Modi’s 500/1000 move may have sent him to stratosphere; but he has to be more convincing

 

I have a slightly negative view on the likely impact of demonetisation more especially the proportion of people who have to undergo the pain for catching a few (may be less than 1%) errants. In many cases the Govt may also know who those politicians/individuals are. So spoke to several people (besides several corporate types during the course of meetings) to gauge the mood; lucky I have not gotten beaten up yet.

First a Kaamwali (she wasn’t all that specific except that mentioned that she has just got Diwali bonus), a Receptionist in Mumbai at one the largest cement firms (she was inconvenienced but said that she supported Modi since it is required for the nation), an Old and frail Tamilian lady who needed some help with Kiosk check in, and my driver for the day. He with a bit of glee and satisfaction said “I had only Rs 3000 which I will exchange”. “Is it required? Do you support it?”. “Yes He has fixed all those **** (reference to some community). They have been asking for it, crooks. They were hoarding so much black money”.

A slightly serious looking Security staff who frisks you at Airport at CS in Mumbai.  When I opened the topic he was cross with me and put his finger on his lips to ask me to shut up. I trailed off with Modi’s name. His outlook took an about turn and asked in utter curiousness ‘Kya Kya Kya?’

I said Rs 500/1000. … he: yes yes. Me : Do u support it. Him: Yes sir.

Me: Why? Aren’t you inconvenienced?’

Him: ‘Yes sir. But that’s little’.

Me: So you can bear it.

Him: There is Hope sir now. I will bear it. His mouth was quivering. I was expecting an English response I was not prepared for an emotional response. I just patted him and said “great man Keep it up” and moved on.

 

2 jet pilots flying off duty. “Sir I can hope to buy a house now. They used to be asking so much cash… where will i go for that kind of cash. We support it”.

My next victim was a 5th std Master Kavya studying  in Singapore Public School in Dahisar seated next to me. Slightly on the studious side but very eloquent and fluent for his age. I took his mothers permission to talk to him for a few minutes.

He would have liked Clinton to come back, since she would have succeeded Obama who is a great friend of Modi. He likes Modi because he is the one to start Swatch Bharat which will clean up India.  They debated the effect of Rs500/1000 in the school.  The teacher briefed them on what ‘black money’ is. They had concluded that black money is not a fair system that some people bear and some people go free, it is cheating. He said that his parents would be greatly inconvenienced but still he supported Modi wholeheartedly.  ‘Its required for the Nation’. Views were erudite but he made his point in a manner befitting his age.

 

I was zipping thru most of Delhi and India Gate at 9.45 which was deserted like someone had announced that a nuclear bomb is going to be dropped there in an hour’s time. ‘Aaj Kya hai?’ I asked the Mega cab driver. ‘Logoan ke pass paise nahi hai’ he refrained. I thought I had at last found an ally and started a conversation. But he was more than a fan of Modi; he almost looked an appendage to him. Next 15 minutes he gave me a lecture on how Modi is good and how what he does is good and how it will benefit in the long run. I had no choice as his captive audience.

 

With 6 -7 others also, Modi seem to have scored a perfect 10 with this move – somewhat surprising for a debative society…he has managed to whip up a frenzy to ecstasy in support of his action. ‘Sock those Black Money B***ds’ seems to be the mood.

 

I did not expect such a one sided view from lower /middle income people.  So when I write this piece i know I’m in a minority. But still i present my sour grapes.

 

And Now the Sour Grape

Someone asked Deng Xio Ping the architect of Chinese reforms, on the 200th anniversary of French Revolution as to what its impact on Democracy was? He replied, ‘Too Early to Tell’. My instinctive reaction is to reserve my judgment on this recent chest thumping by Modi fans on his recent salvo (Mandatory Disclosure : I am a Modi fan myself, except i want to temporarily suspend that status on this issue till i get convinced on the benefits of his recent action).

What has been done is bold, no doubt. His speech was more patriotic, but it needed to be convincing more than being patriotic is my opinion. He could have told the nation on how much Black money he thinks is in circulation, how much the Government aims to garner thru this action, how much Taxes the Govt hopes to get as a one-time measure and how much on a running long term basis,  how much additional growth its going to create.

Most of all how am I as an individual going to benefit for the pains imposed on me – at least in qualitative terms. I have not earned a penny with tax dodge – rather I am yet to get so many I Tax  refunds (petty though) from the Govt since 1995-96. This is a pure compliance measure; so to impute any sense of patriotism is unwarranted, i reckon.

