PRIME MINISTER MODI’S MIDNIGHT MANTRA

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ig(Note: CCV's Isaac Gomes shares first-hand the impact of Prime Minister Narendra Modi's sudden announcement to demonetise 500 and1000 rupee notes with effect from the midnight of 8th November 2016)

 

Does India’s Prime Minister Narendra Modi believe in astrology? For invariably all his Government’s decisions which impact common citizen’s life, were made effective from midnight – whether it was petrol and diesel hike/reduction, domestic LPG hike or his surprise announcement that 500 and 1000-rupees notes will be discontinued and declared illegal starting Tuesday 8th November midnight.

A Press Release by the Ministry of Finance,  Department of Economic Affairs read : “With a view to curbing financing of terrorism through the proceeds of Fake Indian Currency Notes (FICN) and use of such funds for subversive activities such as espionage, smuggling of arms, drugs and other contrabands into India, and for eliminating Black Money which casts a long shadow of parallel economy on our real economy, it has been decided to cancel the legal tender of the High Value Denomination of bank notes of Rs 500 and Rs 1000 denominations issued by RBI till now. This will take effect from the expiry of the 8th November 2016.”

2.  FICN in circulation inthese denominations are comparatively larger as compared to those in other denominations. For a common person, the fake notes look similar to genuine notes. Use of FICN facilitates financing of terrorism and drug trafficking. Use of high denomination notes for storage of unaccounted wealth has been evident from cash recoveries made by law enforcement agencies from time to time.  High denomination notes are known to facilitate generation of black money.  In this connection, it may be noted that while the total number of notes in circulation rose by 40% between 2011 and 2016, the increase in number of notes of Rs 500/- denomination was 76% and for Rs 1,000/-   denomination was 109%during this period. New Series bank notes of Rs 500/- and Rs 2,000/- denominations will be introduced for circulation from 10th November , 2016. Infusion of Rs 2,000/- bank notes will be monitored and regulated by RBI.  Introduction of new series of bank notes which will be distinctly different from the current ones in terms of look, size and colour has been planned.

The Press Release goes up to point 6.  For full details, please refer to the Finance Ministry website (http://finmin.nic.in/). Further details including Frequently Asked Questions (FAQs) are available on the RBI website (https://www.rbi.org.in/). 

Zapped by the sudden announcement of NAMO, people scurried out of their homes on 8th night and went from one ATM to another to get 100-rupee notes.  Most of them stood in long queues but in vain as they did not get the sought-after 100-rupee notes. Many shopkeepers, eateries and medicine srahul759hops refused to take Rs 500 or 1000 notes even before the midnight deadline.  Their excuse: they did not have adequate change.  This sudden decision of the Government hit Kolkatans and those in other cities really hard as people faced great inconvenience in buying milk, vegetables, medicines and other daily essentials and in commuting in auto-rickshaws and taxis. Many shops and markets in Kolkata were closed. Modi’s detractors termed his decision devastating on the common man – much more than the impact of Indian army’s surgical strike on Pakistan’s terror camps.  Mamata Banerjee minced no words and termed it “Draconian”.  Congress vice-president Rahul Gandhi tweeted: “Once again Mr Modi shows hw little he cares abt ordinary ppl of this country-farmers, small shopkeepers, housewives-all thrown into utter chaos.” He followed it with: “While the real culprits sit tight on their black money stashed away abroad or in bullion/ real estate. Well done Mr Modi.” 

Though the Government announced that Petrol and Diesel gas stations of PSUs, Government Hospitals and Government Pharmacies, government buses, railway and air booking counters, consumer co-operative stores authorised by state or central government, milk booths authorised by state government, crematoria and burial grounds and  international airports would continue accepting these notes from 9th to 11th November, news channels showed that Howrah station railway booking counters, many nursing homes, chemists shops and even Kolkata Muncipal Corporation Tax Department had declined to  accept these notes. 

Modi also had several towering backers. Terming the decision to demonetise Rs 500 and Rs 1,000 currency notes as a “master stroke”, Infosys founder and Chairman Emeritus N.R. Narayana Murthy on Wednesday said the move would address issues like black money and corruption and also help the economy become more digital.

Soli Sorabjee, former Attorney General of India, told PTI "It's a bold innovative move and honest tax payers have nothing to worry about. Though there may be initial discomfort and inconvenience which should be borne in the larger interest of the society and the nation,"

On 8th November 11.00 night when I was checking out at the ATMs for Rs 100 notes, without any success, one youth had a brainwave and advised me to meet my parish priest next morning and request him for small change, out of his Sunday Collection! 

 

 

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