Hi there.
First things first.
To all citizens, I wish you a Happy Constitution Day!
To all AAP volunteers, AAP sympathizers, Aam Aadmis and Aurats, I wish you a very Happy 4th Founders Day at the Aam Aadmi Party!
This is going to be a long post about demonetization. If you’ve had enough of it already, I suggest that you pardon me for invading your communication environment but I’m sure your family groups on WhatsApp and your Twitter/Facebook have enough forwards of jokes, songs and images of Gods (heavenly and Sachin) for you to forgive me for my solitary unsolicited post.
My name is Roshan Shankar and I work as an Advisor in the Delhi Government, which is led by Chief Minister Arvind Kejriwal with Aam Aadmi Party being the political party that forms the majority of the legislative assembly and thus, the government. I hold a double Masters degree in Engineering and Public Policy at Stanford University focusing on economic, monetary and national security policy in my degree in Public Policy, and have studied/explored monetary and economic policies and histories of at least 35 countries in detail. By no means an expert, but reasonably aware and self-aware, I think.
I keep this full disclosure at the beginning for a few different reasons:
- For you to know the worldview that I bring to the table and possible biases/ideology/views.
- For you to think about the writers of opinion pieces of their worldview, affiliation and qualification to write on a given subject.
- For you to give some thought to what you felt towards me and what I would say ahead when I said the keywords “Advisor”, “Delhi Government”, “Arvind Kejriwal”, “Aam Aadmi Party”, “Stanford University” and “Masters”, and the possible biases that you feel towards someone with those tags. And to ask yourself this. If those tags had changed to different things like “BJP”, “Nationalist”, “Narendra Modi”, “Government of India”, “Bachelors Degree holder”, “PhD”, “Harvard/IIT”, ‘Non-degree holder”, “JNU”, “DU”: how would you have looked at this same piece below?
All set? Let’s go.
I won’t indulge in another long piece on why Demonetization is good or bad. Here are some of the best pieces out there, which you must read:
Former Finance Secretary Vijay Kelkar (who worked predominantly with the BJP Vajpayee Government of 1999-2004) and Ajay Shah from National Institute of Public Finance and Policy identify 6 battlegrounds of corruption that lie untouched (These should have taken precedence over demonetization): http://www.mayin.org/ajayshah/MEDIA/2016/six_battlegrounds.html
Former Chairperson of Central Board of Direct Taxes BM Singh on whether demonetization delivers pain or gain: http://www.livemint.com/Opinion/hRDFooAtSLaeqmLjwXAfpN/Demonetization-Pain-or-gain.html
RBI Deputy Governor KC Chakrabarty: Demonetization will lead to 6 months of chaos: http://www.hindustantimes.com/business-news/demonetisation-will-lead-to-six-months-of-chaos-ex-rbi-deputy-guv-chakravorty/story-GbZaYU4zckCClqVHaflERK.html
Forbes’ Nazreen Kamali on Rupee Whiplash: http://www.forbes.com/sites/naazneenkarmali/2016/11/24/india-reels-under-modis-rupee-whiplash/#5797df8e596f
Trumping Black Money by Suyash Rai: An Excellent Economic Analysis on Black Money and Demonetization (this is the probably the kind of piece I would have loved to write if time had permitted): https://ajayshahblog.blogspot.in/2016/11/trumping-black-money.html
Surgical Strikes on Rs. 500/1000 notes: https://ajayshahblog.blogspot.in/2016/11/surgical-strike-on-old-rs5001000-notes.html
Kaushik Basu on BBC: http://www.bbc.com/news/world-asia-india-37970965
Harvard Professor Larry Summers called “India just made a big mistake with its currency ban”: https://www.washingtonpost.com/news/wonk/wp/2016/11/22/india-just-made-a-big-mistake-with-its-currency-ban/
Gita Gopinath from Harvard + Kerala CM Office: https://www.project-syndicate.org/commentary/india-tax-evasion-demonetization-by-gita-gopinath-2016-11
Shankar Aiyar on What Next with advice for the Center and States: http://www.newindianexpress.com/opinions/columns/shankkar-aiyar/2016/nov/20/cash-crisis-who-to-blame-can-wait-what-must-be-done-cannot-1540513.html
A Quora Thread on Demonetization that can link you to the opinion you want to choose 🙂 : https://www.quora.com/What-do-economists-think-of-demonetization-of-%E2%82%B91000-and-%E2%82%B9500-notes-How-much-help-could-it-be
All the academic discourse, political viewpoints, op-ed, policy pieces and reportage on demonetization points to a few facts accepted by most writers and analysts:
- The objective of rooting out black money is laudable, as Aiyar says.
- The policy to root out black money needs to target the issues of money in politics, tax reform, legal reform, tax administration, real estates and benami property, gold, hawala and parking money in tax havens.
