. He mopped up 85 per cent of India’s cash on Nov 8, 2016. The Uttar Pradesh assembly polls began on Feb 11, 2017. By cancelling big currency notes on the eve of a huge election, which Uttar Pradesh always is, he sucked out a vital resource the rivals needed to give him a good fight.
Why don’t Indian parties crowd-fund as some, but only some, sections of the left do? Even in the heartland of capitalism in the United States, Bernie Sanders could come tantalisingly close to becoming president with crowd funding. Delhi’s Aam Aadmi Party came to power with the help of this mostly shunned method of raising electoral funds. In the bargain, AAP inspired donors to see themselves as stakeholders in the great endeavour.
We read in the morning paper that India’s main opposition Congress party has run out of money. Elections are due in key states where the party could do well, primarily Assam, with clever handling. It’s a wrong time not to have money. West Bengal, Tamil Nadu, Pondicherry and Kerala are also up for polls.
Being in penury, or near penury, is, however, a good sign for the Congress party and may not be such a bad idea for India’s democracy either. Remember the tycoons muscling their way through pliable media contacts to claim cabinet berths for their acolytes in the second innings of the Congress-led alliance of Manmohan Singh? The ministry of telecommunications was crucial to the quest. And with all the deals being done to monopolise data and e-commerce today, the stakes were bound to be high. The BJP has emerged as the monopoly beneficiary of corporate donations, not least by tweaking the law to make the transactions opaque. No surprise there.
A great reason for the Congress’s financial crunch is Rahul Gandhi’s decision to make a direct connection between India’s prevailing economic crisis and Mr Modi’s patronage of his crony capitalist friends. Protesting farmers, dissenting intellectuals and assorted environmentalists across the world have seen through the plot. (Whoever can see the plot is an enemy of the state.)
On the flip side of the Congress’s course correction under Gandhi, an interview was published of Punjab’s Congress Chief Minister Amarinder Singh. He is rowing back from the bold demands by the farmers for the repeal of pro-business farm laws. Singh favours suspending the laws for two years instead of annulling them. The India Today magazine did some fact-checking to show that Singh had not met Modi’s friend Mukesh Ambani, as claimed, a day ahead of the nationwide strike by the farmers. The cordial picture of the two was from 2017.
Amarinder’s challenger in Congress is cricketer-turned-politician Navjot Sidhu, a vocal critic of big business. Shylock is hemorrhaging India. Rahul Gandhi is losing his MLAs to corporate-political pelf, the latest casualty being his government in Pondicherry. It’s time he went to the people with the bowl, an agreeable way to involve them in his bold analysis of the country’s crisis. He can start to stitch the wounds, not as a grand leader for which he must win a mandate, but as a caring citizen like those languishing in jails. The Congress will be the richer for it. Good for Portia too.
Tuesday 12 June 2018
Pranab Mukherjee's visit to RSS HQ explained
Jawed Naqvi in The Dawn
TWO lobbies were clearly worried by a photograph that was clicked during the swearing-in celebrations of the Karnataka anti-BJP coalition. It showed Congress leader Sonia Gandhi locked in a rare embrace with Dalit leader Mayawati. The picture had other leaders who were opposed to the Modi-led BJP government basking in the glory of the Karnataka victory, but the hugging of the two women was a defining moment. Insidious advisers to the Congress leadership had stalled their coming together in the past.
Among the understated reasons was the stark reality that some of the Gandhi family’s upper-caste advisers also happened to be conduits for the mercantile lobbies based in Mumbai. The photograph threatened both, the tycoons and their caste protégés adorning the upper houses of legislatures, where those who cannot win the Lok Sabha or assembly polls are given a cosy perch, not just in Congress.
There is a brouhaha about former president and former Congress minister Pranab Mukherjee’s visit to the Rashtriya Swayamsevak Sangh headquarters. It’s surprising why no one has linked the visit with the Karnataka photo. Mukherjee is an educated Brahmin, flaunting the requisite links with Mumbai businesses, which could be a temptation for the RSS leadership to sound him out.
It is possible of course that the nudge for the meeting came from the mercantile club in Mumbai. It has acquired the habit of late of playing kingmakers. Remember how hard they had lobbied with the RSS to make Narendra Modi the BJP’s prime ministerial candidate?
They finance other parties too, not the least the Congress party. But there is a silent caveat here. The Congress that forms the government or heads a coalition should not offer the prime minister’s job to a Gandhi, and we have had two such non-Gandhi Congress prime ministers to press the point.
-----Also Read
There is a history to this reasoning and the Gandhi family has been pitchforked as the villains, or the heroes, depending on where you are vis-Ã -vis crony capitalism. Jawaharlal Nehru had no love lost for the mercantile leaders whom Gandhiji otherwise saw as the trustees of a free India. Nehru put their biggest icon in jail for fraud. (R.K. Dalmia’s close friendship with Mohammad Ali Jinnah may have been an added allergen.)
Then came Indira Gandhi. She nationalised the cabal’s ‘usurious’ banks and also locked up several of them under the draconian Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, the law she passed just before the 1975-77 emergency.
