Sunday, 27 November 2016

An Open Letter to Dr. Manmohan Singh on Demonetization Debate

Dear Dr.Singh,
I, as a common man of this nation, have the highest regard for you as an economic expert and for your contribution towards liberalization of the nation’s economy as Finance Minister. During your long career when you wore many hats – from Professor to RBI Governor and from Dy. Chairman of Planning Commission to Union Finance Minister – you had earned respect for your acumen and revolutionary steps to change the economic landscape of this nation. Till then this nation saw your technocrat side rather than the political side and even your ideological adversaries - be it in the field of Finance or Politics - had to hold you in high esteem for your personal & profession integrity and apolitical work in the nation’s interest. Finally you became Prime Minister for 10 long years. However, watching you speak in the Rajya Sabha a few days back, I felt that your political compulsions interfered with your honest assessment of the Demonetization as an economic expert.

Probably, this same compulsion pushed the technocrat in you to the background making your 10 years as Prime Minister – the worst in terms of corruption and scam in our nation’s history. It was during your Prime Ministership that we saw CWG scam, 2G spectrum scam, Coal block allocation scam, AgustaWestland helicopter scam, Tatra truck scam, Antrix Devas scam, Cash-for-Vote scam, Adarsh Housing Society scam, Banking sector scam etc. And these were just a handful among many more such blatant plunder of the nation’s resources and tax payer’s money. Obeying your political master Sonia Gandhi’s command & digesting insults at the hands of her worthless spoilt brat Rahul Gandhi - you had only watched helplessly as the economy & the government machinery of the country disintegrated right before your eyes. You had even justified the monumental loot of the nation, saying it was coalition dharma. What action did you take to curb black money? In spite of serious criticism by the Supreme Court of India, your Govt. was so unrelenting & remorseless that it even refused to establish a Special Investigation Team (SIT) to investigate black money.

During your 7 minutes speech in Rajya Sabha, you had used a few words/phrases like, "monumental mismanagement, organised loot, legalised plunder and In the long run all of us are dead" etc. to describe the Demonetization process of the present Govt and I would attempt to answer you on behalf of the common men of India on each of the points you had raised against Demonetization.

It’s a no brainer that Prime Minister Modi with this single stroke of demonetization has destroyed the base of corruption in India built over several decades. With this single move, the current Govt has made a serious attempt for the first time ever to tackle all the three aspects of black money affecting the economy i.e. a parallel cash economy, counterfeit currency and terror financing.

The demonetization decision was not taken without thorough and systematic planning to curb black money. This is evident from the fact that in the first ever Cabinet meeting of the Modi Govt, decision to form the SIT to investigate black money was cleared which was till then kept in cold storage under your Govt. Tax treaties were renegotiated and signed with various foreign Govts to collect information on suspected persons, their bank accounts and transactions in tax heavens around the world. This made it much harder to hide cash abroad as well as round tripping of funds to India. As per various monitoring agencies around the world, this led to drying up of outflow of black money from India and created fear in the hearts of people who had such money stacked in accounts and other investments in tax heavens & elsewhere. Then the Black Money (Undisclosed Foreign Income & Assets) and Imposition of Tax Act, 2015 was introduced to bring back black money stashed abroad and its compliance window ended on 30 Sept’15. This act also had various stringent provisions for penalty and prosecution of foreign black money holder’s unearthed during future investigation by the tax dept. Govt also made it mandatory effective January’16, to quote PAN for all sale & purchase of goods & services above Rs.2 lakh in a bid to curb black money. This move brought all high-value household purchases like high-end electronic gadgets, foreign holiday packages, luxury items like expensive watches & gold jewellery purchases under the lens of the tax dept. After that, this Govt's black money declaration scheme received a record Rs. 65,250 cr in the IDS during the 4 months window that closed in October’16. PM Modi publicly declared that this was the last & final opportunity for tax evaders to come clean in the eyes of law. Simultaneously, this Govt opened more than 25.5 crore Jan-Dhan accounts for people from the lower strata of the economic pyramid & working in the unorganized sector and nearly 20 crore "Rupay" debit cards were issued to people who were out of the formal banking system of the country. All these steps were directed towards promoting greater financial transparency and more accounted transaction in India. So, the demonetisation scheme forms a major part of this series and clearly not a decision taken in haste to curb the menace of black money. PM Modi has also announced that he would not stop here and after 30th Dec’16, many more strong & effective measures will be taken to eliminate this menace, “Benami Property” being his next target. While it’s correct that there have been long queues and disruptions of economic activities in the short term, neither the bonafide intent nor the execution by Govt can be questioned as no one in this world has any experience or expertise of such a humongous exercise. Many of the problems seen today could never have been anticipated and a few which were anticipated could not have been mitigated by taking advanced action as the surprise element would have been lost for sure. It is the surprise element, due to which this demonetisation exercise is set to yield phenomenal results. PM Modi has rightly said that majority of the heart burn is from those who didn’t get enough time or notice to hide or convert their black money as well as black deeds. During your tenure of 10 years, you never dared to even take 1/10th of the above steps to curb black money and had you acted that little probably demonetization would not have been reqd now. So, for you to call demonetization a “monumental mismanagement” is insane.

