Demonetization May Ring Death Knell for Narendra Modi

Currency Notes Demonetized in India
Currency Notes Demonetized in India

As millions of people stand in long queues everyday to get their old currency notes exchanged for new ones, banks and post offices are not able to handle the swelling demand.

By Rakesh Raman

The demonetization decision of the Indian government has boomeranged. Common people and opposition parties in India are up in arms against the government because the decision to stop the circulation of currency is causing severe hardships to commoners.

The government of India, headed by Narendra Modi, had demonetized currency notes of Rs. 500 and Rs. 1000 on Tuesday, saying that the step has been taken to check corruption and stop the flow of black money.

However, most believe that it was a crude decision of Modi government because people are not able to get their old currency notes exchanged with the new ones from banks and post offices.

As millions of people stand in long queues everyday to get their old currency notes exchanged for new ones, banks and post offices are not able to handle the swelling demand. Even ATMs are empty.

Result: People are not able to buy the routine consumer items, patients are suffering because hospitals refuse to accept old currency, and small businesses have come on the verge of closure as they are not able to sell their products.

While Modi expressed that the demonetization decision has been taken to curb corruption and stop the flow of black money from the system, his opponents refute his claims.

Congress believes that government’s demonetization decision will not deliver the desired results toward checking corruption because most of the illicit money is stored as bullion or invested in real estate or jewelry. Currency notes are not even 15% of the total money in the market.

Plus, opposition leaders indicate that most of the black money that Modi is trying to target is with his cronies and government ministers who were informed beforehand by Modi so that they could save it by investing it at different places.

For example, Arvind Kejriwal – a local politician in Delhi – tweeted to question Modi’s intentions behind the move. He said that with the removal of cash from the market, Modi is harassing poor people such as housewives, grocery shops, laborers, and farmers.

Similarly, Sitaram Yechury of Communist Party of India (Marxist) is upset. He believes that besides harassment to people, demonetization will put brakes on the economy, hurting the poor and the underprivileged. “This government has no plan,” Yechury said in his tweet.

There is a strong view in the Indian political circles that with demonetization, Modi had tried to harm the opposition parties in the upcoming elections in states such as Punjab, Uttar Pradesh, Goa, and Gujarat, as they will not be able to use black money to buy votes.

As Modi took the demonetization step secretly, his party BJP would have converted Rs. 500 and Rs. 1000 currency notes in other forms of wealth to buy votes in the state elections.

But Modi’s ploy is expected to fail. As the unrest caused by demonetization is spreading in all parts of the country, Modi and BJP are the target of harassed people’s anger, which is supposed to harm Modi’s BJP in the forthcoming elections in multiple states of India. This will also affect Modi adversely in the Lok Sabha election of 2019.

By Rakesh Raman, who is a government award-winning journalist and runs free school for deserving children under his NGO – RMN Foundation.

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Rakesh Raman