Mr Mukherjee recently chronicled his political innings from 1980 onwards. That marked the post-emergency return for Indira Gandhi who was looking vulnerable after her traditional left supporters deserted her over the emergency. Mr Mukherjee’s proximity to the Mumbai tycoons is well documented in books that predictably did not make it to bookshops. He became a darling of the media as her finance minister, the same media that is celebrating his visit to the RSS headquarters although he said perfectly liberal, pro-constitution things there. When Mrs Gandhi was killed, Mr Mukherjee reportedly saw himself as her natural successor, a thought resented by her family friends.
Rajiv Gandhi arrived to throw the ‘moneybags off the backs of the Congress workers’. He sent Mukherjee into political oblivion. The tycoons, however, swung into action. Every inch of media space they owned was harnessed to tarnish the young prime minister with financial scams. His death brought the cabal and Mukherjee back into the heart of Indian politics, both firmly embraced by Narasimha Rao.
One more twist followed. When Rao lost the elections in 1996, he handed over the Congress presidency to Sitaram Kesri, a canny grass-roots Congressman. The change was accepted by the Gandhis who saw in Kesri a better chance of getting to the bottom of Rajiv’s murder mystery than Rao had delivered. Also Kesri shored up two prime ministers with the help of communists.
I remember asking him at a news conference why he had taken the unusual step to ally with Dalit leader Mayawati in 1998. Did he see her as an asset as a woman leader, or was she a potential Dalit ally? Kesri exploded with joy. Both, he yelled. We don’t know which of the Congress rivals locked him up in the bathroom subsequently and handed the leadership to a still reluctant Sonia Gandhi, who had evidently not yet recovered from the shock of her husband’s assassination. Mukherjee was part of the group, or perhaps its leader, that went after Kesri in what can only be described as a palace coup. Kesri saw himself as a Gandhi loyalist and didn’t know what hit him. He died from the shock.
It is said that the Mumbai club has applied a financial squeeze on the Congress party for flirting with state leaders they do not control. This could be a blessing in disguise for the party. It could bring the Gandhis close to crucial leaders like Mayawati, Arvind Kejriwal, Lalu Yadav and Mamata Banerjee who have to fend for themselves financially.
If, like Kejriwal, Rahul Gandhi goes for crowd funding instead of leaning on crony tycoons for support, he might become a richer, cleaner leader. But before that, he must do with the current potential ‘Congress Syndicate’ what Emperor Akbar did with his regent Bairam Khan or Nehru did with his detractors clothed as advisers. They could be sent to work with the masses under a new Kamraj Plan to borrow from the Congress history.
Above all, it was Mayawati’s sacrifice and not ambition that has reaped rewards for a rejuvenated opposition. Rather than aim to become prime minister, Rahul Gandhi would do well to watch out for deserters, no matter how educated they are, while embracing the game-changing picture from Karnataka.
TWO lobbies were clearly worried by a photograph that was clicked during the swearing-in celebrations of the Karnataka anti-BJP coalition. It showed Congress leader Sonia Gandhi locked in a rare embrace with Dalit leader Mayawati. The picture had other leaders who were opposed to the Modi-led BJP government basking in the glory of the Karnataka victory, but the hugging of the two women was a defining moment. Insidious advisers to the Congress leadership had stalled their coming together in the past.
Among the understated reasons was the stark reality that some of the Gandhi family’s upper-caste advisers also happened to be conduits for the mercantile lobbies based in Mumbai. The photograph threatened both, the tycoons and their caste protégés adorning the upper houses of legislatures, where those who cannot win the Lok Sabha or assembly polls are given a cosy perch, not just in Congress.
There is a brouhaha about former president and former Congress minister Pranab Mukherjee’s visit to the Rashtriya Swayamsevak Sangh headquarters. It’s surprising why no one has linked the visit with the Karnataka photo. Mukherjee is an educated Brahmin, flaunting the requisite links with Mumbai businesses, which could be a temptation for the RSS leadership to sound him out.
It is possible of course that the nudge for the meeting came from the mercantile club in Mumbai. It has acquired the habit of late of playing kingmakers. Remember how hard they had lobbied with the RSS to make Narendra Modi the BJP’s prime ministerial candidate?
They finance other parties too, not the least the Congress party. But there is a silent caveat here. The Congress that forms the government or heads a coalition should not offer the prime minister’s job to a Gandhi, and we have had two such non-Gandhi Congress prime ministers to press the point.
-----Also Read
The Marwari hegemony of Indian Media
-------
There is a history to this reasoning and the Gandhi family has been pitchforked as the villains, or the heroes, depending on where you are vis-Ã -vis crony capitalism. Jawaharlal Nehru had no love lost for the mercantile leaders whom Gandhiji otherwise saw as the trustees of a free India. Nehru put their biggest icon in jail for fraud. (R.K. Dalmia’s close friendship with Mohammad Ali Jinnah may have been an added allergen.)
Then came Indira Gandhi. She nationalised the cabal’s ‘usurious’ banks and also locked up several of them under the draconian Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, the law she passed just before the 1975-77 emergency.
