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Modi speech live: PM rolls out slew of reforms, schemes to benefit rural poor

Dec 31, 2016

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Prime Minister Narendra Modi will address the nation on Saturday, in which he is expected to spell out the roadmap ahead after the expiry of the 50-day period for depositing of demonetised notes. “Prime Minister Narendra Modi is likely to address the nation before dawn of the New Year,” sources told PTI.

This will be his second address to the nation since his announcement in a similar address on 8 November to scrap Rs 1,000 and Rs 500 notes.

While announcing the landmark decision, he had asked the people to give 50 days for rolling it out.

Against this backdrop, the Prime Minister may speak about the roadmap ahead, especially on the steps to ease the cash flow that has been a major problem ever since demonetisation took place.

He may also speak on the steps to deal with the problems the economy faces after the demonetisation.

Prime Minister Narendra Modi. AP

Prime Minister Narendra Modi. AP

The prime minister in his public meetings in the last few weeks has been urging the people to bear with the pain following the government’s decision and that it would start easing gradually once the 50-day period is over.

Modi also accused the Congress leadership of “desperation” in the face of his “tough” demonetisation decision and said it was the first time that a concerted effort was made by the Opposition to “openly” protect the dishonest through disruptions in Parliament.

He also slammed Manmohan Singh, who had described demonetisation as a “monumental mismanagement” and an “organised loot”, and sarcastically said that his predecessor might have been referring to the “unending string of scams” like 2G, CWG and coal block allocation “under his leadership”.

Modi said while the honest will not be harassed, those with black wealth have “only a few days to hide” and will not be spared.

“I pity a few of our opponenets, especially the Congress leadeship, for the desperation they have been exhibiting…Congress leaders are entirely pre-occupied with only one thing – elections.”

“There is nothing political in the demonetisation decision…It was a tough decision taken to clean up our economy and our society. If I were guided by short term electoral politics, I would have never done so,” he told India Today in an interview.

With regard to the washout of the recent Winter session due to disruptions over demonetisation, the Prime Minister said the government tried its best to keep Parliament functioning.

“I was keen to speak in both Houses. Yet, there was a concerted attempt by the Congress to derail the functioning of the Houses rather than have a proper debate. While opposition in Parliament is understandable, this is the first time it is being used to protect the dishonest and that too so openly,” he said.

With inputs from agencies

First Published On : Dec 31, 2016 20:00 IST

Demonetization: PM Modi criticises opposition for ‘openly protecting the dishonest’, slams Manmohan Singh

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Prime Minister Narendra Modi on Thursday accused the Congress leadership of “desperation” in the face of his “tough” demonetization decision and said it was the first time that a concerted effort was made by the Opposition to “openly” protect the dishonest through disruptions in Parliament.He also slammed Manmohan Singh, who had described demonetization as a “monumental mismanagement” and an “organised loot”, and sarcastically said that his predecessor might have been referring to the “unending string of scams” like 2G, CWG and coal block allocation “under his leadership”. Modi said while the honest will not be harassed, those with black wealth have “only a few days to hide” and will not be spared.”I pity a few of our opponents, especially the Congress leadeship, for the desperation they have been exhibiting …Congress leaders are entirely pre-occupied with only one thing – elections.”There is nothing political in the demonetization decision…It was a tough decision taken to clean up our economy and our society. If I were guided by short term electoral politics, I would have never done so,” he told India Today in an interview. With regard to the washout of the recent Winter session due to disruptions over demonetization, the Prime Minister said the government tried its best to keep Parliament functioning.”I was keen to speak in both Houses. Yet, there was a concerted attempt by the Congress to derail the functioning of the Houses rather than have a proper debate. While opposition in Parliament is understandable, this is the first time it is being used to protect the dishonest and that too so openly,” he said. On Manmohan Singh’s attack, Modi said, “it is interesting that the words ‘monumental mismanagement’ come from a leader who has been at the helm of India economic journey for around 45 years.”His reference to ‘organised loot’ was perhaps a reference to the unending string of scams under his leadership, from the coal scam to the 2G and CWG scams. Demonetization on the other hand is an unprecedented step to confiscate the loot of the corrupt.” Asked whether demonetization will end corruption in the political system, the Prime Minister said “decisive ways” were required for that. “There is a need for reforms in the political system,” he said. He said before the Winter session, he had suggested that there should be discussion in Parliament on reform of the political system and electoral reforms but this could not happen due to disruptions.Rejecting criticism that the demonetization decision was political, it was taken not for “short-term windfall gains” but for long-term structural reforms. “Earlier the Income Tax department used to shoot in the dark. Now people have voluntarily come forward and deposited money. Now the Income Tax department has specific information,” he said. Asserting that his government has “zero tolerance for corruption”, Modi said the dishonest will be punished and the taxes collected from them will be routed for welfare programmes.He said the demonetization will deliver a “multiplier effect” to clean up the economy in the long term. “Black money is now traced. It will not remain anonymous anymore… The dishonest have only a few days to hide…The government the time, means, and most importantly the will to seek them out,” he said. Regarding the frequent modifications after demonetization was announced on November 8, the Prime Minister said, “one must be able to distinguish between ‘niti’ (policy) and ‘ran- niti’ (strategy) and not put them in the same basket.”The decision of demonetization, which reflects our ‘niti’, is unequivocally clear, unwavering and categorical. Our ‘ran-niti’, however, needed to be different, aptly summarised by the age-old saying of ‘Tu Daal Daal, Main Paat Paat’ (keeping pace with the adversary). We must take two steps ahead of the enemy.”He said when problems are identified, “we respond promptly and take necessary steps. Far from indicating poor implementation, this speaks of our agility in responding quickly and keeping up with the evolving situation.” “I know many will prefer if we issue one guideline and then allow them to walk roughshod over it. Let me assure them that no such thing will happen.”Issuing the “most dire warning” to black marketers and the corrupt, Modi said, “if the enemy runs, we will chase them. If they change their tactics, we will change ours. When the corrupt find new methods of cheating, we will identify new methods to clamp down on the same.”

