We just crossed 50 days milestone since Narendra Modi declared that the old currency notes of Rs. 500 and Rs. 1000 were demonetised. Arun Jaitley told us a few days back that after December 30th the country will just pass the “worst phase” of the demonetisation exercise, which means we have entered the “bad phase” in this new year.

When Narendra Modi gave his historic speech on ending the reign of black money in Indian economy through the demonetisation of Rs. 500 and Rs. 1000 currency notes, many people of the country, rather most of them were, caught unaware, regarding the outcome of this Tughlaqi decision.

Within days, when the banks opened up for exchange and deposit of old currency notes, we found long serpentine queues outside banks, people moving pillar to post for getting essential items and services for their families, small and medium scale enterprises shutting down or downsizing their business, and above all, large number of casual workers, contract workers, daily wage-earners losing their livelihood and moving back to their villages.

Since the last few decades, especially after the ushering of the neo-liberal economic era, Indian economy experienced a large-scale migration of labour from the rural hinterland to the metropolitan cities. The major part of these people were those who've either turned into destitute due to the lower incomes from farming or were those who couldn't feed their families with the meagre sum they could earn in their villages.

Narendra Modi's decision to do a sudden transition to a cashless economy has caused a major turbulence in the economic activities that provided the poor people with a hand-to-mouth existence option. For the first time in decades the country is experiencing a rapid reverse-migration, from the metropolitan cities to the villages, as the people, who've either lost their savings due to the drastic decision of a megalomaniac Prime Minister or have lost their source of earning, are moving back to their native places to avoid the high cost of living in the metropolitan cities.

It's not that only the daily wage-earners are affected due to this decision of the Modi government. If you look closely the labour law book always had a provision for employers to pay their employees, whose salary was below the taxable level, through cash. Though a large number of companies would fiddle with the law by fudging the number of employees to show excessive expenditure, a large-section of unorganised office employees survived on the cash salary.

Since 11th November, the day the banks opened their gates to the public after the fateful night of 8th November, a large number of these white-collar employees, who never make enough to enter the lower middle class brethren in the metropolitan cities and tier II and tier III cities of India, started spending a lot of time standing in the bank queues to get their hard earned money converted as well as to get their savings deposited.

In a country where only 35 per cent of the adult population has banking access and where nearly 70 per cent of the total population lives with an earning of $ 1.00 a day, it's quite infantile to even imagine that the country can go cashless overnight. Narendra Modi in particular and the Sangh Parivar, in general, are alien to the term – logic. We can't expect them to consider the ground level situation before taking a decision on the crucial economy – can we?

The evening when Modi was carrying out his fierce speech against black money and the parasites who've been eating the Indian economy, the BJP leaders throughout the country were busy putting up banners and flexes congratulating the prime minister for something he didn't declare till then. When finally Modi uttered the word – demonetisation and declared that the currency notes of Rs. 500 and Rs. 1000 are withdrawn from circulation, the decision was hailed as a “surgical strike” on black money uniformly, without change of words, terms, etc. throughout the country by the BJP leadership.

In an article published in People's Review a few weeks back, I've discussed on how the decision of demonetisation of Rs. 500 and Rs. 1000 notes were not as secret as the BJP and the Sangh Parivar wants us to believe.

On 8th April 2016, Times of India published a report by Mayukh Shetty from Mumbai that quoted both Arundhati Bhattacharya, the SBI chief, and Soumya Kanti Ghosh, the chief economist of the SBI, who refuted the claim of then RBI governor Raghuram Rajan that the sudden surge of cash in the economy at that time happened due to the elections in four states at that time. In a report Ghosh credited the “rumour” regarding demonetisation of higher currency notes a reason why people were actually flushing out the black money they hoarded in cash and getting it invested in safe havens.

We have read in The Hindu Business Line, how the news of forthcoming new currency notes of Rs. 500 and Rs. 2000 made rounds back in October, which was allegedly a cause that Sanjeev Kamboj, the BJP leader of Punjab, could post the picture of  Rs. 2000 notes on his Twitter handle. Later Kamboj said he got the picture from a WhatsApp group.

