Resisting the demonetisation move

The Indian Opposition parties are trying everything to blacken Prime Minister Narendra Modi’s demonetisation move

Caught unawares by the sudden announcement, they started off by opposing for the sake of opposing. It was a muted response till the queues got longer at banks and there were reports of currency running out. It was at this point that the Opposition got a “people’s handle” to beat Modi with. 

 The narrative then changed from we not against demonetization to “people’s plight” on grounds that without cash there would be riots on the streets. Nothing of the sort happened.  
 On the contrary, reports from the ground backed Modi’s bold move. This was evident from surveys where it clearly was a thumbs up for Modi and his daring move to ban Indian currency notes of 500 and 1000 denominations. 
 However, the test was and remains electoral. In the results of the recently concluded by-polls to Parliamentary and assembly seats, the BJP has done well. Even in the civic elections in Rajasthan the BJP results were positive. So also in Maharashtra,  where the BJP chances in the civic polls looked rather grim. A day later, the party won the local bodies by elections in Gujarat. The BJP emerged as a clear winner. 
 All this is good news for the ruling party and bad tidings for the Opposition. Modi took a big risk. The gamble paid off and as of now he seems set to storm the bastion. 
 But this is just the beginning in the series of steps that Modi’s visibly buoyant government intends to take to consolidate his first step of demonetizing part of the Indian currency. 
 In yet another move, the Modi government has sought to amend the taxation law. Through this it has given yet another chance to people with unaccounted cash to come clean. 
 The Taxation Laws (Second Amendment) Bill, 2016  was passed in Parliament amid din and without any debate. 
The move to amend the provisions of the Act is to ensure that defaulters are subjected to a higher rate of tax plus a penalty and a surcharge.  
 Were the money to come in, a quarter of the amount declared will be locked up for four years in interest free deposits, leaving such declarant with only 25% of funds for immediate use. 
 The fund collected are proposed to be utilized for welfare schemes for the poor.  
 The amendments were necessitated following reports of people laundering demonetized currency. 
There was a view that instead of allowing people to find illegal ways of converting their black money, the Government should give them an opportunity to pay taxes with heavy penalty. This, apart from helping the Government to get additional revenue for undertaking activities for the welfare of the poor, would ensure  that the remaining part of the declared income legitimately comes into the formal economy. 
Irrespective, the collections will help fund welfare schemes for the poor including providing subsidy for housing. 
 Evasion of taxes, it is no secret, deprives the nation of critical resources which would, otherwise, enable the Government to undertake anti-poverty and development programmes. It also puts a disproportionate burden on the honest taxpayers who have to bear the brunt of higher taxes to make up for the revenue leakage. 
On paper, it seems to be a win win situation for the Modi government. It is clearly upbeat about the ground swell of support the demonetization measure has generated. Opinion polls and even election results have gone the BJP way much to the chagrin of the Opposition. 
An interesting aspect of the policy is the streedhan component of demonetization. 
Technically, stree dhan are the gifts and cash a woman owns: be it what she gets at the time of marriage or what she accumulates after that. In common parlance, it is the money, usually cash, she has saved up with or without her husband’s knowledge. Usually it is the latter. 
The Modi government had factored this while announcing demonetization. This was the reason for the government’s repeated assurance of not questioning deposits below 2.5 lakh Indian rupees given that every housewife saves up money and is entitled to now put the extinct currency notes in her bank account. No questions asked. 
 Therefore while many rushed to use this provision to convert unaccounted money, wives were miffed that the Modi-move had laid bare their ability to deftly save up cash from the monthly expenses as well as manage to keep it as a secret from their husbands. In a lighter vein, it is being said that Modi has created a marital discord. 
However, what irked the people were photographs of Modi’s ninety-year-old mother queuing up in a bank to get cash. Aimed at grabbing eyeballs on grounds that there were no special privileges extended to Modi’s family, this was dismissed as a publicity gimmick by many. Those who thought it was real, felt that Modi the Prime Minister had failed Modi the son as it were. 
The common refrain was how could any son bear to do this to his mother? They felt that children are duty bound to pitch in for parents particularly when age is against them. Hence, here Modi is on a weak wicket.  But this is not about Modi the man: it is about Modi the Prime Minister. It is about a leader who has delivered on his promise of unearthing black money. It is about a head of government who has taken on a powerful and rich segment of the society: at least visibly. On this count, in one single stroke Modi has shown that he is made of sterner stuff.  