Demonetisation not politically motivated, says PM Narendra Modi ahead of 50-day deadline

With just a day left for the 50-day deadline for demonetisation’s benefits to show, Prime Minister Narendra Modi has claimed that the move has forced black money, whether belonging to corrupt politicians or bureaucrats, out in the open.

In an interview with India Today magazine, excerpts of which in text form were telecast by a group news channel, Modi said counterfeit Indian currency notes available with the enemies were instantly neutralised.

“Black money has been forced out into the open, whomsoever it may belong to, whether it is corrupt politicians, bureaucrats, businessmen or professionals,” said Modi on the outcome of his 8 November sudden move to demonetise Rs 1,000 and Rs 500 notes.

“Counterfeit notes, which our intelligence agencies have reported to be available in big volumes with our enemies, have been instantly neutralised. Similarly, cash held by terrorists, Maoists and other extremists has also been neutralised. There has been a crippling impact on dangerous and highly damaging illegal activities such as human trafficking and the narcotics trade as well,” he added.

PM Narendra Modi. File photo. PTI

PM Narendra Modi. File photo. PTI

“One must be able to distinguish between neeti (policy) and rann neeti (strategy) and not put them in the same basket. The decision of demonetisation, which reflects our neeti, is unequivocally clear, unwavering and categorical,” the prime minister said.

“Our rann neeti, however, needed to be different, aptly summarised by the age-old saying of tu daal daal, main paat paat. We must stay two steps ahead of the enemy. When problems are identified, we respond promptly and take necessary steps,” he added.

Modi said it speaks of the government’s “agility in responding quickly and keeping up with the evolving situation”.

“I know many will prefer if we issue one guideline and then allow them to walk roughshod over it. Let me assure them that no such thing will happen,” Modi said.

The prime minister also clarified that the objective behind the decision was to clean up the economy and curb the menace of black money.

“Our objective was to clean up the economy and society of the menace of black money, purging the distrust, artificial pressures and other ills that came with it,” he said.

“The revenue collected will be used for the welfare of the poor, downtrodden and the marginalised.”

Modi also urged citizens not to regard digital transactions as a short-term substitute for cash payments.

“Digital transactions should not be viewed as a short-term substitute for cash payments,” Modi told India Today magazine in an interview.

“Digital transactions facilitate formal accounting and sizing of the economy,” he said.

“They also deliver greater tax compliance,” he added.

On former prime minister Manmohan Singh, Modi said, “Regarding Manmohan Singh ji, it is interesting that the words ‘monumental mismanagement’ came from a leader who has been at the helm of India’s economic journey for around 45 years.”

“His reference to organised loot was perhaps a reference to the unending string of scams under his leadership… From the coal scam, to 2G and CWG scam. Demonetisation on the other hand is an unprecedented step to confiscate the loot of the corrupt,” he said.

“I pity a few of our opponents, especially the Congress leadership, for the desperation they have been exhibiting. Congress leaders are entirely preoccupied with only one thing — elections. There is nothing political in the demonetisation,” Modi said.

The prime minister said: “It was a tough decision taken to clean our economy and our society. If I were guided by short-term electoral politics, I would have never done so.”

First Published On : Dec 29, 2016 21:32 IST

You can’t make foreign policy based on domestic political issues: Shivshankar Menon

