Demonetization, ‘Financial Inclusion’ and the Great ‘Unbanked’

A Prologue

There is a lot of talk these days about ‘exclusion’ – which is almost unquestioningly assumed to be a bad thing. The corollary to this understanding of exclusion is that all inclusion is necessarily good. One hears a lot about ‘financial inclusion’ these days,  which truth be told, makes me shudder. There is thus a lot of angst expressed these days, especially by the rich and powerful, over the ‘financial exclusion’ of the masses. Here is the basic argument (read the full article, disowned by the edit department, here):

Inclusive growth would mean that all sections of society benefit from economic prosperity. A key metric for inclusion is ‘financial inclusion’ i.e. the access to banking services and affordable financial products such as bank accounts, loans, and deposits for all individuals and businesses. When the poorest of the poor have access to credit and savings facilities, this translates to their financial security. They can grow larger businesses, manage consumption and household expenses better and plan for shocks. The standard of living improves and poverty falls, allowing people to contribute more to the economy as well.

Remember, however, before we proceed:

(i) That in 1997, the Asian financial crisis that wiped out the hard earned life-savings of millions of people, in one fell swoop, was an instance of financial inclusion.

(ii) That it was the banks that were fully responsible for the crises across the USA and Europe, 2008 onward. That the Occupy Wall Street movement was basically a movement against the  robbery of ordinary people’s money saved in banks by the banks, who on top of everything wanted to be bailed out with tax payers’ money.

(iii) That very recently Iceland has had to jail 26 bankers responsible for the 2008 financial crisis, “for crimes ranging from insider trading to fraud, money laundering, misleading markets, breach of duties and lying to the authorities”.

(iv) That one of the major reasons India escaped the worst effects of that crisis was because effectively 70 percent of its population still lies outside the banking and financial sector. Of course, the other important difference with the Western capitalist economies was that India’s banks were still largely in the public sector. In other words, banks do not only do what they and the economists say they do. Banks play with the hard-earned savings of the relatively poor, often simply handing handing them over to predator corporations and then writing off!

The Demonetization Gamble

A lot has already been said by now on the Modi government’s decision to demonetize Rs 500 and Rs 1000 notes. Economists and economic analysts from the Left-wing Prabhat Patnaik to others like  World Bank Chief Economist and former advisor to the Indian government, Kaushik Basu and journalist Swaminathan Aiyar have expressed serious doubts about both the rationale and feasibility of the move.  The point has been effectively made by them and others like Arvind Kejriwal (who have been centrally concerned with the issue of corruption and ‘black money’ for a long time now), that this measure does not touch the real big players in the game of black and unaccounted money. Big corporate sharks don’t need to go the ‘black money’ route because government policy itself is written by them and everything they do is made ‘legal’ either in advance, or retrospectively, because the government is in their pockets. Of course illegal activities even at those high levels often go on nevertheless, because the power-corporate elite has become so used to the idea that nothing really matters in this country – that everything they want is theirs. And in any case, the real big money lies deposited in Swiss banks or in circulation elsewhere, in other forms. Continue reading “Demonetization, ‘Financial Inclusion’ and the Great ‘Unbanked’”

Modi’s Demonetization, Black Money and Surveillance: Baidurya Chakrabarti

Guest post by BAIDURYA CHAKRABARTI

  • The demonetization drive of Modi is neither new in content nor in form. In India, it has been done earlier by Morarji Desai; the initial conversion to Euro in the European Union happened within a month’s span. Currency is routinely taken out of circulation. What is significant about Modi’s demonetization is the amount of sensation he has generated out of an otherwise insignificant move. What is routinely done through phasing out denominations is being done in an extremely abrupt manner. He is dressing up a withdrawal and issuing of currency notes as a revolutionary move, and it is being executed in the manner more suited to currency change. What we need to thus ask ourselves is this: why is a routine monetary policy being enacted in this—which I shall later call ‘terroristic’—manner? Clearly, the answer is not economic; even the government does not pretend it to be a strictly economic issue (when they harp on the ‘terror’ factor).

(But before we move on, an aside. This demonetization exposes how the nostalgia for socialist development has fuelled the rise of Modi. Disenchantment with neoliberalism has produced an obscene amount of nostalgia for the pre-liberalization days among the Indian middle class, especially among the left-leaning ones. However, now that a gesture right out of those hoary days have returned to our world, it turns out to be a nightmare.)