Half way into Modi’s term, i am far less convinced about his (or rather his cabinet’s) ability to deliver on the one most important thing – growth and with it employment for the rural, youth, newly graduating. I don’t think there is even a plot or story line leave alone a convincing plan. So i am not willing to be mesmerised by side shows, however impressive. If MMS was lack of action, Modi’s cabinet seems to be lack of ideas. Growth seems to be in an anaesthetic state. Just excessive focus on a few things  alone is not enough to run the country. And he hasn’t addressed the core issues causing black money – unreasonable stamp duties and Capital gains taxes alongwith election funding… in that sense the monster will sure take rebirth and start from zero again

When some Isreali said that even they would have been proud of India’s surgical strike, sure my chest went up 560 inches. Sure he is doing a great job of whatever he is doing; but then is he doing what all needs to be done?

While resolving strictly to comply with the rules, i am tempted to suggest the following actions:

Devalue our currency also – to may be around Rs 76/$ which is its true value. Impose a 30% tax on Chinese imports citing national security interests (their actions on Brahmaputra and POK).

It will create all the jobs that our youth and country needs.

To give a sense of balance, sure Demon’n will ease inflation and hence interest rates. It will make real estate more affordable and not prone to periodic price spirals and so people may not invest in them out of desperation but only when needed and look for better alternative investments. May reduce fees and prices of sectors thriving on black money like doctors and lawyers and some professional classes. It will motivate me more to pay taxes…but that alone may not convince the 99% abiding citizens to strain themselves (i thought so… but quick survey exposed my hollowness) to facilitate the government to catch the errant few.

With some serious disgust i should also mention that balanced debate seems impossible on this subject. Modi baiters throw all kinds of silly bile  … it won’t work, too draconian; what happens to A, AA, MA, BA,him, etc., will not succeed using anything from vile adjectives to heavy invectives. On the other hand Modi fans are rather obsessed – they talk as if this is the best thing that could have happened to the country since independence, this act required stature of Go… or such terms. You utter your reservations, abuse is not far away in time.

I am sorry. I am a big Modi fan myself. But i refuse to back him wholesale. I retain my right to be critical on certain issues or as in this case certain aspects of proposed action. To surrender this right of mine is an assault on reasoned debates and a vacuum of balance.

When we were descending I asked Kavya as to how he would like to be told by the teacher on any issue (i) Just be told by the teacher what to do in a stern way or (ii) she explains the matter, tells him about the risks and benefits and recommends that he acts. He didn’t hesitate to vote for 2nd option.

At last some consolation for me. Modi could have taken the convincing route than the prescriptive school teacher approach.

3 thoughts on “Modi’s 500/1000 move may have sent him to stratosphere; but he has to be more convincing

  1. Kimaraswamy,
    I would agree with you on all your points, except may be the final judgement that you made. I believe you missed out some critical points like the impact this might create with regard to creation of black money in future. I agree that some may want to find innovative ways to cheat the system in its new avatar with new currencies, etc. Today, black money, currption has been accepted norm for most people. This initiative would put the pressure on those and try to bring back to the original stream of thinking, may have been there many years back. Another point is that the impact that it has on the children and the society as a whole, that is bad to be corrupt and not to pay taxes, etc and the law will catch up in case people are taking chances with accumulating black money. I see this initiative providing a platform for discussion how bad is black money and corruption, etc and the positive impact that this would bring in on the society as a whole…
    on the other hand, if there was no initiative, it would become even more accpepted as bribe, black money, etc and are etched in our DNA
    Whatever economic benefit this may bring or not but the benefit, at least is that it would leave a question in the minds of everyone before deciding to cheat the system. I believe that this is a good benefit on its own as it has a long standing positive impact on the society
    Thanks

    Like

  2. A nice post with a very sound argument for debate rather than blind for or against. After all there is no absolute black and white in any matter, if you’ll pardon the pun.

    I am much more positive about the crusade against black money of which this is, but one move. Black money is more than just tax evasion. It is often connected with illegal money – mostly from corruption, land grabbing and criminal activity. In that sense the fight against “black money” is more than catching tax defaulters and therefore, in my view, is elevated to a must do action for any government.

    Its impact on real estate and tax dodging professions has been brought out by you. Now, by controlling supply of high value notes, the ease of reverting back to old ways can be curtailed. Without a doubt, this is going to give a fillip to electronic transactions in a big way and cash transactions may simply decline and at some point become socially undesirable except for petty transactions. We have also seen much greater vigilance by government authorities. Couple this with the fact that under the present government, there is far less of obvious scandals. That extends to states too.

    I would therefore place demonetisation as one move in a series of developments that discourage both tax evasion and illegal making of money. I am more optimistic and therefore concur with all your sample citizens that the relatively minor pain is worth it.

    Like

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