Mr Mukherjee recently chronicled his political innings from 1980 onwards. That marked the post-emergency return for Indira Gandhi who was looking vulnerable after her traditional left supporters deserted her over the emergency. Mr Mukherjee’s proximity to the Mumbai tycoons is well documented in books that predictably did not make it to bookshops. He became a darling of the media as her finance minister, the same media that is celebrating his visit to the RSS headquarters although he said perfectly liberal, pro-constitution things there. When Mrs Gandhi was killed, Mr Mukherjee reportedly saw himself as her natural successor, a thought resented by her family friends.
Rajiv Gandhi arrived to throw the ‘moneybags off the backs of the Congress workers’. He sent Mukherjee into political oblivion. The tycoons, however, swung into action. Every inch of media space they owned was harnessed to tarnish the young prime minister with financial scams. His death brought the cabal and Mukherjee back into the heart of Indian politics, both firmly embraced by Narasimha Rao.
One more twist followed. When Rao lost the elections in 1996, he handed over the Congress presidency to Sitaram Kesri, a canny grass-roots Congressman. The change was accepted by the Gandhis who saw in Kesri a better chance of getting to the bottom of Rajiv’s murder mystery than Rao had delivered. Also Kesri shored up two prime ministers with the help of communists.
I remember asking him at a news conference why he had taken the unusual step to ally with Dalit leader Mayawati in 1998. Did he see her as an asset as a woman leader, or was she a potential Dalit ally? Kesri exploded with joy. Both, he yelled. We don’t know which of the Congress rivals locked him up in the bathroom subsequently and handed the leadership to a still reluctant Sonia Gandhi, who had evidently not yet recovered from the shock of her husband’s assassination. Mukherjee was part of the group, or perhaps its leader, that went after Kesri in what can only be described as a palace coup. Kesri saw himself as a Gandhi loyalist and didn’t know what hit him. He died from the shock.
It is said that the Mumbai club has applied a financial squeeze on the Congress party for flirting with state leaders they do not control. This could be a blessing in disguise for the party. It could bring the Gandhis close to crucial leaders like Mayawati, Arvind Kejriwal, Lalu Yadav and Mamata Banerjee who have to fend for themselves financially.
If, like Kejriwal, Rahul Gandhi goes for crowd funding instead of leaning on crony tycoons for support, he might become a richer, cleaner leader. But before that, he must do with the current potential ‘Congress Syndicate’ what Emperor Akbar did with his regent Bairam Khan or Nehru did with his detractors clothed as advisers. They could be sent to work with the masses under a new Kamraj Plan to borrow from the Congress history.
Above all, it was Mayawati’s sacrifice and not ambition that has reaped rewards for a rejuvenated opposition. Rather than aim to become prime minister, Rahul Gandhi would do well to watch out for deserters, no matter how educated they are, while embracing the game-changing picture from Karnataka.
Thursday 28 December 2017
Modi Songs
The East India Comedy
Shashi Tharoor on India's Demonetisation Disaster
Change comes in many forms to different countries. Some embrace change, some resist change, and some have change thrust upon them. Take India, which was plunged into chaos on the night of November 8th, 2016, when Prime Minister Narendra Modi, in a 48-minute address, announced that some ₹14 trillion worth of ₹500 and ₹1000 notes (roughly $7.50 and $15.00)—amounting to 86 percent of all the currency in circulation in
India—would become illegal as of midnight. People would have until the end of the year to deposit them in bank accounts (and pay whatever taxes and fines the authorities decided to impose on them), but they were no longer legal tender.
India—would become illegal as of midnight. People would have until the end of the year to deposit them in bank accounts (and pay whatever taxes and fines the authorities decided to impose on them), but they were no longer legal tender.
This unexpected shock-and-awe announcement, Modi said, fulfilled a declared campaign objective to fight “black money” or, put another way, cash made from tax evasion, crime, and corruption. The prime minister declared that his announcement would not only rid the nation of black money, it would render worthless the counterfeit notes that were reportedly printed by Pakistan to fuel terrorism against India.
The initial stunned reaction was followed by a panicky scramble to unload the expiring notes: the very night of the announcement, people rushed to petrol pumps to fill up their tanks, jewelers tripled their sales, and loans were hastily returned. There were unexpected consequences too: housewives who had salted away their savings in biscuit tins for a rainy day found their years of thrift would soon be worthless. In most cases, even their husbands had not known how much their wives had saved.
But within days the real result of the Modi announcement became apparent—the severe disruption of normal economic activity. Inept implementation made a mockery of the initial shock-and-awe. Not nearly enough new currency had been printed before the announcement (some estimates were that only 4 percent of replacement currency was printed), so banks did not even have a fraction of the money needed to meet consumer demand for new notes. Long queues snaked in, outside and around banks, foreign exchange counters (including at the international airport), and ATMs to change the old notes and withdraw new ones.
But the ATMs were largely empty, since the new notes had been made in a different size from the old ones and did not fit the existing ATMs. These needed re-calibration, a process that took tens of thousands of engineers several months to complete. The Government had not thought of making the new notes the same size as the old to avoid this obvious problem.