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Your book talks about choices and a remarkable continuity of foreign policy during the tenure of three PMs – PV Narasimha Rao, Atal Bihari Vajpayee and Manmohan Singh. In your assessment, does this continuity still exist? And how necessary is continuity for the country’s foreign policy?I think all these three PMs had a similar approach to foreign policy. Their goal was to transform India, to make it a modern state. Also because that was a particular period when globalisation, open international trade and economics dominated the scene. Now the context has changed. But in practice, fundamentals of policy have remained the same. If you look at what this government has been doing – towards US, China, Russia and Pakistan, it has tried similar policies. But because the context has changed, the results were different. Today when you see tensions in relations with China, stress in relations with Pakistan, it is partly due to the changed context. Their behaviour has changed. We are at a very delicate stage as far as our foreign policy is concerned. I don’t think we can go on doing what we had always done.You have a history of dealing with China in the Indian foreign policy setup. Since relations with China warmed up in 1988, there had ensued an era of peace and tranquillity. Is there a shift in India’s dealings with China now? Should we attribute it to Chinese resurgence or India’s confrontationist attitude? What has happened with China is that the modus vivendi which we had worked out and formalised at the highest level when Rajiv Gandhi visited and which lasted for 30 years has changed. Our understanding was that we would discuss our differences, the boundary question, etc but we would not allow them to impede normal relations. We did trade, we did exchanges. We now have $72 billion trade; we cooperated where we could externally at the WTO Doha round, climate change, etc. That modus vivendi has broken down. Both countries have also changed.For instance, when we started economic reforms, the share of external economy (merchandise trade) to the GDP was a mere 14% . By 2014, it was 49.3%. Now that means our dependence on the external world is more. Today we have a real interest in freedom of navigation in South China Sea. China also has real interest in South China Sea. But that is a new phenomena. Both are major trading nations and it is in the interest of both to keep the sea lanes free and open. China says they are our waters. So there is an issue. You need to recalibrate the relationship. Look at China’s relationship with Pakistan today. In 1996, President Jiang Zemin told the Pakistani National Assembly that you should do with India what we do. Discuss differences, but do not let it affect the rest. Today it is reverse. China is investing $46 billion in Gwadar and the China Pakistan Economic Corridor (CPEC). There is a problem today. Only thing we can do is sit together and discuss how we can respect each other’s core interests. And if they overlap or there are differences, how to manage them.Recently US President Elect Donald Trump announced that his administration would walk away from the Trans-Pacific Partnership (TPP) Agreement, which means abandoning the Asian pivot as well, of which India was sheet anchor. How will it affect Indian interests?Trump has come to power on a pledge to disengage from the rest of the world, which we may call deglobalisation. On the TPP he always said he would not support it. But it is too early to say how it is going to work out. Trump has already surprised people by speaking to the Taiwanese leadership. He has the potential to be quite disruptive, but politicians don’t always implement what they promise during campaigns. Let us see.Why is India making an issue of the South China Sea when it is nowhere close to its neighbourhood? Especially as other East Asian countries bordering it are locked in security and economic partnership with China and brokering peace.I don’t think we are in confrontation. Some years ago, we had offered China a dialogue on maritime security, which would include all these issues such as our interests in the South China Sea and the Chinese presence in the Indian Ocean region. They are also interested in freedom of navigation in the Indian Ocean. Their oil also comes through Hormuz and Malacca Straits. We have new issues at hand. We need to discuss, obviously, the CPEC. Different countries have coped in different ways with the rise of China and with the change in balance of power they see around them. For us, Look East was a response to this, and now it has transformed into Act East.Can you bring some clarity to ‘One Belt One Road’ (OBOR), of which CPEC is also part. Does it make sense for India to stay out?My own personal view is that as long as the road is open for everybody to use and is in your interest to promote trade and commerce, there is no harm. If parts of OBOR work for you, use them. The parts which don’t work, and are actually offensive to your interests like CPEC, as it goes thorough Indian territory, you should oppose quite clearly. Other bits like ports, railways or pipelines that serve India’s interests , use them. But we must insist that the initiative is open to everybody and not exclusive; that no conditions are attached to it and is purely an economic initiative.The CPEC frankly doesn’t make economic sense. I read in Chinese newspapers that the pipeline along CPEC carrying oil will be 16.6 times more expensive than carrying oil by sea or by another road to China. It doesn’t make any economic sense, keeping in view the transport and railways passing through the world’s highest mountains and most insecure and difficult terrain. The port of Gwadar is next to Karachi. With all these factors, the immediate suspicion would be that it is for other purposes like military and strategic purposes, to project power in the Indian Ocean. So for me, CPEC is a problem. Indian government has made it clear why it has reservations about it.But if CPEC or OBOR aids development of the region, isn’t that in India’s interest?Again, if it works for the people, for development, we should use it. Look, we could run a bus between Srinagar and Muzaffarbad across the line, in the most heavily militarised territory with all the backlog of politics and whatever. You can find ways to make people’s lives easier. That is the responsibility of governments. But that doesn’t mean you give up your stand. Governments should not make people’s lives difficult.Coming back to the Sino-Indian border dispute, is there really a dispute? As per old census records, in 1891 the area of Jammu and Kashmir was 80,900 sq miles; in 1911 some 84,258 sq miles; in 1941, it came down to 82,258 sq miles and suddenly as the border dispute arose in 1961, the area was raised to 86,024 sq miles. Why these discrepancies and the logic behind the suddenly increased area?The fact is that until 1954, Survey of India maps used to show the border in the Western sector with Aksai Chin as an undefined border. At different stages people had different ideas. From our side there might have been a lack of precision. But let me tell you there was absolutely no Chinese presence in the region till 1950. By then they had come to Tibet and not to the border. We were consistent after that. Frankly, as I describe in the book, China manufactured a case. They didn’t say they had a problem until January 1959. I think you need to look at both sides. We were a new government; it took us time to figure out.But A. G. Noorani in his book, India-China Boundary Problem, has documented that under Jawaharlal Nehru, old maps were discarded and burned at the Ministry of External Affairs to create a case for a border