- Demonetization can also play a role in curbing black money but it is a step of coercion. However, it should have been the last step. Not the first step at all.
- The implementation of demonetization has been appalling and unplanned.
- Daily amendments to the 8th November notification of demonetization percolates with great difficulty across the country and only weakens the trust in the banking system and government. (There have been 11 in 17 days)
- A demonetization economy that converts unaccounted money to legitimate money has come up and is thriving.
As a result, there has been widespread opposition across the country. One response has been subject to particular objection where I live, in the city of Delhi and on Indians living on national/international social media. It is as follows:
Why is Arvind Kejriwal taking the stand of opposition to demonetization in the tone, manner and content that he is? Why is the anti-corruption crusader ex-IRS officer Magsaysay Award winner and possibly only one of a few Chief Ministers without black money taking a stand against demonetization? Why are the most well known corrupt and convicted politicians silent and he’s on a road of confrontation?
Now comes the opinion in my piece. I hope you do read it even if you’re from a different political party, ideology or worldview.
Arvind Kejriwal has stood by the common citizen and the people of this country whenever it was necessary to do so. He has always protested and fought the establishment (business, mafia, money, politics) whenever he has had the chance and opportunity. His anger and fight against the establishment knows no demographic variable like religion, caste, gender, race, and creed and is not governed by political parties.
Arvind Kejriwal protested and exposed the land-grab quid-pro-quo of the deal between Robert Vadra, son-in-law of the Indian National Congress President Sonia Gandhi. He was initially loved by the BJP. Now, not so much.
During the movement of India Against Corruption, he refused advice from senior leaders of IAC like Kiran Bedi and now Union Minister VK Singh who asked that IAC concentrate on the Congress leadership only. He protested against BJP leaders as well at the cost of losing friends from the movement. For him, it was India Against Corruption, not India Against Congress. That, along with the dream of changing the political establishment, ushered in the Aam Aadmi Party.
After forming the government in Delhi three years after coming to government in Delhi with a resounding unprecedented mandate, he has registered 4 cases against Sheila Dikshit in the CBI, Delhi Police and Anti-Corruption Bureau on the misuse of public office and financial corruption indulged by former Congress chief Minister Sheila Dikshit in the Commonwealth Games and the Delhi Jal Board. The CBI, Delhi Police and ACB are now all under the BJP Modi Government whose illegal usurpation is something that the Delhi Government is fighting a constitutional case in the Supreme Court.
He has removed 3 Cabinet Ministers (Asim Ahmad Khan, Jitender Tomar and Sandeep Kumar) from his own small cabinet of 7 when allegations of impropriety, forgery, corruption and criminal behavior came to the forefront. He held himself and his government to a higher standard of morality than purely sticking to legality when he could have used the precedent of 20 Union Ministers who currently face serious criminal charges and are safe in their cocoon of the Modi Government.
Demonetization, on paper, had a laudable goal. If it was well implemented and preceded and followed with other policy decisions that curb black money, you would not have heard a word from Arvind Kejriwal, the Aam Aadmi Party or me. We would have supported it like we have supported Swachch Bharat Abhiyaan or the International Yoga Day or the goal of Ease of Doing Business.
For example, do you know that the Delhi Urban Shelter Improvement Board (DUSIB) has created thousands of toilets (>7000 on last count) in the last 1.5 years as part of the Swachch Bharat Abhiyaan and has been declared as one of the best urban bodies working in it.
Link: http://www.millenniumpost.in/NewsContent.aspx?NID=324571
Did you know that the Make in India Advertisements that tout India as a great place to do business have half a page of achievements that are just done by the Delhi Government in its reform of land registry offices, electricity and water utility companies, making it easier to build houses, acquire land and most importantly, tax reform that has ended license and raid raj, made all tax services online and brought registration of shops to 1 day and all trade/businesses to less than a week. And we are continuously improving processes on a monthly basis. All to make Delhi better, which makes India better, which quite frankly makes Prime Minister Modi look better.
So, it’s not as if there is no precedent for our support to Prime Minister Modi.
However, aren’t you curious as to how BJP leaders deposited large sums of cash just before the demonetization announcement?
Aren’t you curious as to how BJP leaders procured large swathes of land in Bihar just before the demonetization announcement?
Is this information asymmetry legal or just? Why shouldn’t a small trader or businessperson or common citizen like you know about demonetization when others could?
We can keep talking about the nomenclature and accounting standards used when banks say loan waivers, loan write-offs or non-performing assets, but aren’t you curious how the timing of the big bang of demonetization comes at a time when several big industrial loans are being written off? Why is it OK for loans not paid back by corporates are called non-performing assets at best and are written-off at worst? Why are farmers with usurious loans given nothing but poverty at best, and suicide at worst instead of loan write-offs?