An additional complication was the fact that there are not enough ATMs in India: the country disposes ofonly 20 ATMs per 100,000 people, as compared to 77 in China, 114 in Brazil, and 279 in South Korea. Even South Africa has 70 ATMs per 100,000 people.
In the meantime, thanks to the slow speed of the Mint’s presses, cash was in short supply. Banks did not have enough money and so restricted withdrawals to small amounts of cash that most customers found insufficient. Though the permissible withdrawal limits kept changing, being raised and lowered confusingly, they went up with time—provided the bank had the cash available when one asked for it.
Such restrictions are arguably illegal—under which provision of law can an Indian citizen be denied access to the money in his or her own account? When, in Parliament, I asked the Finance Minister to name one country in the world that disallows people from withdrawing their own money from a bank, he could give me no reply.
Thirty days after the prime minister’s speech (in which he had asked the public to bear with inconvenience for just 50 days), only 30 percent of the currency in circulation had been restored. The Reserve Bank of India (RBI) told the Public Accounts Committee of Parliament on January 18th that it was up to 60 percent. The State Bank of India estimated that it would go up to 70 percent by the end of February.The Government’s own annual Economic Survey 2016–2017, released on February 1st, then claimed that replenishing the cash supply will be complete by March 2017—but that target too slipped. Cash shortages remained for months more; the rate of printing new ₹500 notes fell below target. It took another three months to remonetize the banking system.
The initial replacement notes all came in the form of an unusually high denomination (₹2,000 or $30) that most people did not find useful—especially since the government’s failure to print additional quantities of smaller notes meant that for weeks no one was able to make change for a ₹2000 note. Since over 90 percent of all financial transactions in India are made in cash, and over 85 percent of workers are paid their incomes in cash, the everyday economy was brought to a standstill in the last two months of the year. The recovery in the new year was slow, and official figures showed a marked slowdown in the country’s growth rate in the first quarter of 2017.
If this points to an appalling lack of elementary planning on the part of the government, the broader consequences have been far worse. The economy has plunged into chaos, and the decision looks more like a miscalculation than a masterstroke.
The lack of cash reduced both consumption and demand across the board. A booming economy that boasted the highest growth rate in the world suddenly became a cash-scarce economy. Production went down in all sectors. Small producers could not get working capital to keep their businesses going, and many had to shutdown. Daily-wage workers (a large majority of India’s labor force) lost their jobs because firms did not have the cash to pay them.
All indicators—sales, traders’ incomes, production, and employment—were down in November/December 2016; India’s GDP, as estimated by former Prime Minister Manmohan Singh, will shrink by around a full percentage point for the fiscal year. At the end of January, former Finance Minister P. Chidambaram went further, saying that he expected the rate to be no more than 6 percent in 2017–2018 and 6.5 percent in 2018–2019, extending the bad news by another two years.
The Economic Survey 2016–2017 released on January 31st by the Chief Economic Advisor to the government itself states that demonetization is an aggregate demand shock, an aggregate supply shock, an uncertainty shock, and a liquidity shock. It says that the cash crunch “must have” affected the informal economy, which accounts for nearly half of the overall GDP and about 80 percent of the employment economy—one which runs on cash.
India’s unemployment rate has shot up to a five-year high of 5 percent in 2015–2016. According to the All-India Manufacturers’ Organization (AIMO), macro- and small-scale industries and traders have incurred 60 percent job losses and a 47 percent revenue loss because of demonetization. Not only are small-and medium-sized enterprises shutting down; medium and large infrastructure companies surveyed by AIMO have reported a 35 percent drop in employment and a 45 percent drop in revenue. AIMO estimated even higher losses of jobs and revenue by the end of March.
Current estimates tell us that real estate, construction, and infrastructure, which provide the most employment after agriculture, are set to lose over 100,000 jobs in 2017. The eight lakh crore (₹8 trillion) construction industry, which employs 45 million people, has virtually ground to a halt, with a drop of 80-90 percent in income.
There has been an inventory pile-up due to low consumer demand. Local industries—footwear in Agra, garments in Tirupur—suspended work due to a lack of money. Several enterprises are now struggling to their feet, whereas many have not been able to resume at all.
The informal financial sector—rural moneylenders who provide loans that amount to 40 percent of India’s total lending—has all but collapsed.
R ural India is in bad shape. The fishing industry, dependent entirely on cash sales of freshly-caught fish, has been deeply affected. This is even affecting coastal security, as I pointed out during Question Hour in Parliament, because the cash shortage has dramatically reduced the number of boats going out to sea to about 10 percent of previous levels, thereby reducing the number of eyes and ears available to our intelligence agencies monitoring suspicious activities in our waters.
Traders are losing perishable stocks and farmers have been unloading produce below cost—since no one has the money to purchase their freshly harvested crops. Peas that Punjabi farmers sold at ₹30 a kilo only a year ago were brought down to seven rupees a kilo two months after demonetization.
