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Was the demonetisation a success or failure? Various government claims and the subsequent lacklustre results leave no doubt that the demonetisation has resulted in no significant utility to the nation and caused considerable damage.

 

Demonetization
success or failure?

8th November 2016 - 86% of Indian currency was wiped overnight

The Claims

Minor inconvenience

Black money would be destroyed

Initial news of massive raids. Political opponents targeted. News of currency seized from various people. Widespread understanding among critics and supporters alike that the objective was to strangle cash flows (legal or otherwise) of political opponents during the upcoming election campaign in Uttar Pradesh.

ISI fake currency thwarted

Fake currency notes would lose value when the notes it copied were illegitimate

Widely criticized through various versions of "amputating a leg to lose weight" or "bombing a city to kill criminals in it", this was an irrational goal to begin with, to go through an exercise of this magnitude, expense and cost to economy to flush out a relatively minor number of notes that would at best lose value they didn't have to begin with.

Prevent counterfeiting

The new notes would have special security features to prevent counterfeiting

Initial reports in media suggested that the new notes would have special features that prevented counterfeiting them. At the very least, having to imitiate a new design would slow the counterfeiters down and reduce the amount of fake currency in circulation.

Various reports in a pliant news media even took claims of special GPS chips embedded in notes and discussed them seriously, creating a perception among the masses that the new notes would be extraordinarily resistant to misuse or imitation.

Tax Collection would increase

Almost 25% increase in tax collection has been unquestioningly gushed over by a pliant media. This increase in tax collection has been attributed to demonetisation.

The Reality

Massive disruption

Unclear how much black money was recovered

Having cash in itself is not illegal, unless it is established that the cash would not be accounted for while paying taxes. Seizing it without evidence of wrongdoing probably is, but the government legally created impunity for tax officials, who are no longer required to explain their actions to anyone..

Fake currency made legitimate!!!

The reckless demonetisation did not allow for examining notes

The relentless crowds and high stress environment at banks did not allow for adequate examination of notes deposited and the overall understanding is that a large number of fake notes got deposited and converted into real money in accounts or converted to new currency - in effect robbing the country far worse than them being in circulation.

Easier counterfeiting

The new notes had no special features that prevented counterfeiting

The new notes are of poor quality and apparently easier to counterfeit. Various leaders and affiliates of the ruling party have been caught with counterfeited notes and the equipment to make more. The trust in the notes is very low and "even the real notes look fake". Hurried printing has resulted in real notes not having all features they should have.

Among early news of counterfeiting included school children who had photocopied a Rs.2000 note and used it to dupe a sweets shop owner when they purchased treats using it.

There has been no change

Tax collection has been increasing year on year for a long time now, and if you look at the trend over the years, this year's increase in collection fits the curve.


The country would profit

Unreturned money would be money taken away from criminals

82% of the money demonetised was rapidly returned to the banks about a fortnight before the last date to deposit demonetised notes, and the crowds continued unabated way after the RBI stopped updating figures on money returned. It has been over 7 months now and they still have not given out the final figures related with demonetisation, .

RBI would transfer profits to the government

RBI transferred Rs 30,659 crore as surplus to govt. This is lower than the Rs 65,876 crore last year - less than even half the amount. The budget has assumed Rs 75,000 crore would come from RBI and PSBs.

Not just is the windfall absent, the government has not even been able to reach half the amount of the previous year.

The windfall from demonetisation would fund welfare

In addition to the losses made by the government, the citizens have made losses - from disruption and decimation of livelihoods to time taken off daily wage work and expenses.

There will be no benefit/compensation to them. Likely, a reduction of existing benefits will happen due to the lack of funds this "minor inconvenience" will cause.

Yep, demonetisation has been every bit of the clusterfuck it had been predicted to be, and we are not even close to recovering from the damage done.

No plans to lodge FIR against suspended MMRDA officials A K Pahal a habitual offender

Mumbai
Even after flouting norms by issuing fake work experience certificates to help a private contractor bag a contract worth Rs 70 crore, the Mumbai Metropolitan Region Development Authority has no plans to lodge a First Information Report against its engineers that were recently suspended. The engineers, A K Pahal and P K Veni, were suspended for forgery a fortnight ago.
According to the probe report, the suspended engineers had helped contractor, NA construction, by giving fake certificates to bag a storm water drain project in Haryana. The authority is currently probing into the matter on its departmental level. Officials said that all of the certificates issued by the suspended engineers will also be scrutinised in order to ascertain their involvement in other projects.
Interestingly, both the engineers have accepted their involvement in the forgery act. A senior MMRDA official on conditions of anonymity told the Free Press Journal, “We are conducting a departmental inquiry and will take further action on basis of the conclusion of the inquiry report. We are not planning to lodge an FIR but the officials will be thrown out of service.”
Activist Sulaiman Bhimani, who has filed numerous complaints of corruption against A K Pahal, alleged that Pahal used NA constructions as a proxy contractor for his son. He said, “This tender process was just an eyewash as the actual person who was supposed to carry out the project work was Pahal’s son. He had also attended the pre-bid meeting. Moreover, Veni is junior to Pahal and have signed the certificates on the latter’s orders.” Bhimani added that Haryana, where the storm water project was supposed to be carried out, is the home town of Pahal.
“I fail to understand the authority's denial in filing a police complaint and is still conducting a department inquiry despite of the fact that the engineers have already pleaded guilty,” Bhimani added.⁠⁠⁠⁠

Sagar Pillai Reporter of Free Press Journal 

POSTED IN PUBLIC INTEREST BY
Sulaiman Bhimani 
9323642081 
sulaimanbhimani11@gmail.com