The writer is a senior Indian journalist, political commentator and columnist of The Independent. She can be reached at: [email protected]

Resisting the demonetisation move

The Indian Opposition parties are trying everything to blacken Prime Minister Narendra Modis demonetisation move

Caught unawares by the sudden announcement, they started off by opposing for the sake of opposing. It was a muted response till the queues got longer at banks and there were reports of currency running out. It was at this point that the Opposition got a peoples handle to beat Modi with. The narrative then changed from we not against demonetization to peoples plight on grounds that without cash there would be riots on the streets. Nothing of the sort happened. On the contrary, reports from the ground backed Modis bold move. This was evident from surveys where it clearly was a thumbs up for Modi and his daring move to ban Indian currency notes of 500 and 1000 denominations. However, the test was and remains electoral. In the results of the recently concluded by-polls to Parliamentary and assembly seats, the BJP has done well. Even in the civic elections in Rajasthan the BJP results were positive. So also in Maharashtra, where the BJP chances in the civic polls looked rather grim. A day later, the party won the local bodies by elections in Gujarat. The BJP emerged as a clear winner. All this is good news for the ruling party and bad tidings for the Opposition. Modi took a big risk. The gamble paid off and as of now he seems set to storm the bastion. But this is just the beginning in the series of steps that Modis visibly buoyant government intends to take to consolidate his first step of demonetizing part of the Indian currency. In yet another move, the Modi government has sought to amend the taxation law. Through this it has given yet another chance to people with unaccounted cash to come clean. The Taxation Laws (Second Amendment) Bill, 2016 was passed in Parliament amid din and without any debate. The move to amend the provisions of the Act is to ensure that defaulters are subjected to a higher rate of tax plus a penalty and a surcharge. Were the money to come in, a quarter of the amount declared will be locked up for four years in interest free deposits, leaving such declarant with only 25% of funds for immediate use. The fund collected are proposed to be utilized for welfare schemes for the poor. The amendments were necessitated following reports of people laundering demonetized currency. There was a view that instead of allowing people to find illegal ways of converting their black money, the Government should give them an opportunity to pay taxes with heavy penalty. This, apart from helping the Government to get additional revenue for undertaking activities for the welfare of the poor, would ensure that the remaining part of the declared income legitimately comes into the formal economy. Irrespective, the collections will help fund welfare schemes for the poor including providing subsidy for housing. Evasion of taxes, it is no secret, deprives the nation of critical resources which would, otherwise, enable the Government to undertake anti-poverty and development programmes. It also puts a disproportionate burden on the honest taxpayers who have to bear the brunt of higher taxes to make up for the revenue leakage. On paper, it seems to be a win win situation for the Modi government. It is clearly upbeat about the ground swell of support the demonetization measure has generated. Opinion polls and even election results have gone the BJP way much to the chagrin of the Opposition. An interesting aspect of the policy is the streedhan component of demonetization. Technically, stree dhan are the gifts and cash a woman owns: be it what she gets at the time of marriage or what she accumulates after that. In common parlance, it is the money, usually cash, she has saved up with or without her husbands knowledge. Usually it is the latter. The Modi government had factored this while announcing demonetization. This was the reason for the governments repeated assurance of not questioning deposits below 2.5 lakh Indian rupees given that every housewife saves up money and is entitled to now put the extinct currency notes in her bank account. No questions asked. Therefore while many rushed to use this provision to convert unaccounted money, wives were miffed that the Modi-move had laid bare their ability to deftly save up cash from the monthly expenses as well as manage to keep it as a secret from their husbands. In a lighter vein, it is being said that Modi has created a marital discord. However, what irked the people were photographs of Modis ninety-year-old mother queuing up in a bank to get cash. Aimed at grabbing eyeballs on grounds that there were no special privileges extended to Modis family, this was dismissed as a publicity gimmick by many. Those who thought it was real, felt that Modi the Prime Minister had failed Modi the son as it were. The common refrain was how could any son bear to do this to his mother? They felt that children are duty bound to pitch in for parents particularly when age is against them. Hence, here Modi is on a weak wicket. But this is not about Modi the man: it is about Modi the Prime Minister. It is about a leader who has delivered on his promise of unearthing black money. It is about a head of government who has taken on a powerful and rich segment of the society: at least visibly. On this count, in one single stroke Modi has shown that he is made of sterner stuff. The writer is a senior Indianjournalist, political commentator and columnist of The Independent. She can be reached at: [email protected]