dispute?You need to look at what happened in a context. This is why foreign policy is about choices. If you look at newly Independent India, there were plenty of problems – looking at refugee issues, the consequences of Partition, fighting a war in Kashmir with Pakistan, trying to integrate the states till 1958, etc. The settling of border issue was not number one priority in those conditions. The remarkable thing is that Nehru turned his attention to these problems and attended to them in the middle of all the things that were on his plate. I think it was remarkable. He showed the sense of history and the importance of these things. It is wrong to then say why they did this, why they didn’t do that. That would be unfair.The acid test of our foreign policy has been dealing with Pakistan. You seem too pessimistic that nothing can happen on that front. Frankly there are intuitional and structural issues in Pakistan that don’t allow it to have a normal , stable and predictable relationship with us. For me that is the root of the problem. We tried repeatedly and we had come quite close many times like in 2005. It is not that we don’t know solutions. We know how to move forward. But there are very strong forces, as I have mentioned in the book. We are actually dealing with many Pakistans. The ordinary Pakistan that includes civilians, businessmen, politicians have no animosity towards India. They are friendly. We spent three years there, made a lot of friends. As a family we were very happy there. But that is not all of Pakistan. There is the Pakistan of the establishment, of the ISI, jihadi organisations, religious right, etc. They have their own views. I don’t think they will permit a normal stable relationship. As long as they have power, as they have in the present chaos in Pakistan, they will not allow a relationship to grow. That is the source of my pessimism. I believe we should deal with different Pakistans differently.Is there a possibility of creating a constituency for peace?We cannot affect the balance of forces within Pakistan. We cannot structure Pakistan. Some world powers have tried , but failed. I am relatively pessimistic in the short term. In the long run, if one starts being rational towards your own interest, it will make peace. But there re are elements there which are very powerful, who will not permit it in today’s circumstances. That is why I am pessimistic.The peace process, you mention under your supervision which had reached a stage of breakthrough had devised a way to find a people centric rather a territory centric solution. Is there any way to pick up threads?Exactly, Dr. Manmohan Singh used to say make border irrelevant and minimise hardships to people. Yes, we did find ways. Whether it was bus, trade across the LoC. But resistance is there. It is a battle that has to be fought every time. I am sure we can reconnect threads. But the primary block is configuration of forces within Pakistan.You held the top security post in the country as NSA after a wealth of experience in foreign affairs, especially so in the neighbourhood. Does unpredictability in foreign policy help achieve goals?If you look at India as an actor, we have grown from the 10th largest economy to 3rd largest economy in the world from Vajpayee’s time. We have an interest in the way the world works. We did well out of globalisation. We are reformers. I cannot say that the present world order is perfect or ideal. But we have done well out of it recently. Now unpredictability is an insurgent tactic. It is a tactic for those who want to draw attention. India doesn’t have that problem. You have a challenge in running the system . For me unpredictability is a tactic, which captains and majors do. Yes deception, surprise, and shock at tactical level can work. But when it comes to strategy, unpredictability is not a good thing. People should know your red lines and core interests. You were the custodian of India’s nuclear arsenal as well. The element of unpredictability in our nuclear doctrine has not worked well. It has not even deterred or helped us change the security system to our advantage.What was our nuclear weapons designed for – it was to deter people from threatening us. That has worked. It was never designed to be used in wars or to stop terrorism. If you start saying nuclear weapon should do all these functions, then you say it has failed. But for me it has succeeded for its declared purpose. They are not war fighting weapons. You know the affect they can have. And with Pakistan, frankly in our case there is a three minute warning time. We are next door to each other. If you are bombing Pakistan, you are bombing yourself keeping in view the direction of winds etc. You have mentioned in the book, that when you went to meet Left leaders, they had congratulated you for the conclusion of Indo-US nuclear deal. But later they opposed it to the extent of attempting to bring down the Manmohan Singh government?We had met all the 12 conditions as laid down in public. They never expected it. They were surprised. Every party, not only the Left, later took position keeping in view their domestic constituencies and political calculations.Political argument was that you are becoming allies of the US. They took positions that suited them domestically . See the BJP, when they were in power previously, they started it. When they were in Opposition, they opposed it. And when they are back in power, they again started it.Increasingly foreign policy issues are being played in domestic politics. Is that tying the hands of governments to devise a long-term and an effective foreign policy?Let me put it in this way. Foreign policy has always been part of domestic politics in India. Pakistan policy has always been. If you look at China policy, Vajpayee made a reputation during his initial days by raising issues related to China. Through the 60s policy towards US has always been divisive . That is good. You must debate what is good for you. But today, foreign policy is being used for domestic proposes for the first time to an extent that it is worrying. You must determine foreign policy to India’s interest and not to a political party’s interest or a leader’s interest or a government’s interest. That is why I have mentioned that when we did the boundary agreement with China, Narasimha Rao insisted on going to talk to all Opposition leaders, right through the negotiations. You are doing India’s work, not Rao’s work or Congress party’s work. Discussion and dialogue are necessary, but I don’t think you make foreign policy on the basis of domestic political issues.You drafted much criticised Sharm ul Sheikh joint statement with Pakistan, which for the first time mentioned Baluchistan. Do you feel vindicated now, since this government has taken up the issue so vigorously?(Laughs) Well, I feel like laughing. But what can I say? I studied history in university. So I have taken the view that in the long run history will take a better view of these things. It was a moment, there was great optimism for a breakthrough. Criticism of this statement was aimed at addressing domestic politics. There was not a word about Kashmir in that statement. That was unprecedented. After the statement was issued, Pak PM Yusuf Raza Geelan came out of the room and on the stairs, the whole Pakistani media attacked him. And you should have seen his face, he was shaken. But when attacks started in India, then they thought it is Pakistan’s victory. Nobody had time for substance. As I said, everyone had their own agendas . It is interesting how history works. We were criticised for bringing the issue of Baluchistan in India-Pakistan discourse. But now they think, it is an important element in the discourse.