The sheer rhetoric mongering triggered utmost confusion among the common people who were not finding a clue regarding the source of a huge cache of new currency notes that were found with people with BJP connection in mostly non-BJP ruled states like Karnataka, Tamil Nadu, and West Bengal. Surprisingly not much cash was recovered in new currency notes in the BJP ruled state following the chest-thumping of the BJP government and its sycophants that the Sangh Parivar is pious in terms of cash management and none of its activists or supporters had black money.

The people of the country also couldn't trace the source of Rs. 550 crore that the infamous mining mafia cum BJP leader of Karnataka, Janardhan Reddy, spent on his daughter's wedding; even Nitin Gadkari, a Sangh strongman and minister in Modi's cabinet organised a gala event on the occasion of his daughter's wedding in Pune where VVIPs and Sangh leaders including Mohan Bhagwat were brought in chartered planes. Gadkari hired 50 chartered planes and yet we have to believe that this money is not ill-gotten money but sanctified money with Sangh's patriotic stamp on it.

The people also couldn't understand why the capitalists were so happy with the war waged by the Modi government on “black money” and its decision to move towards a cashless economy. No capitalist entity of foreign or Indian origin questioned the logic behind the move of the Modi government, rather started drumming in favour of the decision, awarding Modi with titles like farsighted, pragmatic, visionary, so on and so forth.


The news of demonetisation was actually a big news for the people of the country, yet it was never any news for those whom the move was supposed to affect and maime. In recent weeks, when common people were fighting for their space in the serpentine queues in front of the banks, or when people were succumbing to death standing in the long queues for hours, we couldn't trace a single black money hoarder, a single MLA, MP, minister, corporate tycoon, C-level executives, real estate barons, liquor dealers, smugglers, terrorists, or Sangh activists – except the mother of Narendra Modi, in those very queues.

We never found anyone from the Tatas, Ambanis, Birlas, Goenkas, Adanis, or Vedanta group's Agarwals standing in any queue of any bank to have their currency notes deposited. We even never saw any of their peons or corporate executives doing the same for their boss. Probably the reason was disclosed by the BJP MLA of Kota, who claimed that the corporate tycoons like Ambani and Adani had prior information regarding the demonetisation of the higher currency notes.

An RTI request regarding when, where and how much cash the BJP MPs and ministers deposited to their bank accounts or got exchanged was rejected by the government. The government of India and the RBI also declined to share the minutes of its meetings on the demonetisation exercise.

These arbitrary actions of declining information that is non-sensitive to the national security or economic sovereignty cannot be attributed to anything else but utmost fear of getting caught at the wrong place.

By denying RTI access to the demonetisation exercise Modi himself scrapped his own call of not only seeking information through RTI, rather seeking accountability as well, a call he gave during the annual RTI meeting in October 2015.


However, as soon as the Modi government anticipated the rising tides of discontent throughout the nation with the demonetisation decision, it started diverting the motto of the exercise to “digital economy” and bringing transparency to the economic affairs in the country. The finance minister spoke at length about how a change in economy will be shocking at the beginning, however, how it will soothe the wounds in the long run through immense benefits.

The fact-free claims (Jaitley declined to talk about facts and figures on camera during the HT Leadership Summit in New Delhi) and stupendous claims of Arun Jaitley on Bill Gate's data on mobile phone, etc. once again proved that the Sangh Parivar is solely dependent on the most mediocre talent sourced from upper-caste bigots and the economy of the country is in a perilous state under Jaitley.

Facts that Arun Jaitley tried to conceal was that after demonetising nearly 86 per cent of the cash circulating in the economy and by blaming all cash transactions as unscrupulous, his ministry had actually committed a grave sin of throwing the country’s economy into a monumental chaos.

His ministry has actually worked in tandem with the large foreign monopoly and finance capital owned public sector and private banks with capital infusion through public deposits and limited withdrawals.

The money deposited by the people in the banks belong to them technically and is a liability on the banks as they may have to return it to the customers whenever the latter demands so. However, in the present circumstances, only the rich and upper-middle class can benefit from the cash rationing because of their access to net banking and other e-transaction mechanism, for the common people, i.e. the majority of Indians the cash remains locked in the banks, which helps the banks to give away the money as loan to corporate sharks, who in turn can flee like Vijay Mallya with the money, which again will be written off by the banks as bad debt.

