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Demonetisation hovers like a dark cloud

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6 years ago

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Demonetisation hovers like a dark cloud

[vc_row][vc_column][vc_column_text]Economic Survey points to the short-term costs which are visible and tangible

By Parsa Venkateshwar Rao Jr

In President Pranab Mukherjee’s address to the Joint Session of Parliament as the Budget Session kicked off on Tuesday, there was a passing reference to demonetisation, in Para 55, of the more-than-an-hour long and 80-paragraph speech. It seemed as though the government (the President’s address is written by the government) did not want to linger too long on the unpleasant fact of demonetisation.

But an hour after President Mukherjee’s speech and after Finance Minister Arun Jaitley laid the Economic Survey 2016-17 on the table of Lok Sabha, Chief Economic Advisor in the Ministry of Finance, Arvind Subramanian, took the floor at the National Media Centre, to explain to the media the salient points of the survey, which is the official assessment of the state of the economy of the year gone by.

The survey had to take the bulls by the horn as it were, and in this case the bull and its horns happen to be Prime Minister Narendra Modi’s November 8, 2016 announcement declaring that Rs 1,000 and Rs 500 notes will cease to be legal tender. Problems followed, and though the ordinary people bore with the acute inconvenience it had created which emboldened the Prime Minister to believe that the people will back his unpopular decision, the Economic Survey could not look away from the issue staring in the face of the economy.

While describing demonetisation in laudatory terms as “a radical governance-cum-social engineering measure”, and seeking to assess the short-term costs and long-term benefits of the move, the survey could not avoid noting that “the costs have nonetheless been real and significant” ; it also said, “The magnitudes of short-term costs remain uncertain, as do the timing and extent of long-term benefits.”

The survey also emphasises what needs to be done to cushion the hard-landing of demonetisation: “…remonetising the economy expeditiously by supplying as much cash as necessary, especially in lower denomination notes; and complementing demonetisation with more incentive-compatible actions such as bringing land and real estate into the GST, reducing taxes and stamp-duties, and ensuring that demonetisation does not lead to over-zealous tax administration.”

But then he places demonetisation as one of the many measures, including the passing of the GST Bill, the setting up of the Monetary Policy Committee (MPC) in the Reserve Bank of India to calibrate interest rates and to manage inflation, giving Aadhaar a legal basis by making the Unique Identification Authority of India (UIAI) a statutory body. The survey does not give demonetisation the status of a game-changer in itself.

In Chapter 3 of the survey, enticingly entitled “Demonetisation: To Deify or Demonise?” it offers a closer look at the decision. It says that “India’s demonetisation is unprecedented in international economic history” because “all other sudden demonetisations have occurred in the context of hyperinflation, wars, political upheavals, or other extreme circumstances. But the Indian economy had been growing at the fastest clip in the world on the back of stable macroeconomics and an impressive set of reforms. In such normal circumstances, demonetisations – such as the one announced recently in Europe – tend to be phased in gradually.”

And the survey tries to explain, if not explain away, demonetisation, in another way: “In the wake of the Global Financial Crisis (GFC), advanced economies have used monetary policy t stimulate growth, stretching its use to domains heretofore considered heretical such as negative interest rate policies and “helicopter drops” of money. In fact, India has given a whole new expression to unconventional monetary policy, with the difference that whereas advanced economies have focused on expanding money supply, India’s demonetisation has reduced it. This policy could be described as “reverse helicopter drop”, or perhaps more accurately a “helicopter hoover”.

It can be seen that the survey tries hard to understand and explain the inexplicable demonetisation move, and it has come to the hard conclusion that this would bring down the growth rate by one-fourth or one-half percentage points.[/vc_column_text][/vc_column][/vc_row]

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Rahul Gandhi disqualified as Lok Sabha MP after conviction in 2019 defamation case

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18 mins ago

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March 24, 2023

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Congress leader Rahul Gandhi has been disqualified from his membership as a Member of Parliament (MP) from the Lok Sabha after his conviction and subsequent two-year prison sentence in a 2019 defamation case by a court in Gujarat’s Surat city yesterday.

This is a breaking story and more details will follow.