The liquidity crisis has deeply affected farm production, farm prices, and agricultural credit repayments.A study by two economists at Delhi’s Indira Gandhi Institute of Development Research found that in mid-November 2016, deliveries of rice to rural wholesale markets were 61 percent below usual levels, soybeans were down 77 percent, and maize nearly 30 percent. The winter crop could not be sown in time, because no one had cash for seeds, and the resultant harvest was lower than projected.
All this has been hugely destabilizing in the short term. The prime minister asked people to be patient for 50 days, but those 50 days are long gone and it is clear that the process will take much longer before normal money supply is restored. As for the long term, as former Prime Minister Manmohan Singh trenchantly observed, quoting Keynes, “in the long run, we are all dead.”
The story of demonetization was of unnecessary suffering throughout the country. As ordinary people clutching their savings wasted hours standing patiently in queues that offered no assurance of money at the other end, fatalism battled with exasperation. Stories of individual tragedies were reported daily—of hospitals turning away patients who only had old notes, children not being fed, middle-class wage-earners unable to buy medicines for the sick, and as many as 135 people reportedly dying after collapsing in bank queues or committing suicide. Ironically, the rich—more likely to hold credit cards and be “cashless”—have been relatively unaffected; the main victims have been the poor and the lower middle-classes, who rely on cash for their daily activities.
Thus, those at the bottom of the economic pyramid are the principal victims of this supposedly “pro-poor” policy. Yet they have reacted with stoicism, swayed by the government’s assiduous public relations messaging that portrays their difficulties as a small sacrifice for the nation. “If our soldiers can stand for hours every day guarding our borders,” one popular, and hugely effective, social media meme asked, “why can’t we stand for a few hours in bank queues?”
The impact of the demonetization in terms of the cash deficit and its consequences has been particularly severe in Kerala, the state I represent in Parliament, because of the distinct character of its banking sector, in which the cooperative sector and Primary Cooperative Societies play a central role.
Overall, the cooperative banking sector is much more active and vibrant in Kerala than elsewhere in India. As a result, over 70 percent of the deposits in cooperatives in India come from Kerala; over 70 percent of the non-agricultural loans and advances made in India are made in Kerala; and over 15 percent of agricultural loans and advances disbursed in India are disbursed in Kerala. But the Reserve Bank of India prevented all 370 central district cooperative banks and 93,000 primary agricultural credit societies in the country from depositing or converting old notes after November 8th, 2016.
Keeping the cooperative banks and societies out of the note exchange process was particularly damaging for Kerala. Dairy, agriculture, and the market for fish have all been severely affected.
Tourism, vital for India’s economy, was hit hard, albeit briefly. Foreigners have been spared tragedy but not inconvenience, for they were only allowed to cash a hundred dollars a day and often had to go from bank to bank to get the money. In November 2016, for instance, tourists returned without seeing the Taj Mahal because their notes were not accepted at the ticket window, and travel plans were curtailed by lack of new money.
Tourism works by word of mouth: how will one regain the trust of foreigners that have already spread the word of their harrowing ordeals in demonetizing India?
While it is clear that the government had not done its homework before launching the scheme—and in a manner typical of the Modi Administration, had consulted very few officials within it—it is not the prime minister’s style to be on the defensive. His propagandists boasted of a “surgical strike” on black money, corruption, terrorism, and counterfeiting. Over time, it became painfully clear that those objectives had not been met. A “surgical strike” is supposed to be precisely targeted, but it is clear that the collateral damage is so extensive that the pain it has inflicted outweighed any tangible gain, at least in the short term.
In the beginning of December 2016, new victims surfaced, ranging from salary earners trying to get money out of their bank accounts and pensioners unable to receive their monthly allowances, to fathers and brides unable to finance long-planned weddings at the peak of the Hindu marriage season. As late as the end of January 2017, Indians were surviving on less than half the cash that had been in circulation at the beginning of November 2016. Shockingly, this was all happening in a country where cash represented 98 percent of all transactions by volume and 68 percent by value. While the cash is now largely back in circulation, memories of demonetization have shaken many people’s faith in the currency.
Indeed, the Modi government itself has effectively conceded that demonetization has failed and has had a severe adverse economic impact on India. In its list of achievements touted in the Economic Survey 2016–2017, the list takes note of assorted schemes continued from the previous regime, but fails to mention demonetization. The Survey also accepts that demonetization resulted in “growth slow[ing], as demonetization reduced demand (cash, private wealth) [and] supply (reduced liquidity and working capital and disrupted supply chains), and increased uncertainty” and “job losses, decline in farm incomes, social disruption, especially in cash intensive sectors.” To this must be added the economic cost of printing and replacing notes, estimated at ₹1.25 trillion.
Unfortunately, there is no evidence that any of the declared objectives of the scheme will be attained. In a largely cash-fueled economy, all cash is not “black money” and all black money is not cash. In fact most of India’s black money has been invested in real estate and other forms of property, gold and jewelry, investments in property abroad, and “round-tripping” that has seen the money return to India’s stock market as “foreign investment” via countries like Mauritius. The Modi move, therefore, touches only a small proportion of black money assets.
