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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]

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Hardeep Singh Puri set to win Rajya Sabha bypoll unopposed

Union Minister Hardeep Singh Puri is set to be elected unopposed to the Rajya Sabha from Madhya Pradesh after the returning officer rejected the nomination papers of two independent candidates.

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Hardeep Puri

Union Petroleum Minister Hardeep Singh Puri is set to enter the Rajya Sabha unopposed from Madhya Pradesh after the nomination papers of two independent candidates were rejected during scrutiny on Tuesday.

The two candidates whose nominations were rejected were Kante Sayanna and Rajkumar Lohani, the latter being backed by the Congress. Their rejection leaves Puri as the only candidate in the contest for the vacant Rajya Sabha seat.

According to an official, the result will be announced on November 5, which is also the last date for withdrawal of nominations.

The Returning Officer, Umesh Sharma, examined the nomination papers on the last day of scrutiny and rejected the two independent candidates’ applications.

Objections raised against Hardeep Puri’s nomination

The nomination papers submitted by Puri also faced objections from the two independent candidates and Congress leader Hemant Katare.

They questioned the validity and completeness of Puri’s affidavit filed in Form 26, raising concerns over whether the mandatory details had been properly furnished.

However, after examining the objections, Returning Officer Umesh Sharma concluded that Puri had not violated any requirements under the Representation of the People Act.

Sharma stated in his order that no defect had been found in Puri’s nomination papers that could justify their rejection.

Following the decision, Katare and Congress MLA Atif Aqeel announced that they would approach the court against the order.

Calling the decision an attack on Indian democracy, the Congress leaders said in a statement that Puri’s nomination should have been rejected despite what they described as significant errors.

Why the Madhya Pradesh Rajya Sabha seat fell vacant

The by-election was necessitated by the resignation of Union Minister L Murugan, which left a Rajya Sabha seat vacant in Madhya Pradesh.

With the nomination papers of both independent candidates rejected and Puri’s nomination cleared, the Union minister is set to be elected unopposed.

The final announcement is expected on November 5, the last day for withdrawal of nominations.

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Yogi Adityanath announces free LPG cylinders on Diwali and Holi

Uttar Pradesh Chief Minister Yogi Adityanath has announced one free LPG cylinder each on Diwali and Holi for eligible Pradhan Mantri Ujjwala Yojana beneficiaries. The state has allocated Rs 1,500 crore for LPG refill subsidies covering more than 1.89 crore beneficiaries.

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Uttar Pradesh Chief Minister Yogi Adityanath on Tuesday announced that eligible families covered under the Pradhan Mantri Ujjwala Yojana (PMUY) will receive one free LPG cylinder each on Diwali and Holi.

The announcement came as the Chief Minister participated in a programme organised for distributing LPG refill subsidies to more than 1.89 crore beneficiaries across the state.

The Uttar Pradesh government has allocated Rs 1,500 crore for providing subsidies on LPG cylinder refills to eligible families under the scheme.

Addressing the gathering, Adityanath explained the cost of a domestic LPG cylinder and the subsidy provided by the Centre.

“The price of one domestic gas cylinder is Rs 983.45, and out of this, the Government of India provides a subsidy of Rs 335. You have to spend Rs 648.55 from your own pocket,” he said.

The Chief Minister said the state government had decided to provide one cylinder to poor families covered under the Ujjwala scheme on Diwali and Holi.

“With the money you save, you can buy Diwali sweets and lamps,” he said.

Yogi Adityanath targets previous Congress government

During his address, Adityanath also compared the availability of LPG connections under the present government with the situation during the Congress government’s tenure.

He said people previously faced several difficulties in obtaining a single gas connection, while the present government had provided free gas connections to poor families.

The Chief Minister described the initiative as an example of good governance.

Yogi Adityanath on Ayodhya’s Deepotsav

Earlier on Tuesday, Adityanath described Ayodhya’s Deepotsav, scheduled for November 7, as a symbol of social unity.

In a post on X, he said the festival brought together people from different sections of society through shared faith and cultural participation.

He also referred to the Deepotsav tradition initiated by the state government in 2017, saying it had transformed Ayodhya’s cultural heritage into a celebration involving people from different walks of life.

The Chief Minister is scheduled to visit Ayodhya to review preparations for the event.

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Election Commission clarifies Form 6 rules for existing voters under SIR

The Election Commission has clarified that voters previously enrolled in electoral rolls can submit Form 6 for inclusion if their names are missing from draft lists published during the Special Intensive Revision (SIR).

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Election Commission of India

The Election Commission of India (ECI) has clarified that voters whose names appeared in earlier electoral rolls but are missing from draft lists published during the ongoing Special Intensive Revision (SIR) can submit Form 6 to seek inclusion in the final electoral roll.

In a communication issued on November 3 to the Chief Electoral Officers (CEOs) of all states and Union Territories, the poll body addressed concerns among previously registered voters who were hesitant to submit the form because of the declaration required alongside it.

The Commission clarified that submitting Form 6 in such circumstances would not, by itself, amount to making a false declaration merely because the applicant had been enrolled as a voter previously.

It also stated that no action under Section 31 of the Representation of the People Act, 1950, would be initiated against such applicants solely on the ground of their previous enrolment.

However, this protection applies provided the applicant is not already registered in another Parliamentary or Assembly constituency and the declaration submitted is otherwise in accordance with the law.

Why existing voters were hesitant to submit Form 6

The clarification follows concerns that some previously enrolled voters were reluctant to apply for inclusion in the electoral roll after finding their names missing from the draft lists published during the SIR exercise.

Form 6 requires applicants to furnish a declaration stating that their names are being included in the electoral roll for the first time.

This created apprehensions among previously registered voters, who feared that submitting the form despite their earlier enrolment could be treated as a false declaration and expose them to prosecution under Section 31 of the Representation of the People Act, 1950.

The Election Commission has now clarified that earlier registration does not prevent an eligible voter from submitting Form 6 again when their name does not appear in the draft electoral roll.

Election Commission refers to Delhi High Court order

In its communication, the Commission also referred to the Delhi High Court’s October 14 order in the case of Nilotpal Datta and another versus the Election Commission of India and others.

The case concerned an applicant who had previously been enrolled as a voter but was apprehensive about submitting Form 6 because of the declaration that the name was being included in the electoral roll for the first time.

The High Court observed that the petitioners’ apprehension was misplaced and allowed them to submit Form 6, if they wished, for processing in accordance with the law.

The Election Commission’s latest clarification is in line with this judicial observation.

EC asks states and UTs to publicise clarification

The poll body has asked Chief Electoral Officers across all states and Union Territories to ensure that the clarification reaches concerned voters.

It has also requested officials to publicise the information widely through available media platforms and in local languages so that eligible voters are aware of the procedure for seeking inclusion in the electoral roll.

The clarification comes amid ongoing concerns and legal challenges surrounding the Special Intensive Revision of electoral rolls and the process of re-enrolling voters whose names do not appear in draft lists.

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