As merger proposals of the different PSU banks are on the table, there seems to be an urgent rush of building up a huge cache of money reserve with the banks and thereby improving their lending capacities despite their failures to recover a large amount of loans from the defaulting corporate houses. A report published earlier this year in Indian Express claimed that the public sector banks wrote off Rs. 130,000 crore worth of unrecovered loans as bad loans between 2011 and 2015.

The banks will be able to lend more now and with the government's insistence to help the corporate masters of Narendra Modi and his Sangh mentors, the PSU banks may change their rule books and keep rolling out more loans than the ratio of loans to the deposits that they hold in the banks. This will immensely help the likes of Ambani, Adani, or Vijay Mallya to fill their coffer with free money offered by the friendly regime.

Even the Modi government is aware that the talk of the cashless economy is as baseless as the prime minister's recitation of a WhatsApp message that talked about a beggar in Mumbai using a POS machine.

However, though the cashless economy cannot set in and work properly in villages, where electricity happens to be a luxury forget 3G or 4G internet, it can still create a buzz among the 330 million lower and upper middle-class urban Indians, whom Modi is trying to hoodwink.

Most of these people do have bank account access and a large section of these classes know a bit of this or a bit of that of online transactions and can handle a debit card of their own.

To bring a chunk of these people on the digital payment system will multiply the business revenue of the payment processing and e-wallet companies several times. The companies like PayTM, which was funded at the beginning by the Alibaba group of China and is now also funded by Ratan Tata¹ personally since he came to know about some of their 'capacities' and 'promising future', will make a kill in the market that is quite vulnerable to monopolisation at this stage.

While the purchaser pays only the price of the goods bought by them using the e-wallet system, the seller can get their money out of the e-wallet to their bank accounts only after paying a transaction charge that may be between 1.5 per cent to 2.5 per cent. This extra surcharge that the sellers are supposed to bear for the transactions will shoot up the profit graph of the One 97 owned e-wallet business on one hand and on the other, it will push a rise in the prices of the retail and FMCG products as well as trigger inflation.

The e-wallet companies will certainly earn so much money that they are now forcing the Modi government to do advertisement on their favour in the public domain. By misusing the money of the public exchequer that is with the central government, now the BJP government is announcing huge rewards on purchases made through e-wallets and other digital formats.

This shameless advocacy for these electronic payment companies exhibits the stooping of the Modi government before the might of corporate capital and how much disregard it has for the plight of the common people who are suffering due to this demonetisation exercise.

At a time when the entire cabinet of the Modi government is singing paeans to the e-wallets and digital economy goddess, the BJP has ensured that the cooperative banks that formed a backbone of India's rural banking system and a major source of finance for those who are engaged in agriculture, collapse and die a tragic death.

Through a host of decisions that contradicts each other and were withdrawn or reversed 180° within few days, the Modi government was, on one hand, causing chaos in the banking system and on the other hand, it stopped the cooperative banks from helping the aggrieved peasants and forced their customers to seek either support from unscrupulous money-lenders and private or PSU commercial banks.

We can read this article published by The Wire on how the BJP government has destroyed the well-knitted robust banking system of Kerala that depended mainly on the cooperative banks. Though the political compulsion of destroying the banks that were led by the representatives of the ruling LDF or the opposition UDF played a crucial role in the decision of the BJP in its assault against the cooperative banks of Kerala, providing the commercial banks with a huge chunk of readymade customers was the most important reason behind the move.

Whatever may the BJP and its paternal organisation, RSS, try during these months running up to the Uttar Pradesh assembly elections, the facts will reveal themselves slowly and the people will be able to see how their lives and livelihood is jeopardised by the Sangh Parivar's naked corporate appeasement and how the Modi government eventually fooled them in believing in a utopia.

In these circumstances, the new financial year will see more repercussions of the ill-planned and mismanaged demonetisation exercise, which was planned by half-witted bureaucrats with no real skill in understanding the dynamics of economics and the ground realities of the country. The government attempt to forcefully migrate people towards a digital economy without providing any basic means of subsistence will surely backfire against the entire Sangh brigade in the near future.



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1. Ratan Tata paid a visit to the RSS headquarters on 28th December for a reason unknown to anyone else. Probably he wanted to enlist PayTM as a patriotic organisation in the rolls of the Sangh Parivar