Worse, the government had hoped that the sudden move would eliminate a large portion of the black money holdings altogether from the government’s liabilities, since it was assumed that many hoarders would destroy their money rather than attract the attention of the taxman by declaring it. Various agencies of the government had initially estimated that around 25 to 35 percent of the demonetized banknotes would not be deposited by the stipulated dates. On November 23rd, 2016, the Attorney General of India told the Supreme Court of India that the government expected that notes worth four to five lakh crores (some $800 billion) would be rendered worthless by not being deposited.
But those who held large quantities of black money seem to have been more resourceful than the government and have found creative ways to launder their money, with the result that most of the estimated black money in circulation has flooded into the banks. Some well-placed friends of the ruling party were allegedly tipped off before Modi’s announcement, leading to suspicions that the well-connected may have had time to dump their black money stocks. Though the Reserve Bank of India has so far refused to release official figures, claiming to a parliamentary panel that they are still counting the old notes received, experts agree that the amount of black money that will eventually be wiped out will fall significantly short of the initial estimates. Indeed, there may be no liability write-off at all.
It has been widely reported that, by the end of December 2016, around 95 to 97 percent of the demonetized notes in circulation had reached the banking system. Indians abroad and the Central banks of Nepal and Bhutan, which keep some of their foreign exchange reserves in Indian currency, hold a part of the remaining notes. The actual value of notes rendered worthless will be known only after June 30th, 2017, which is the deadline for Non-Resident Indians to exchange any demonetized cash that they may hold at specified offices of the RBI.
However, it already appears to be clear that a maximum of only two to 3 percent of the demonetized notes will remain undeposited, unequivocally indicating that the demonetization exercise has failed to achieve its primary objective of cleansing the economy. The RBI Governor has conceded that there is no impact at all of demonetization on the RBI’s balance sheet.
And since corruption seems to be a way of life in India, it will not be long before the old habits of under-invoicing, fake purchase orders and bills, reporting non-existent transactions,and straightforward bribery all generate new black money all over again. The government’s plan is therefore likely to be ineffective beyond the short term, since it does nothing to control the source of black money.
Indeed, in the first six weeks after demonetization, the Income Tax Department announced it had seized ₹5 billion in unaccounted cash from people hoarding currency they could not explain.Strikingly, ₹920 million of their seizure happened to be in brand new ₹2000 notes! Cases of corrupt officials, including bank managers, being caught red-handed in illegal transactions have been reported, all of which involved the new currency. Some bank managers worked from 9 am to 5 pm telling people they had no money, and then from 5 pm to 9 pm gave money through the back door to money launderers for a fee.
Though I am by no means tarnishing all bank mangers for the sins of a few, the fact is that in its drive against corruption the government has created new forms of corruption. Black money clearly continues to be generated—it has merely changed its color and shape. Black money has become white by way of pink! And, of course, ₹2000 notes will take up less space in the briefcases of the corrupt than ₹1000 notes did.
The Prime Minister’s other declared objectives have not been met, either. Demonetization is not a necessary exercise to achieve the objective of thwarting counterfeiting, and the government’s citing of such an aim displays considerable overreach. Media reports confirm that counterfeit bills of our freshly designed currency notes are already in circulation. This could, however, have been prevented by enmeshing strong security features with the design. It seems that the government has missed the opportunity of ensuring the adoption of such security features in the new ₹500 and ₹2000 currency notes that it launched post-demonetization. This indicates a lack of foresight and inadequate planning on the government’s part. There appears to be no special new watermark, no security thread or fiber, no new latent image, and certainly no nano chip, as BJP supporters were boasting on social media!
Will a mere change of color and size render the notes safe? Shockingly, RBI has admitted that three different versions of the ₹500 note have been printed in haste. If all three versions are authentic, one can reasonably assume that this is going to confuse the public and make it easier for counterfeiters to get away with their own fake versions.
B ut still, how big of a problem is this? A study conducted by the Indian Statistical Institute in Kolkata, under the supervision of the National Investigation Agency, estimated that the value of fake Indian currency notes in circulation was about ₹400 crores, which amounted to only roughly 0.03 percent of the withdrawn currency.
It also indicated that the ability of banks to prevent counterfeit notes being deposited was limited, since their machines often fail to identify fake notes and bank tellers—overwhelmed by the pressure of the astronomically high level of deposit activity in the 50-day window period—could not make the manual effort to identify fake notes.
As a result, every indication suggests that several fake currency notes have slipped through into the banking system and become legitimized. Thus, far from hurting counterfeiters, demonetization may have helped legitimize fake currency by having it exchanged, amid the chaos, for new notes.
Prime Minister Modi also cited among his objectives the undermining of terrorist and subversive activities. He even went so far as to say, on December 27th, that “through the note ban, in one stroke, we destroyed the world of terrorism, drug mafia, human trafficking and the underworld.”
But empirical evidence collated from data on terrorist strikes and fatalities from the Global Terrorism database and the South Asian Terrorism portal shows that it is very difficult to establish a causal relationship between the number of terrorist strikes on Indian soil and the absolute levels of currency in circulation. In any case, we are seeing reports of terrorists being caught or killed in Kashmir in possession of large quantities of new notes. So where is the claimed effect on terror financing?
