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Demonetisation hovers like a dark cloud

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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]

India News

Delhi LG VK Saxena directs probe into remarks against Kangana Ranaut by Congress leader Supriya Shrinate

The Delhi Police will investigate who was behind the said social media post and whose mobile phone was used for the purpose.

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Delhi lieutenant governor Vinai Kumar Saxena today sought a detailed probe from Delhi Police commissioner Sanjay Arora in relation with the alleged defamatory social media post made by Congress’s Supriya Shrinate against actor-turned-politician Kangana Ranaut.

Reportedly, BJP candidate from New Delhi Bansuri Swaraj had given a complaint to the LG seeking probe and registration of an FIR against Shrinate for outraging the modesty of a woman. Subsequently, the Delhi LG has forwarded the complaint to the Delhi Police Commissioner, directing a scientific investigation in the matter and initiation of legal action, if necessary.

Reports said that the Delhi Police will also investigate who was behind the said social media post and whose mobile phone was used for the purpose. A major controversy erupted on Monday after an objectionable post from Supriya Shrinate’s social media handle against Kangana Ranaut, who has been announced as the BJP candidate from Himachal Pradesh’s Mandi.

Responding to the remarks, Kangana Ranaut said that they must free the daughters from the shackles of prejudices and must rise above the curiosity about their body parts. She added that people must refrain from using sex workers’ challenging lives or circumstances as some kind of abuse or slur. She concluded that every woman deserves her dignity. As the controversy intensified, the Congress leader asserted that someone else had posted the objectionable content from her handle. 

Meanwhile, the Election Commission on Wednesday issued a show cause notice to Congress leader Supriya Shrinate for her derogatory remarks against Kangana Ranaut. The Election Commission observed that the remarks are undignified and in a bad taste. The election body asked the Congress leader to respond to the commission by Friday. In the notice, the Election Commission stated that the statements made by the leader is prima facie violative of the Model Code of Conduct (MCC) being in force ahead of the Lok Sabha elections. 

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Bollywood actor Govinda joins Maharashtra Chief Minister Eknath Shinde’s Shiv Sena

Govinda on his official induction in the party by CM Eknath Shinde said he is joining Shiv Sena and it is a blessing from God. He said he thought he would not enter politics again. Govinda said Mumbai looks cleaner and better now.

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Bollywood actor Govinda joined Maharashtra chief minister Eknath Shinde’s Shiv Sena on Thursday ahead of the upcoming Lok Sabha elections in Maharashtra. In 2004 Govinda contested from Mumbai North Lok Sabha on a Congress ticket and earned the nickname of a giant slayer as he defeated BJP’s Ram Naik. He resigned from the party and said that he had decided to take a break from politics.

Govinda on his official induction in the party by CM Eknath Shinde said he is joining Shiv Sena and it is a blessing from God. He said he thought he would not enter politics again. Govinda said Mumbai looks cleaner and better now. He said his parents had a good relationship with Shiv Sena founder Balasaheb Thackeray.

Shiv Sena leader Krishna Hedge met the Bollywood actor at his residence in Juhu. Maharashtra CM Eknath Shinde said the actor’s joining the Shiv Sena does not come with a rider. Govinda said whatever work is assigned to him, he will do it to the best of the ability. He said he was a part of the 14th Lok Sabha and has returned to politics after 14 years.

Speaking about his role in politics, the actor said he would transform the film city of Mumbai. He did not reply when he was asked about contesting elections. Govinda said everybody has seen the same level of progress in Maharashtra in the last 2 years, as it has been seen in the country in the last 10 years. He said he is going to focus on the beautification of the state and work towards the growth of art and culture.

Rajya Sabha MP Milind Deora welcomed Govida into the party and said he has known the veteran Bollywood actor for almost 25 years. He recalled the 2004 election and said both of them had fought elections together.

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To browbeat, bully others is vintage Congress, says PM Modi after lawyers express concern over attempts to undermine judiciary

Lawyers, including Harish Salve and Bar Council chairperson Manan Kumar Mishra, wrote to CJI DY Chandrachud, alleging that a vested interest group is trying to put pressure on the judiciary and defame courts, particularly in cases of corruption involving politicians.

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PM Narendra Modi on Thursday launched a scathing attack on the Congress party after more than 600 lawyers and some bar associations across the country wrote to the Chief Justice DY Chandrachud, expressing concerns over attempts to undermine the judiciary’s integrity using political and professional pressure.

Taking to social media platform X, PM Modi wrote that to browbeat and bully others is vintage Congress culture. He recalled that five decades ago, the party itself had called for a committed judiciary, adding that they shamelessly want commitment from others for their selfish interests, but desist from any commitment towards the nation. He concluded that no wonder, 140 crore Indians are rejecting them.

Prime Minister Narendra Modi’s comments followed after lawyers, including Harish Salve and Bar Council chairperson Manan Kumar Mishra, wrote to CJI DY Chandrachud, alleging that a vested interest group is trying to put pressure on the judiciary and defame courts, particularly in cases of corruption involving politicians.

The lawyers said the tactics used by the vested interest group are damaging the courts and threatening democratic fabric. They stated that Chief Justice Chandrachud’s leadership is crucial in these tough times and the Supreme Court should stand strong, adding it is not the time to maintain dignified silence.

Without naming, the letter also targeted a section of lawyers and alleged they defend politicians by day and then try to influence judges through the media at night. Furthermore, they claimed that some elements are trying to influence who the judges are in their cases and spread lies on social media to put pressure on the judges to decide in a particular way.

In addition, the All Manipur Bar Association had also written to CJI DY Chandrachud highlighting the need to speak out against underhanded attacks on the judiciary on Wednesday. In its letter, the bar association said that it was extremely concerned about recent trends where vested interest groups were trying to defame the courts with frivolous logic and stale political agendas.

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