Demonetisation: Was RBI given time at all to think? Manmohan’s question is pertinent

Former prime minister Manmohan Singh, a distinguished economist and former RBI governor, has raised one more pertinent question: Was the Reserve Bank of India given enough time to discuss the demonetisation before the announcement was made?

According to a report in The Indian Express, he has raised the question at a meeting of the parliamentary committee on finance, which is studying the government’s decision to demonetise Rs 500 and Rs 1,000 currency notes from 8 November.

The committee met on Thursday under the chairmanship of Congress leader M Veerappa Moily. Singh is a member of the panel.

The report quoting a panel member said Singh citing a note from the central bank said the government took the decision on 7 November and the RBI board on 8 November. Singh was of the opinion that the panel should be first listening to the government and then the RBI governor.

Manmohan Singh. PTI file photoManmohan Singh. PTI file photo

Manmohan Singh. PTI file photo

Governor Urjit Patel was to brief before the panel on 21 December. This was postponed and, according to a PTI report, the briefing will now happen on 19 January. The decision to postpone is probably in keeping with Singh’s advise.

Singh had earlier criticised the demonetisation in the Lok Sabha saying that demonetisation is “organised loot”, “legalised plunder” and “monumental failure”.

“It is no good that every day, the banking system modifies rules and conditions. This reflects poorly on the office of the PM, finance ministry and the Reserve Bank of India. I am very sorry that the RBI has been exposed to this criticism,” Singh had said then.

His views assume significance in the backdrop of criticism that the RBI has failed in anticipating the problems that is likely to crop up after the note ban and also handling the situation effectively. Many experts are of the view that this has affected the credibility of a key democratic institution that has remained autonomous and largely escaped arm-twisting by the political class of the country.

The RBI and the finance ministry together have put out more than 60 notifications and orders in about 45 days of demonetisation. This in itself is a proof that the central bank was unprepared for a move with such large scale ramifications. The frequent rule change has not only put the banks in difficulty but has aggravated the pain of the common man.

However, even more shocking is Singh’s revelation at the panel meeting that the RBI was given just one day to take the decision on demonetisation. This claim raises many questions.

Does this mean the government took a hasty decision and forced the RBI to do so ? If that is so, it means the government or the RBI had not done any ground work before announcing the decision. Or was it just a last-minute hurry after taking most of the decisions earlier? When was the RBI first informed about the impending note ban? Was it kept in dark too about the decision until the end?

If it is so, it flies in the face of the government’s claim that it has been preparing for demonetisation for many months. In fact, prime minister Narendra Modi had in a speech (watch here) claimed that it started 10 months back and had to be kept a secret fearing the tax cheats would have found ways to whiten their ill-gotten wealth.

The public has been going through unprecedented difficulties due to the cash crunch, a direct consequence of the demonetisation. While the ban sucked out Rs 15.44 lakh crore worth of currency notes in circulation, the government and the RBI have been able to pump only about one-third of the money back into the system. The public has a right to know why there is still a cash shortage. It is to be noted that the central bank or the government has not yet given a status report of the printing of notes, especially that of Rs 500.

If the RBI was given only a day to take a decision, as Singh has said before the panel, that probably explains why the authorities were not prepared for the move. The note from the RBI has to be made public at the earliest.

In fact, the government and the RBI should make public all documents and files related to the decision. It is all about transparency of governance, which PM Modi is committed to.

First Published On : Dec 23, 2016 10:31 IST

Now he has spoken, there will be no quake, PM Modi mocks Rahul, criticises Manmohan, Chidambaram

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Prime Minister Narendra Modi on Thursday mocked at Congress Vice-President Rahul Gandhi, saying that the latter was “learning how to make speeches”. He was speaking in Varanasi on Thursday, his first tour of his parliamentary constituency in poll-bound Uttar Pradesh, since demonetization. His speech was closely watched, since it came a day after Gandhi accused him of accepting kickbacks from corporate houses when he was Gujarat Chief Minister.Modi, without naming Gandhi, replied to the allegations with sarcasm, saying: “It is good that he has started speaking. In 2009, you couldn’t even tell what is in this packet. Now we are finding out…Since the time he has learnt how to speak, I am the happiest,” the Prime Minister said. “There would have been an earthquake had he not spoken… good that he has started speaking, we now know that there’s no chance of an earthquake,” he chuckled to his audience. We now know that there is no chance of an earthquake.” Modi didn’t even spare his predecessor Manmohan Singh, and referred to him by name.”Look at Manmohan Singhji. Do you know he has been in the core team of those in charge of the country’s economy since the seventies? Even he says that in the country where 50 per cent people are poor, how can all these digitisation happen? Now is this his report card or mine? Whose legacy am I dealing with?” he said.”They have a youth leader; he is learning how to speak… Since the time he has learnt how to speak, I am the happiest,” the Prime Minister said. “There would have been an earthquake had he not spoken… good that he has started speaking, we now know that there’s no chance of an earthquake,” he chuckled to his audience.He also attacked the Opposition for stalling Parliament over the currency ban, by alleging that they were trying to “rescue the corrupt”. He even drew parallels between Pakistan providing cover fire to terrorists to cross the border with the Opposition opposing the note ban to protect kala dhan (black money) as well as kale mann (ill-intentions) of many. “Many people say I had not taken into account the consequences of this huge step. In fact, the only thing that I could not take into account was the brazenness with which many political parties and leaders will come to the rescue of the corrupt. But I am happy that this drive, aimed at eliminating kala dhan has exposed so many kale mann,” Modi said.Taking on former finance minister Chidambaram over his assertion that online transactions could not find wide acceptance in India since nearly half its villages were not even electrified, PM Modi said: “Whose faults are he pointing at? Did I uproot electric poles or snap cables in villages which had electricity?”.Referring to Gandhi’s assertion at a public meeting in Gujarat on Wednesday that payments through cards, online transfers etc., would face hurdles in the country due to low literacy levels, the PM ridiculed the previous Congress governments for keeping people illiterate.”I hope he does not say that I had indulged in some sort of black magic to make illiterate those who knew how to read and write. He never thinks before he speaks and he may not have realised that he has admitted the failure of the long reign of his own party.” Calling himself Kashi ka bachcha (a child of Kashi), Modi said: “I am, nonetheless, delighted to see that the power of this holy land has made me work and forced detractors to admit, even if unwittingly, their failures,” he concluded.