Meanwhile, the goalposts kept shifting: the Reserve Bank of India issued no fewer than a hundred notifications on demonetization—some 138 in 70 days until I stopped counting! Each of these was intended to tweak an earlier announcement. Many are referring to this once-respected institution as the “Reverse Bank of India” for its frequent reversals of stance on such matters as the amounts of money permissible to withdraw, the last legal date for withdrawals, and even whether depositors would have their fingers marked with indelible ink so they could not withdraw their money too often.
Demonetization has caused serious and seemingly lasting damage to India’s fledgling financial institutions, most notably the RBI, which conspicuously failed to exercise its autonomy, to anticipate the problems of Modi’s scheme, prepare its implementation better, and to alleviate its impact. The United Forum of Reserve Bank Officers and Employees wrote to the Government on January 13th, 2017, pointing to “operational mismanagement,” which has “dented RBI’s autonomy and reputation beyond repair.” The inexplicable silence of its governor, Urjit Patel, has reduced him to a lamb. But this “silence of the lamb” is eating India’s citizenry alive.
In one recent change of declared objective, the prime minister and finance minister are now talking about moving India to a “cashless society”—an idea and a phrase that was not mentioned even once in Prime Minister Modi’s original November 8th, 2016, speech. (This was hastily amended to a “less cash” society when the absurdity of the proposition was widely pointed out.) But they seem blissfully unaware of the fact that over 90 percent of retail outlets do not even have a card reader at the point of sale, that half of India’s population is unbanked—India is home to 21 percent of the world’s unbanked adults—and that the overwhelming majority of their nationals still function in a cash economy. In fact, 97 percent of retail transactions in India are conducted in cash or check. Few consumers use digital payments: only 11 percent used debit cards for payments last year. Only 6 percent of Indian merchants accept digital payments. And fewer than 2 percent of Indians have used a mobile phone to receive a payment, compared to over 60 percent of Kenyans and 11 percent of Nigerians.
As columnist T.J.S. George asked: “Are we to assume that daily wage earners, small-time farmers and sundry hawkers who don’t even know what is a bank will be happy to see the country getting rid of cash, rather than vague things like illiteracy and poverty?”
The plain fact is that the digital infrastructure for “cashlessness” simply does not exist in India.The aforementioned Economic Survey acknowledges that digital transactions face significant impediments.
Though the government hopes many will use their mobile phones for cashless payments, the Survey enumerates approximately 350 million people without cellphones (the “digitally excluded”); 350 million with regular “feature” phones, and 250 million with smartphones. A mere 34.8 percent of the country has internet access, and there are around 200 million users of digital payment services. A 2015 World Bank study of bank-account usage and dormancy rates across different regions found that only 15 percent of Indian adults reported using an account to make or receive payments.
In such an environment, a cash scarcity is economically crippling. Moreover, most mobile applications and internet banking websites are largely available in English, a language not understood by a majority of the people.
There are also appalling deficiencies in cyber-security. Ours is a country where cyber-crime flourishes; the government’s drive for cashlessness may be creating new vulnerabilities and new victims. Expecting India to become a “less cash” economy at this point is like removing 86 percent of a person’s blood circulation and then asking him to dance.
Studies confirm that most Indians who use cards use them just to withdraw cash from ATMs; making payments by plastic is still something of a novelty. Multiple stories—which might have been hilarious, if they were not so pathetic—have been told of people patriotically trying to use plastic at the few outlets that do accept cards and being told “the server is down”; of salesmen frantically rushing out onto the street from their shops with card-readers in hand hoping to catch a better signal; and of single transactions taking a dozen minutes because the card-reader keeps breaking down in mid-execution.
India offers some of the slowest broadband speeds in the world, and at least a third of the population has no reliable electricity supplies. It is all reminiscent of Marie Antoinette: “if they do not have cash, let them use plastic!”
The Government seems to be engaged in an exercise to furnish the penthouse of a building whose foundations it has not yet dug. As the Harvard Business Review noted, “India’s digital state (it ranked 42nd out of the 50 countries we studied in our Digital Evolution Index), does not engender the threshold of trust needed for cashlessness to take hold in a meaningful way.”
Worse still, there is a transaction cost involved in each digital payment that is absent in any cash exchange—so using “less cash” actually involves more expenditure for the payer. This obviously affects ordinary citizens who are used to cash, which involves no transaction costs for them. It is also expensive for merchants to adopt digital payments, which affects them adversely. Merchants highlight the high cost of even trying out these machines as a factor that is driving down interest in acceptance of digital payments. “I was thinking of installing a card machine at my store. But the banks asked for a ₹5,000 deposit,” said one merchant in a recent study.
The government is doing nothing to ensure point-of-sale machines are made available to traders, small retail outlets, and small and micro enterprises, free of cost, as I suggested in Parliament, or to remove charges for all cashless transactions.