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Amritpal Singh may be headed to Delhi: Reports

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27 mins ago

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March 24, 2023

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Fugitive Khalistani leader Amritpal Singh may be headed for Delhi, a day after his last known location was traced to Haryana, reports quoting sources have claimed.

An NDTV report quoting sources said the security has been heightened across the national capital as its suspected that the notorious ‘Waris Punjab De’ chief may be headed to Delhi after last being spotted in Shahabad in Haryana’s Kurukshetra.

On Sunday, Amritpal Singh and his associate Papalpreet Singh, had stayed at Shahabad home of a woman identified as Baljeet Kaur, who was arrested yesterday, Punjab Police said.

A video with a time stamp of Monday, doing the rounds on the internet yesterday showed the fugitive Sikh preacher dressed in a white shirt and blue jeans, trying to hide his face with an umbrella as he was departing from the Baljeet Kaur’s house in Shahabad.

On Thursday, the Punjab Police arrested Amritpal Singh’s former gunman and notorious associate, Tejinder Singh aka Gorkha Baba.

A report quoted DSP Payal Harsimrat Singh of the Punjab Police as saying that Tejinder Singh, a resident of Punjab’s Mangewal village, was nabbed by the Khanna police.

DSP Harsimrat said Tejinder, who was a gunman for Amritpal Singh for a long period and often lived with the Waris Punjab De chief, is also involved in the Ajnala case. The officer said that Tejinder, also known as Gorkha Baba, was very active on social media and often posts pictures of himself brandishing different weapons due to which he’s wanted in a separate case registered against him at Malaud police station.

The official further said that Tejinder has been booked under sections 107/151 of the Indian Penal Code (IPC) and two other aides who accompanied him, have also been taken into custody and are being questioned.

A nation-wide crackdown was launched to nab Amritpal Singh after last month, the dreaded Khalistani leader and his supporters armed with swords and guns, stormed a police station in Ajnala on the outskirts of Amritsar city and clashed with police for the release of one of his aides Lovepreet Singh.

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Woman gang-raped, boyfriend assaulted in Virar near Mumbai

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49 mins ago

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March 24, 2023

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Two men allegedly gang-raped a woman and thrashed her boyfriend near a temple in Virar area, near Mumbai, in Maharashtra’s Palghar district, officials said on Thursday.

According to the police, the incident happened at around 5 pm on Wednesday in the forest area near the Jivdani temple in Virar East where the 20-year-old victim and her boyfriend were chatting and sitting alone.

The two accused, identified as 25-year-old Dheeraj Soni and 24-year-old Yash Shinde—both residents of Sainath Nagar locality of Virar, a distant Mumbai suburb—spotted the couple sitting on a hillock near Jivdani temple and tried to extort money from the young lovers after they saw them hugging, said an official.

The official said that the victim’s boyfriend told them he didn’t have any cash on him and instead transferred Rs 500 to the accused men via internet banking, however the men demanded more money and started to beat up the man, adding they also smashed an empty beer bottle on his head.

The accused then stripped the boyfriend naked, tied him to a tree and raped the girl in front of him who could do nothing but helplessly watch the horrific ordeal unfold in front of his eyes.

An official from the Virar police station said the injured boyfriend could not stand up to the attackers as he watched the accused duo take turns raping his girlfriend.

He said that after the brutal rape, the accused men fled the scene with man’s clothes and his mobile father while the petrified rape survivor also fled the spot after she saw her violators departing, leaving her unconscious boyfriend behind.

The injured boyfriend was spotted by locals after he regained consciousness around 6.30 pm and came out of the secluded forest looking for something to cover his naked body. The residents informed the police, who arrived at the spot and took him to a hospital for treatment after which his statement was recorded.

Police team then arrived at his girlfriend’s home where she narrated the horrific ordeal and based on her statement, a case of gang rape, unnatural sex, assault, extortion, threatening against the two accused under sections 376(d), 324, 377, 384, 504, 506 and 34 of the Indian Penal Code (IPC), was registered against the accused who were then arrested within two hours of the incident, an official said.

Further investigation is underway, he added.

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