  • Let us state the obvious things first: demonetization will do next to nothing to the so-called ‘black money’, which are routinely converted into fixed assets or foreign currency. This move dis-incentivizes hoarding of cash, but not speculation, all sorts of accounting practices that can produce the so-called ‘black money’ while bypassing the level of cash transaction altogether. Demonetization is simply an old-school, brute-force monetary policy to curb hyperinflation. The Head of European Central Bank in Europe and Larry Summers, US treasury secretary, has proposed demonetization of their high-currency notes this year. But none of them dream of doing it within a notice of 4 hours!

Continue reading “Modi’s Demonetization, Black Money and Surveillance: Baidurya Chakrabarti”

Dalit Uprising and After …

Why Hindutva Would Not Be The Same Again ?

Image result for una struggle

(Photo Courtesy : newsclick.in)

When I was born I was not a child
I was a dream, a dream of revolt
that my mother, oppressed for thousands of years ,
dreamt.
Still it is untouched in my eyes
Covered with wrinkles of thousand years, her face
her eyes, two lakes overflowing with tears
have watered my body…..

– Sahil Parmar*

Well known Gujarati poet Sahil Parmar’s poem ‘When I Was Born’ perhaps reverberates these days in Gujarat when we are witnessing a Dalit Upsurge- a first of its kind at least in that regions history. It will be a talk of folklore for times to come how flogging of dalits in a village in Saurashtra by Hindutva fanatics suddenly erupted into a mass movement of dalits which could catch imagination of the people cutting across different sections of society. An attempt is being made here to understand the dynamics of the movement and its likely impact on the future trajectory of Hindutva.

Continue reading “Dalit Uprising and After …”

Cow Vigilantism as Terror : New Socialist Initiative

Guest Post by  New Socialist Initiative

Can the Saffron Establishment ever wash its hands of the growing menace?

(For Hindi version, click the link http://nsi-delhi.blogspot.in/2016/07/blog-post_26.html)

( Courtesy : Cartoonist Satish Acharya, https://www.facebook.com/cartoonistsatishacharya/)

Cow vigilantism which has received tremendous boost since the ascendance of BJP at the centre got its first fitting reply in Gujarat recently. The way in which a self-proclaimed Gau Rakshak Dal – owing allegiance to Shiv Sena – attacked a group of Dalits in Una (11 th July 2016) who were skinning a dead cow, publicly flogged them, led them to the police station charging them with cow slaughter and even circulated a video of the whole incident on social media to spread further terror, has caused tremendous uproar. Continue reading “Cow Vigilantism as Terror : New Socialist Initiative”

Modiversary – Mera Desh Badal Raha Hai! Really

It was late mid-eighties when we use to do streetplays in Varanasi as part of our activities as a left student group – which called itself ‘Gatividhi Vichar Manch’ in Banaras Hindu University. One such plays was titled Desh ko Aage Badhao. The 5-7 minute play was part of a compilation of many other plays brought out possibly by Jana Natya Manch. We must have done hundreds of shows of the other play Raja Ka Baja – which was about the dire state of education and employment.

The theme of this short play Desh ko Aage Badhao was rather crisp. It showed a Netaji/leader in white clothes telling people gathered around him how the ‘nation is progressing’. When the innocent people ask for details, then he starts listing out his personal achivements and the wealth he has acquired through all these years of ‘serving the masses’. The tagline was Arrey Murkhon, dekho desh kaise aage badh raha hai‘ ( You fools, look how the nation is progressing)

The end scence showed people coming together, getting organised and slowly pushing the Netaji. When the terrified Netaji use to ask Arrey Murkhon, yeh kya kar rahe ho. (What are you doing idiots). The awakened people use to answer in unison Netaji, desh ko aage badha rahe hain ( We are pushing the nation forward).