Aren’t you curious about prior knowledge of many corporates of this announcement and the fast adjustment that their businesses have undertaken? Why does the limited cash being printed not go to Bihar or Uttar Pradesh or Jharkhand where digital cash payment penetration is low and instead goes to Big Bazaar. This is collusion at worst and brainless policy implementation at best.
Aren’t you curious about the Birla-Sahara papers, which haven’t been reported by most mainstream media, which give clear money trails of bribes as black money to political leaders and Chief Ministers of various states including the Gujarat CM of 2012, who is now our Prime Minister? Here’s a link for you if you’re interested in reading: http://thewire.in/80492/birla-sahara-files-link-gujarat-cm-cms-alleged-payments-2012-2013-14/
As usual, they become news only when Arvind Kejriwal took it up in the Delhi Assembly and that too reported as an allegation of AAP without virtually no media house investing in investigative journalism because their management came in between. Unlike 2012, when the media could ignore Arvind, they can’t do so anymore.
Isn’t this media silence and political non-engagement of other parties similar to the Robert Vadra land-grab case in 2011 when no one went after the Congress first family except for Arvind Kejriwal and India Against Corruption. It later became fashionable in 2013/14 when Congress’ political defeat was inevitable.
Remember, we are fighting the establishment. Always. It happened to be Congress in 2013 and the BJP in 2014. For us, they are one invisible indivisible party on many policy issues.
With this narrative, isn’t the same story repeating itself? Makes Arvind the hipster politician ahead of his times no? 🙂
Ok. Just kidding to make this a little less dense. Forget the politics if it offends you too much.
Think about your fellow citizens.
It would take a very hard and inhumane person to ignore the suffering that this questionable decision’s poor implementation has caused to life and property. Lakhs of jobs have been lost whose full estimate will take years to calculate. The Rabi farming season is on the way to be destroyed. Laborers are being laid off and migrating back to villages. The abject poor, daily wage laborers, farmers, vegetable Mandi traders, common traders, businesses, who have no access to cash or bank accounts are being coerced into finding commission agents who can change their money in return for their pound of flesh.
While a cashless economy, that is now being cited as a possible positive externality but was never in the original statement of objectives, will reduce or eliminate the cost of cash and cost of corruption but that only be reached through incremental coverage and policy victories over time, not by eliminating it in one fell swoop from the economy and coercing citizens to recalibrate their behavior. That is why former PM Manmohan Singh’s hook of “organized loot and legalized plunder” rung true amidst many individuals, who may have voted against him and the Congress as well.
If that doesn’t appeal to you, think about this. Philosophically, the government is denying you the right to access your own money by declaring a financial emergency when none was required. Isn’t this a denial of your right? Suddenly, all the stories of Internet being banned being equated to curbing free speech may seem less left-liberal and more familiar. The government has yet again put all the blame and burden on common citizens to reform instead of taking the onus on itself to undertake any reform.
What about the time cost of money? What about the cost of replacing money? Remember the simple fact that 86.4% of note value was in circulation of Rs. 1000 and Rs. 500 with 7% and 17.4% of currency in circulation respectively. 18 billion notes have been made illegal and all the printing presses of India can print only 2 billion a month. Leading to 9 months of financial disarray. This is inescapable math that will haunt the country for a while. Is it so wrong to call it a financial emergency?
When this policy based on little rationale and no mathematics is brought to implementation when officials, bureaucrats and technocrats at the Ministry of Finance, Income Tax, Central Board of Direct Taxes, Enforcement Directorate and Reserve Bank of India: past and present, have opposed it and criticized it in writing, is it really wrong to say that this is Modi’s autocratic misgovernance?
You will hear a few stories of blatant corruption, bags of money and truckloads of cash being caught. It will gladden your heart and ease your conscience. Don’t let that drown out the silent and violent screams of millions of people who are suffering today. The costs have outweighed the benefits several hundred times over.
It will feel like the government has finally caught the old Bollywood-style 70s anti-hero who has trucks and ships of cash. And yet, that’ll be an insignificant number and quite probably selective and vindictive.
Arvind Kejriwal didn’t respond impulsively when demonetization was announced. He studied the policy, its rollout plan and its impact on the national economy and its impact in Delhi. He saw the evidence of corruption within the BJP and other parties and companies/corporates, which readjusted company policy and received tangible benefits in the chaos after announcements. He wants to ensure that the country’s people don’t suffer. That is why he takes it to the street where it empowers people to voice their anger with opposition, and also, admittedly, makes quite a few people uncomfortable.
It would be easy for him to make a nice video and use excellent punchy catchphrases in English that would make Twitter abuzz and Facebook liven up at his charisma like Tharoor or Manmohan Singh.
However, in absence of a national moral opposition or force which can scale mobilization against the establishment (like Gandhi or Jayprakash Narayan) and without a strong unified political opposition (like Vajpayee/Advani or Sonia Gandhi), he has to take that confrontational stand against the establishment at scale.