The financial implications of moving to a “less cash” economy have raised related concerns. Dark suggestions have been made that the real beneficiaries of demonetization are the handful of companies that specialize in digital payments, especially by mobile phone. (Only 2 percent of India’s nearly one billion mobile phone users have ever used their phones to make digital payments; although this figure began shooting up after demonetization.) In addition, digital transactions, by leaving a traceable record, add to the state’s ability to monitor individuals’ expenditures. As former Finance Minister P. Chidambaram asked,
why should a young adult be forced to disclose that she bought lingerie or shoes or he bought liquor or tobacco? Why should a couple be forced to leave a trail of a private holiday? Why should an elderly person leave a record that he bought adult diapers or medicines for his ailments? Why should the government or its numerous agencies have access to our lives through access to Big Data?
These are serious questions that call into account the Government’s insouciant announcement of objectives that were never presented to Parliament for approval until three months later, when the policy was irreversible and the damage had already been done.
Equally serious is the continuing concern about the legality of the government’s action. The entire demonetization exercise had been conducted by the issuance of gazette notification no. 2652 by the Joint Secretary, Finance, under Section 26(2) of the Reserve Bank of India Act of 1934. This provision gives the Union government the limited power to demonetize certain series of the country’s currency through a notification. This provision does not, however, give the government the power to freeze bank accounts through limits on cash withdrawals, disrupt normal banking operations, and impose mandatory disclosure requirements (such as identity cards) while depositing cash into bank accounts or exchanging old notes.
The relevant provision of the aforementioned Act unambiguously states:”(1) Subject to the provisions of sub-section (2), every banknote shall be legal tender at any place in India in payment or on account for the amount expressed therein, and shall be guaranteed by the Central Government.”
This means that the money every Indian holds in her hand or in the bank is a debt guaranteed by the government to her. Currency thus represents a ‘public debt’ owed by the government to the holders of banknotes. “I promise to pay the bearer of this note ...” vows the RBI Governor on every Indian currency note. Every currency note is a contract between the bearer and the state, something that has been signed in good faith and ratified by the prevailing law of the land. The questions that then arise—and have still been left unanswered by the government and the courts—include: Can this contract be repudiated unilaterally by the state? On what legal grounds can the RBI write off notes that it had promised to honor?
And while we are considering the issue of legality, why has the RBI not placed in the public domain the Minutes of the RBI meeting of November 8th, 2016, that was supposed to have requested the prime minister to make the announcement he did? Is it for fear of revealing the real nature of the meeting would only confirm the Bank’s surrender of its autonomy to the government? Only eight out of 21 Directors attended, and four of them were officials. Only four independent Directors were present.
This entire decision-making process was a Government exercise trampling on the autonomy of the RBI, rather than a decision of the institution meant to be in charge of India’s monetary policy.
Among the longer-term effects of this monetary disruption have been unemployment and severe dislocation of India’s informal economy; the collapse of many marginal businesses unable to survive the ongoing loss of income; severe reductions in crop yields and problems pertaining to agricultural credit; and the accelerated flight of investment out of India.
Even more worrying is the prospect of a long-lasting decline in India’s so-far robust economic growth, and the danger that it will push more Indians who were in the process of escaping poverty right back into it.
The burden of demonetization has undoubtedly been regressive, as it has most negatively affected the poor and the unbanked, which have had to lose their daily wages to stand in queues or have lost their jobs because of non-functioning markets; and they are the ones who are expected to transform their financial habits. The truly cashless are the poorest Indians, who depend on cash for their daily survival: as the Harvard Business Review puts it, “this unfortunate crisis is a case study in poor policy and even poorer execution. Unfortunately, it is also the poor that bear the greatest burden.”
While many Modi fans are blaming the implementation rather than his intent, the fiasco was inherent in the design of the policy.
It is clearly a “symbolic” policy—high ambiguity, high conflict, top-down, centralized, and authoritarian. There was no “policy skeleton,” and, worst of all, no cost-benefit analysis, no evidence that alternative policy options were considered. It is clear no impact study was done, judging by the blizzard of new official notifications every day, tweaking and fixing the regulations.
The government has presided over a non-transparent policy environment that seems entirely unconducive to the creation of a cashless society.
This is a manufactured crisis. The government, for no public benefit anyone can understand, has thrown a spanner into the works of the Indian economy. It is an ill-conceived scheme, ill-planned, poorly thought through, badly implemented, and disastrously executed. Demonetization failed in its stated objectives. Deep rooted problems, like corruption or terrorism, are not amenable to blunt, one-off policy instruments. Demonetization was the equivalent of an “anti-stimulus” policy intervention, and the consequent drag on demand has been significant. The government liked to boast of being the world’s fastest-growing major economy; it is a boast it can no longer make, since, thanks to demonetization, it slipped behind China again.
Modi came to power in 2014 promising to boost growth, create jobs for India’s youthful population, and encourage investment.These objectives lie in tatters with his ill-considered demonetization. He abolished the central government’s Planning Commission to signal that the days of top-down statist control of the economy were over, but his demonetization decision has brought back the worst days of government control. His reputation for being an efficient and competent manager is irremediably stained by the implementation disaster. How long it will take for India to recover is anyone’s guess.
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