I was reminded of this short play when TV started showing the ad how the nation is changing and how it is progressing with a tagline Mera Desh Badal Raha Hai, Aage Badh Raha Hai. ( How my nation is changing, and advancing) focussing itself on two years of Modi government at the centre. Continue reading “Modiversary – Mera Desh Badal Raha Hai! Really”

Congratulations on the Completion of Two Years of Government: Reaction of JNU student, Bihu Chamadia

Guest Post by BIHU CHAMADIA

Congratulations on the completion of two years of government. But I just want to ask a simple one line question. Completion of two years but at what cost? At the cost of increase in the number of farmer suicides, at the cost of creating war-like situations in educational institutions, at the cost of acting as a catalyst of widening the gap between hindu-muslim, at the cost of increasing imports and decreasing exports. Celebration on such a large scale because of course it is the first ever government in the history of the world to complete 2 years of governance ! With on-going crisis in the country BJP spends 1000 crores on a programme for this celebration. We would have no problem if this money was yours but sadly it’s not its ours. So now to all the tax payers who had problem with JNU raising its voice I ask you have you people become blind and deaf or are suffering from amnesia and forgot how to read and write.

Well, you speak well Mr Modi but the problem is that you only speak. You and your whole cabinet knows that each and every student of these educational institutes can give you people a befitting reply to all your one liners but we choose not to. People laugh at what your ministers says and say what a fool but I have a completely opposite view. You people are not fool you people are smart, very smart indeed.  Your every policy and every one liner can have a nice reply. Continue reading “Congratulations on the Completion of Two Years of Government: Reaction of JNU student, Bihu Chamadia”

Degrees of Self-Deception: Rama Srinivasan

Guest post by RAMA SRINIVASAN

Modi and his double, image courtesy, IndiaTV news
Modi and his double, image courtesy, IndiaTV news

As the crisis of fake degrees blows over I want to be the one to ask the naïve question: Why would Narendra Modi lie? I know it is a naïve question because lies are the most banal political strategy ever. There is a man in US today who repeatedly states that he will make the Mexican government pay for a beautiful, great wall on the border of US and Mexico and people believe him with a degree of sincerity that is frightening. In 2014, at least 31 percent of eligible Indian voters believed in Modi’s promises of development and some of them still do. There may be some who, at the end of the five years, actually believe that Modi has delivered on those promises. But such lies are different. My question is simply: why would he lie on an affidavit which functions as a legally-binding oath?

In his previous election affidavit filed for 2012 Gujarat elections he had left the spouse’s name column empty but following ‘strict legal advice’ he agreed to mention his wife’s name on the affidavit filed for Lok Sabha elections. Technically he had withheld information in previous affidavits which amounts to a legal offence since he had not filed his papers to ‘the best of his knowledge’ but this is not the same as actively lying as it now turns out could be the case with his educational qualifications. Legal experts will determine what is tantamount to punishable crime but if Modi did have legal counsel, who advised him to “come clean on the marriage” as this Times of India article states, why would he continue to provide inaccurate information on other aspects of life?

One speculative answer could be that he knew he was being closely watched as he made his bid for the PM’s post and that his papers would be scrutinised and compared with previous drafts. So it made sense to remain consistent with some of the information even though he had obviously been cornered on the question of his marital status. And yet, as the story of how Modi came to acknowledge the existence of his wife Jashodaben proves, if he had to reveal inconsistencies in previous records, 2014 would have been the best time to do this. No amount of exposés could have hurt the man at that time – his bhakt army, on and offline, on Twitter, were efficiently managing the show and could provide a useful media spin/misdirection to take the focus away from the affidavit that declared to the world that Jashodaben’s repeated claims regarding her marriage and abandonment were not unfounded. Even as the Gujarat Congress urged the state Election Commission, unsuccessfully, to reject his application on the grounds that he had not provided information regarding his spouse’s assets or PAN card number, Modi cruised to victory since his deliberate inconsistencies seem to matter very little to voters.

At that point Modi, indeed, seemed invincible. He was giving explosive speeches and deftly avoiding uncomfortable questions from journalists. In an interview with Rajdeep Sardesai, Modi replied to an indirect question on 2002 with this classic deflection tactic: “My best wishes are with you, Rajdeep Sardesai. You have been living off this issue for the last 10 years … I have heard that those who curse Modi get Rajya Sabha seats or Padma awards. So you have my best wishes to continue this campaign (against Modi) and reach Rajya Sabha or win Padma awards with help of your friends.” What was apparent in the interview is now widely acknowledged as the process of constructing a larger-than-life image, where the man referred to himself in third person. Continue reading “Degrees of Self-Deception: Rama Srinivasan”