Watch | Very happy our young leader is learning how to speak: PM Modi trolls Rahul Gandhi

<!– /11440465/Dna_Article_Middle_300x250_BTF –> A day after the Congress vice-president accused him of receiving crores in kickbacks as the Gujarat Chief Minister, Prime Minister Modi today taunted the former and said that he is “learning how to speak”.‘They have a youth leader; he is learning how to give speeches. Since the time he has learnt to speak, my happiness has no limits,’ he jocularly said at an event in his parliamentary constituency Varanasi in Uttar Pradesh.”There would have been an earthquake had he not spoken… good that he has started speaking, we now know that there’s no chance of an earthquake,’ he added.Silencing his critics, the Prime Minister in an apparent reference to those questioning his government’s demonetisation drive said that he never imagined politicians would “stand with the corrupt”.”The commotion created in Parliament is like the ‘cover fire’ that Pakistan uses to ensure terrorists infiltrate into India. Similarly, the ruckus in Parliament lets cheats get away,’ he said while referring to Parliament’s just-concluded Winter Session.Prime Minister Modi also criticized the opposition for “protesting everything.””Our army makes us proud but some people have questions even on their bravery. Is it good to view institutions like this’” he said.The Prime Minister also cornered his predecessor for his disagreement over demonetisation, saying the latter by doing so is exposing his own misdeeds. ‘(Congress) PM Manmohan Singh said that ‘in a country where 50 percent of people are poor what can things like technology do’’ Now tell me, was he giving his own report card or mine’ Whose legacy is this 50 percent poverty’’ he asked.

Manmohan Singh exposing his own misdeeds, says PM Modi

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Prime Minister Narendra Modi on Thursday took a potshot at the former prime minister Manmohan Singh for his disagreement over demonetization, saying that by raising objections, the latter is exposing his own misdeeds.”When I said things can be managed without cash in the pocket, the former prime minister said how can this be implemented in a country where 50 percent of the people are poor?Now tell me, if he is showing me his report card or mine? This legacy of poor has been provided by whom? I am happy that he has shown his own report card,” said Prime Minister Modi while speaking at the foundation ceremony of Mahamana Pt. Madan Mohan Malviya Cancer Centre here.The Prime Minister then shifted his focus towards former finance minister P. Chidambaram and sarcastically said the latter believes a cashless economy cannot come into form as more than 50 percent of the Indian villages do not have electricity, adding that this was doings of the former regime.”Chidambaram said in 50% of our villages there is no electricity, so how will a cashless economy take shape. Now tell me, have I de-electrified the villages. While criticising Modi, they are presenting their own report card,” said Prime Minister Modi.Commenting on Congress vice-president Rahul Gandhi, the Prime Minister said his speech held no relevance.”Since the time he has learnt how to speak, there is no extent to my happiness. Till 2009, there was no clue as to what is inside the packet (Gandhi). Better that he started speaking, at least we came to know that there is no scope of earthquake occurring,” said Modi.The Prime Minister opined that the opposition’s criticism is actually benefitting them, because by doing so they re exposing themselves and the ‘black heart’ of people is coming to light, in front of people.”Even they don’t know what they are doing. But it is good, because somebody’s black money is getting exposed and somebody’s ‘black mind’ (kaala mann) is uncovered.”Appreciating the support extended by the common man during the period of cash crunch, the Prime Minister said, “I want to tell the leaders of the nation, that we believe in the power of the 125 crore citizens. It is an exemplary example that the citizens are suffering so much, not for their own benefit, but for the nation’s development.”Lashing out at those who criticised the surgical strike and raised questions on the integrity of the armed forces, Prime Minister Modi said the army makes the nation proud, but still people doubt their bravery.”The soldiers go to Pakistan keeping their lives at stake and come back alive but some people have problem with even this,” he said.”Is it good to view institutions like this,” he added.

Demonetisation: Chidambaram may be right in calling note ban a non-reform, but he shouldn’t forget the past

P Chidambaram, four-time finance minister and a senior Congress leader, has been an aggressive critic of Prime Minister Narendra Modi’s 8 November demonetisation drive, much like his colleagues in Congress party such as former PM Manmohan Singh and Vice president Rahul Gandhi. On Tuesday, inaugurating the Prof T D Lakdawala lecture series at the University of Mumbai, with a talk on ‘Twenty five years of Economic Reforms and Challenges Ahead’, Chidambaram escalated his attack by stating that the authors of note ban lacked elementary knowledge of economics.

“Whoever planted the idea of demonetisation should enroll in a graduate school of economics,” said Chidambaram. Chidambaram argues why demonetisation is not an economic reform but a ‘man-made tragedy’. To support his argument that why note ban isn’t an economic reform, the former FM said an economic reform can be defined as a new model whose effectiveness could be measured with its outcomes. “A reform can be judged on the parameters of enhanced output, efficiency and distributive justice,” Chidambaram said.

