No Punches Pulled: No escaping collective decision-making in a nation beset with problems

Out on a morning walk in Lodi Garden, the senior UPA minister seemed to be in a  good mood. It was not hard to guess the reason for his early morning cheerfulness. The previous night the RBI numbers had nixed the high-fluting talk that had emanated from government leaders in the wake of demonetiSation last November. 

If the critics were to call it hot air after the detailed statistics put out by the central bank, it wouldn’t be unfair.  

Finding yours truly approaching from the opposite direction, the Congress leader could not contain his I-told-you-so moment of self-vindication, “ So, virtually the entire money has come back… hardly any  black money detected.” 

Before he could finish gloating, he was taken aback by the reaction: “ This only confirms that we are beyond redemption… Corruption, fraud, cheating is in our DNA… and we will fail anything  aimed at making honest citizens of us Indians…”  

Yes, that to my mind is the reason why the demonetisation has not yielded anywhere near the Rs. Three lakh crore-plus bonanza expected by the Government. 

A little over Rs. 16,000 crores in neutralised currency is chicken feed, especially when at a  conservative estimate the size of the parallel economy is said to be close to 30 percent. The fact that ninety-nine percent of high-value notes were deposited for conversion into valid currency underlines the point that we are good at gaming the system, any system. 

Haven’t we frustrated a long series of amnesty schemes for converting black into white that was launched by successive governments? Who cares seems to be the reasoning, soon there will be another such amnesty, let us carry on unbothered by the fear of taxmen who are known to be as venal as the rest of the society, isn’t it? 

The truth is that the same system which helps us generate black money eventually helps us to get round the occasional scheme targeting the possession of black money. Bankers and taxmen had a field day helping the rich overcome the pain of notebandi.  

The cancer of corruption being so widespread, so deep-rooted in our body politick that we can survive, nay, thrive under the severest surgical strike against illicit money. Our living creed is Hum Nahin Sudhargey. 

Whether anyone likes it or not, the truth is that after the initial panic, circulation of black money in real estate, trade, industry, etc., is again visible to the naked eye, though the scale is somewhat muted. For proof, you do not have to go far. Ask your neighbourhood property dealer. Or visit Nehru Place for a computer peripheral.  

The Government has taken a number of steps to clean up the system, even risking the wrath of its traditional constituency. But thus far success has been partial. The latest and biggest reform in this direction is  GST and the anti-bankruptcy regulatory code. However, it is surprising that sections of the organised business are already bypassing the new tax regime by devising new stratagems ever. 

Inherent problems in inducting large sections of trade and industry, especially in the informal sectors of the economy, into the tax regime have not been clearly resolved yet, causing hardships to even those businesses which might otherwise want to go legit. 

Anyway, back to the postmortem of notebandi. Of course, it was not a complete failure. Insofar as it meshed into the entire gamut of efforts aimed at cleaning up the system, on balance it would have a positive impact. Should even half of the nearly Rs. Four lakh crores deposited in some 1.5 lakhs new bank accounts turn out to be black after due scrutiny demonetisation would have at least paid for itself. 

Otherwise, the costs in lost man-days, disruption in the rural economy, higher payments by the RBI to banks for the surge in cash deposits, avoidable costs of printing new notes, and a much-reduced dividend for the government from the central bank, etc. are all tot up on the debit side. 

The Prime Minister in his zeal to dazzle the political class, in his overconfidence tends to take decisions which eventually fail to yield the intended objectives. Early on, he undertook, unilaterally, mind you,  to change the land acquisition law, no doubt a highly flawed piece of legislation enacted by a stressed and distressed UPA in its dying months, and came to grief. 

Despite repeated ordinances, he beat retreat in the face of vicious Opposition onslaught that the move was anti-farmer. The objective was laudable, but the way chosen to balance the one-sided law lacked political consensus. The demonetization bomb too was exploded unilaterally without Modi taking into confidence economic experts and without first thinking through the entire gamut of problems arising from the junking of 86 percent of the notes in circulation. The foremost lesson in pursuing a collegial decision-making is obvious.  
                   

Playing to the gallery  --- and chickening out  

We were  grateful to Judge S S Saron of the Punjab and Haryana High Court for letting us know that Narendra Modi is the “ Prime Minister of India, not BJP” and Manohar Lal Khattar is “ the Chief Minister of Haryana, not BJP.” Our only complaint is that two days later Justice Saron tried to disown those telling remarks which had got wider play in the national media. Why did his Lordship feel obliged to make light of the sharpness of the comment, why this belated mea culpa? His tautological excess contained a rebuke for Modi and Khattar that they jeopardised national interest for the sake of the party. The court was hearing a PIL on the law and order situation in Haryana following the conviction of    Gurmeet Ram Rahim Singh for rape. 

If you go by the buzz in the legal circles, Justice Saron was keen to make the best of opportunity afforded by the grand gesture of the Chief Justice of the High Court,  Shiavax Jal Vazifdar,  who  graciously took leave only so Judge Saron could retire with the satisfaction of having been  the Acting Chief Justice in his last couple of days in service. 

And without making a splash, without showing off with that headline-grabbing comment he would not have attracted notice to himself. 

Frankly, the higher judiciary is teeming with not-so-successful lawyers who upon becoming judges come to suffer from the illusion that they are the masters of all that they survey, often trying to play god. Not long ago, an apex court judge, who post-retirement treats a cricket body as his private fiefdom, had lamented in an open court whether it was curtains for the secular republic. Networking through the minority community to which he belongs had served his cause well, but he did not have to display his prejudice in a such an un-judicial fashion, did he?    
 

New notes, old fears 

Currency notes of Rs. 200- denomination is already in the market. Soon these will be freely available. Also,  50-rupee notes with a new design have been introduced. The central bank has also undertaken to print the new Rs.1,000 notes, which were withdrawn following demonetization.

Once the new Rs.1,000 notes are in circulation speculation about the withdrawal of the Rs.2,000 notes which were introduced following notebandi will be hard to quell. Despite an official denial that there was no such move, ordinary people suspect that the Modi Government will yet again launch a `surgical strike’ against black money by banning the  2,000-rupee notes. The Rs.2,000- notes now account for nearly sixty percent of the total money in circulation while new Rs. 500 notes are about half of the total money supply.

Meanwhile, a hilarious video likening the colours of the new currency notes to Modi’s waist--jackets is doing the rounds on the social media.