Finally, having intentions or morals or values is not enough. It is useless if he takes a moral and truthful stand and doesn’t organize to fight for his idea of India. But he does, and that’s the point.
Aam Aadmi Party is the only political outfit that has been formed without being steeped in politics of identity. The Indian National Congress dominated India’s politics for decades because they were the party that got India Independence.
Every political party that has become powerful in our states or nationally have come up because of some identity that they empower in their state or region. These are language (linguistic reorganization: Andhra Pradesh etc.), region (state reorganization: Jharkhand etc.), caste (BSP, DMK etc.) and religion (BJP, Shiv Sena) or combinations of these factors.
However, AAP has no pigeonhole of identity or class that it has at its core. This makes vote prediction or vote bank politics almost impossible, but having no baggage of ideology, dogma, identity or political philosophy also ensures that AAP doesn’t have to think of itself as pro-market or pro-people. It can be both. That is why it scales tremendously in Delhi, Punjab and Goa: three states quite unlike each other or any other.
All these reasons combined are why the anti-corruption crusader protests this move, which was supposed to hurt corruption but hurts peoples’ lives.
Because logic and policy demands that he do so.
Because the nation requires the opposition to have a name and a face.
Because the voiceless deserve a voice, which sometimes is taken over by small online polls on mobile applications.
He has to speak to a huge majority of this country in a manner, tone and argument method that can be understood by everyone. Not just the ones on social media or the upper class educated elite. So, at times, it is at odds with the worldview we, reading this message on a mobile phone, tablet or laptop have.
Where do we go now? What next?
The Union Government, all State Governments and their executive arms will have to think of innovative policies and implement them at scale very quickly to reduce the blow to the common person.
The Delhi Government, for example, has allowed payment of taxes, fares and tariffs related to any arm of government like VAT department, electricity, water and so on, in the old notes to ease the time frame in which the Government of India will hopefully figure out the issues in the implementation of demonetization.
Silently, our party volunteers who can make the Bernie Sanders campaign look lacking in enthusiasm, have formed parallel task forces to ease tensions at banks and ATMs providing water and tea in many states across the country.
We have kept this development in mind while innovating and redesigning policy in order to lessen the impact on those bearing the brunt the most: laborers, farmers, common citizens, daily wage earners, traders, businesses, middle-class citizens and parents.
However, we will protest on the street and every form of communication like media and social media against demonetization.
Because freedom of speech and expression is still a fundamental right in India and we cherish it.
Because AAP and the Indian Constitution were founded on the same day the Indian Constitution was adopted for the Union of India, and we will fight for the ideals that our birthday-sharer, this sacred Indian constitution, represents.
Because being against the establishment and its policies is not the same as being against the people.
Because AAP has to and will continue to fight for our idea of India.
Finally, regardless of your personal or political view on whether it’s a good step or bad, whether its implementation was good or bad, whether the intent was good or bad, whether coercion or co-opting citizens is a better policy model, or whether other policy steps like tax reform, criminalizing tax evasion, eliminating political black money, illegal Hawala, gold and benami property or strong IT and tax administration should have taken precedence over demonetization, ensure that your political or personal view doesn’t come in the way of you being humane in the society you live in.
I am taking the liberty of sharing a song I received on WhatsApp on Demonetization and its effect on the common citizen. It is set to the tune of Kisi Ki Muskurahaton pe ho Nisar, which starred the timeless Raj Kapoor and was sung by the eternal Mukesh. This message is not one that encourages or wants you to take political sides but definitely wants you to take a humane stand.
Spend few minutes to listen to the song and give some thought to all the abject poor, farmers, common businesses and middle-class citizens and citizens who don’t have bank accounts and/or who suffer extraordinarily because of this decision and/or don’t have alternatives to access their own extremely limited cash flow or liquidity and/or don’t have someone to get their cash for them and/or are not from the digital payments generation chanting plastic money, cashless payments or mobile wallets as the prime outcomes of this policy. Think of them for 10 minutes. And then hold the view that you comes to you.
Now, you may disagree with some, most or all of what I said above. You are obviously free to do so, but if you please, I’d love a response at @roshankar if you disagree with the facts, numbers, and opinions or mentioned above.
You don’t necessarily have to agree with this point of view or change yours based on this piece. Rather it is an attempt to communicate our worldview for us to reach a better understanding of each other as Indian citizens. Longer responses may be sent to roshans[at]alumni[dot]Stanford[dot]edu.
Thanks for reading through what I am sure only feels like a long boring sermon.
In solidarity,
Roshan Shankar
An Indian Citizen
Aam Aadmi Party Volunteer
Advisor, Delhi Government
My Experiments with Politics and Policy In India 