Senior Congress leader P Chidambram. AgenciesSenior Congress leader P Chidambram. Agencies

Senior Congress leader P Chidambram. Agencies

Some of the landmark reforms of last 25 years Chidambaram picked in his speech include 1991 foreign trade policy, doing away with industrial licences, moving away from fixed exchange rate to a market determined rate, direct reforms, private public partnership, capital market reforms, initiating Aadhaar-based direct benefit transfer.

Chidambaram concludes his reform talk saying the aim of many of these reforms was to end poverty. “Given the capital, the technology and the human resources available in the 21st century, if any country is poor, it is because of its own faults and failures,” said Chidambaram is quoted as saying by the Indian Express. Pro-demonetisation economists will cry foul with Chidambaram terming demonetisation as a non-reform. Note ban critics will cheer him.

Strictly going by Chidambaram’s definition, i.e if a reform is measurable by tangible output and efficiency of implementation, then demonetisation may not qualify to be called as an economic reform. Some of the stated gains of this exercise—rejuvenating the economy by recovering black money, ending corruption involving cash exchange, choking terror funding and as an effective trigger to nudge the society to non-cash transactions—can be evaluated only in the long-term. Reports of fresh cases of black money, fake currency seizure and terror attacks even before the demonetisation exercise over casts shadows on the effectiveness of the demonetisation exercise on these fronts.

As this writer had pointed out in an earlier article, it is naïve to imagine that swapping currency alone would kill illegal cash build up in the system, curb corruption and end organized terror. Also, at this stage, any tangible, meaningful gains for the exchequer out of demonetisation look doubtful considering the massive pain it will inflict on the economy in the approaching quarters.

A 1.5-2 percent slowdown in the GDP on account of cash-ban resulting in paralysis will be a major drag on the economy. The impact of job losses, slowdown in manufacturing and services will have cascading impact across the economy. Apart from the quantifiable impacts, the pain on the common man on account of prolonged cash crunch too should be taken into account when one does the final cost-benefit analysis of the demonetisation exercise. Unless positive results are proven in the long-term, not many can dispute Chidambaram if the former FM refuses to call the note ban an economic reform. It is more of a cleansing exercise and an economic experiment. Till hard results are visible, the fate of Modi’s demonetisation gamble, hangs in balance.

But, the problem with Chidambaram’s Tuesday talk arises where he begins to sermonize on the eradication of poverty as the end result of any major reforms and criticise the failure of the state for its failure to end poverty despite having all tools—capital, the technology and the human resources—at disposal. This is where the Harvard educated lawyer-turned-politician should perhaps also introspect the success of the UPA-regime in the last decade or so to achieve this critical end result. Facts should speak rather than political claims and counter claims. One of the major characteristics of that regime was a phase of jobless GDP growth.

According to a 2013 paper — ‘Joblessness and Informalisation: Challenges to Inclusive Growth in India’–by the Institute of Applied Manpower Research (IAMR), a think-tank of the erstwhile Planning Commission, not only has India witnessed jobless growth during the UPA’s tenure, it has also seen millions pushed to become casual labour with little social security. One cannot deny the link of unemployment trends to the poverty graph.

Between 2005 and 2010, the manufacturing sector saw the loss of 5 million jobs, it said. Also, the services sector, which witnessed 18 million jobs between 2000-2005, added only 4 million additional jobs in 2005-2010. Though the larger consensus is that poverty reduction has been quicker in the three-years to 2011-12 but going by the C Rangarajan panel, the fact is that one third of India (29.5 percent) remains poor, way above 21.9 percent estimated by Tendulkar committee. While there are no accurate estimates of poverty in the country, various indicators show a good number of Indians still lack access to labour, shelter and formal financial system.

This raises a key question. Despite the critical economic reform steps initiated in last several decades and despite UPA initiatives to increase social spending, provide employment through MGNREGS, how far India has achieved the desired results to end poverty is a matter of larger debate. While Chidambaram’s remarks on demonetisation are indeed valid, a counter question to him, thus, is why a significant chunk of Indians still live in poverty despite a series of economic reforms and having all tools of poverty eradication at disposal for long.

First Published On : Dec 21, 2016 14:49 IST

Sometimes Rahul Gandhi speaks meaningful things: BJP leader on Cong VP’s kind gesture towards Modi

<!– /11440465/Dna_Article_Middle_300x250_BTF –>The Bharatiya Janata Party (BJP) on Tuesday said it was surprised to see Rahul Gandhi extending a kind gesture towards Prime Minister Narendra Modi when he asked Congress supporters to restrain from raising ‘murdabad’ slogans against the latter at Congress rallies.”Sometimes ‘Pappu’ (Rahul Gandhi ) speaks meaningful things and we hope this gesture of respect towards the Prime Minister remains in his heart, otherwise he is the kind of person who is known to tear cabinet decisions passed by his own Prime Minister Dr. Manmohan Singh,” BJP leader Prem Shukla told ANI.While addressing a rally in Uttar Pradesh’s Jaunpur district yesterday, Rahul Gandhi said, “We have a difference of opinion with Prime Minister Modi and the BJP. But let’s not say murdabad. That is the work of the RSS.”