And who knows better than you, what is “Organised loot & Legalized Plunder”? It is your party’s rule for 60+ years which brought our nation to such a pathetic state and reached pinnacle under your Prime Ministership. We common men are suffering today due to your mis governance and wrong doings. Such comments do not behove a man who allowed organised loot & legalized plunder of public money at monumental scale for 10 years. While PM Modi has carried out a “surgical strike” on black money amassed by the corrupt politicians & economic criminals and declared those as “Toilet Paper”, you never had even the guts & the spine to stand up to the nefarious designs of some members of your party & cabinet even as they were plundering our exchequer under the patronage of your high command.

Dr. Singh, as per your claim, some 70 people allegedly died while exchanging currency notes/withdrawing money, but you never bothered about the lakhs of people who died due to not having currency notes during your rule. Also, when you were the Finance Minister in 1992, you were a silent spectator to the stock market scam from Harshad Mehta. The stocks crashed and many innocent people including retired persons lost all their life’s saving, many 100s died of stroke or committed suicide. But none was compensated. Where were your sympathy then for those dead? He who winks at crime is no better than the criminal committing it. Yes, the common men have been inconvenienced by Modi Govt's demonetisation of the high-value currency notes and face a period of hardship but unlike during your regime, now they don't have to cope with double-digit inflation that halved their meagre income and are not cheated of their hard-earned money through elaborate scams.

You had talked about Keynesian theory that “in the long run all of us are dead”. But by saying the above, you actually contradicted your biggest achievement - had you not taken the “long run” into consideration, no economic reform of 1992 would have been possible. Yes, we are all dead in the long run but that doesn’t justify a Govt. not doing enough for our future generations. We surely will be dead in the long run but this nation will still be alive. And our future generation will hold us responsible for not doing our duty to give them a clean, corruption free, progressive and developed India. India of today’s generation required demonetisation because Dr. Singh, as Prime Minister you had failed to implement the Keynes theory. And neither could you control the side-effects of corruption, nepotism and misuse of public spending. Just accept honestly Dr. Singh, that you had your chances but you botched it up.

We the common men of this nation, are amazed at the logic and arguments your party and alliance partners are putting forward. Since, PM Modi won the 2014 elections, all of you were daring him to act against black money as he had promised during his campaign. You all had even accused him of “jumla baazi” and being hand in glove with the black money hoarders. When he launched the Jan Dhan Yojna accounts, you had ridiculed him for wasting effort and investment in unnecessary actions and pointed to the low deposit in those accounts. When he announced voluntary disclosure schemes for declaring black money, you had taunted him by assuring low response and failure. When he raided black money hoarders, you had accused him of Tax Terrorism. But when Demonetization happened, suddenly you remembered those poor people who don’t have a bank account and may face inconvenience while exchanging/withdrawing hard earned money? And your party, whose 60+ years of socialistic pattern of license-permit raj, which made a virtue of standing in queues - from ration to kerosene/gas, phone/electricity connection to train/bus tickets, Hospital treatment to birth/death certificates, seeds/fertilizer to trade license – suddenly realized that that queues are the worst form of oppression in this nation?

The problem of Black money or rather the parallel economy created over 60+ years of mainly Congress rule, can't be solved so easily. It needs some innovative, drastic and disruptive measures. PM Modi has dared to do that. He has attempted to clean the muck, make the economy robust and establish confidence of the people in the system. Any disruptive solution will have a bit of inconvenience. Those, whose rule was hall mark of “organised loot, legalized plunder and monumental mismanagement” are the least qualified to talk on this subject. You had failed to pick the right person for the right job in your ministry without political consideration and even failed to control your fellow ministers. The money that was looted during your rule is enough to rectify all the downside you are pointing out about the demonetisation process. Had you exercised enough check and balance during your tenure, we wouldn't have required this extreme step by PM Modi. Over 80% of the citizens suffering short term inconvenience today are supporting the demonetization process as they see a better tomorrow with revolutionary transformation. If you had expressed these words/phrases, atleast 3 years back also it would have been a worthy assessment of your Govt.

We have been listening to only complains from the opposition parties since the demonetization process has been initiated. But till now nobody has been able to give a convincing reply on the evils of this process. Only short term inconvenience to people, cash crunch etc. has been highlighted as the main issues. Can't the opposition see the positive aspect of the move? The huge deposits of cash in banks due to demonetization will increase liquidity with banks and supply of money in the market will increase leading to interest rates coming down, which will promote investment in the country. As the investment increases, production of goods and services will rise, leading to increase in employment and thereby income of the people. As the disposable income of people increases, consumption of the goods and services will increase, which will ultimately increase GDP of the country. This current process will also lead to more tax collection for the Govt leading to development of infrastructure. Govt will also be able to spend the additional money unearthed by way of demonetisation (between Rs.3 lakh crore to Rs. 4.5 lakh crore) on social services like affordable housing, education and health care etc. Can’t they see the black money stashed for years been made valueless overnight, counterfeit and terror funding crushed? My sincere apologies Dr.Singh, but we the common men of this nation never expected such bogus allegations and baseless statement from an erudite scholar and experienced technocrat like you. You should have given good suggestions to tide over the present situation rather than making common cause with the corrupt, criminal and anti-national brigade of politicians, journalists and intellectuals who have baked their bread by plundering this nation for long. This nation requires your knowledge and expertise in the development & growth of the nation & its common men and not for the development of your party/alliance or its leaders, who have no emotion for our progress. Can this nation expect this much from an economic expert like you Dr Singh or are we asking for too much? Please be sensible to our national interest atleast at the twilight of your long illustrious career which was marred by self-goal in the 10 years of your Prime Ministership. Only then history will be kind to you Dr. Singh.

With best regards,
A Common Man