BJP slams Uttarakhand govt for declaring special 90-minute Friday break for Muslim employees

<!– /11440465/Dna_Article_Middle_300x250_BTF –>BJP on Monday slammed the Uttarakhand government for declaring a special 90-minute Friday break for Muslim employees, saying it will set a wrong precedent and accused the Congress of “communalising” the state’s politics ahead of the assembly polls.Accusing the Congress of pursuing a divisive agenda in its greed for power, the party said few people will be left working in the government offices if Hindus, who observe different forms of pujas across the month, are also given a similar concession. BJP National Secretary Shrikant Sharma told reporters here that Congress has a history of “dividing” people on communal lines in its greed for power and what it has done in Uttarakhand is an attempt to hide the Harish Rawat government’s failures.”There is no issue with people of different faiths offering prayers of their choice. But this decision will set a wrong precedent on the matter of principle. From Monday to Saturday, faithfuls in our culture worship different Gods and offer prayers. “If everybody is to be given a favour like this, then who will work in government offices. It is an attempt to communalise the state’s politics ahead of the polls as the government has failed on all fronts. It has nothing to show to people for its work and is attempting to hide its failures under its communal agenda,” he said.Congress has given communal colour to terrorism in its greed for power, Sharma alleged, claiming that the then Prime Minister Manmohan Singh had gone on to say that minorities have the first right to the nation’s resources. For BJP, the poor have the first right, he claimed. The Uttarakhand government has announced a special 90- minute break will be given to the government employees from the Muslim community in the state for Friday prayers.

Congress hits back at Modi over Indira Gandhi jibe, says he should stop ‘insulting’ former PMs

New Delhi: The Congress asked Prime Minister Narendra Modi to stop “insulting” former heads of government, a day after the Prime Minister cited a book to say Indira Gandhi paid no heed to the Wanchoo Committee’s recommendation to demonetise high-value currency notes in 1971.

PM Narendra Modi had claimed. ReutersPM Narendra Modi had claimed. Reuters

PM Narendra Modi had accused Congress of putting its own interests before the nation’s. Reuters

“Stop insulting former prime ministers. Change the narrative and mindset. From Jawaharlal Nehru to Atal Bihari Vajpayee, Manmohan Singh to Indira Gandhi, it’s a long list. When you insult them you do not insult Indira and Nehru, you also insult Lal Bahadur Shastri and Morarji Desai who demonetised high-value currency in 1978,” the party’s deputy leader in Rajya Sabha, Anand Sharma, said at the FICCI conference.

Modi had cited a book to say that when the then Finance Minister YB Chavan went to Indira Gandhi in support of the exercise, she asked, “Only one question. Are no elections to be fought by the Congress party?”

Accusing the Congress of putting its interests before the country’s, he had said what should have been done in 1971 has been done now by his government and that the delay in launching demonetisation caused a lot of damage to the country.

Replying to this, the Congress leader said, “It is sad. 1971 was the year when India gave Indira Gandhi a massive mandate. The same year we were challenged by the then East Pakistan. India had 10 million refugees. Genocide was going on in what is now known as Bangladesh. China, siding with Pakistan, had moved troops to the border. India had the courage and strength to take the decision and the rest is history.”

The country had just celebrated Vijay Diwas on Friday to mark the win over Pakistan in the 1971 war. “It was a day to salute
Indira and not insult her,” Sharma said.

Taking a dig at Modi for calling himself a fakir, Sharma said, “I do not have that kind of a wardrobe but I will not call myself a fakir. We are public servants. We must serve people and understand their pain. We must have humility.”

Asked as to when Rahul Gandhi will make public the graft charges against Modi he claims to have proof of, Sharma said, “It will be done at the right time.”

He also alleged that BJP purchased land in many states before the prime minister announced the decision to scrap high-value
notes on 8 November and demanded the Centre bring a white paper on demonetisation. “Crores of rupees were deposited in banks and all that information should come through a white paper,” he said.

Sharma said the government in power needs to maintain balance “before issuing any narrative and for good governance. It is important to have a responsible opposition”.

First Published On : Dec 17, 2016 20:11 IST

Demonetisation: Govt responsible for no debate on note ban, alleges Opposition

New Delhi: Blaming the government for not allowing Parliament to work over demonetisation, some Opposition parties led by the Congress on Friday urged President Pranab Mukherjee to intervene.

Representational image. PTI

Representational image. PTI

A host of Opposition leaders including former Prime Minister Manmohan Singh, Congress President Sonia Gandhi, Vice President Rahul Gandhi, Trinamool Congress lawmaker Sudip Bandyopadhyay and Sharad Yadav of the Janata Dal United met Mukherjee and submitted a memorandum.

“Because of the government’s attitude, no debate on crucial issue of demonetisation was possible during the winter session of Parliament,” the memorandum said.

“We made best efforts to ensure that the demonetisation issue is discussed but the government did not allow our adjournment motion,” Congress leader Mallikarjun Kharge told the media later.

“This government has endeavoured to break every principle of democracy and the entire responsibility of not allowing Parliament to function lies with the government,” he said.

First Published On : Dec 16, 2016 15:51 IST

Ensure cash crunch ends by Jan 15, UP BJP MPs tell Amit Shah

<!– /11440465/Dna_Article_Middle_300x250_BTF –>After yet another day of uproar in Parliament stalled over demonetization, around 30 BJP parliamentarians from eastern Uttar Pradesh gathered in the heart of the city on Wednesday evening for a meeting with party president Amit Shah.The aftermath of demonetization was the predominant concern of the MPs at the two-hour meeting, which Shah had convened to get feedback on the issue, besides the impact of surgical strikes and the party”s parivartan yatra in the poll-bound state.A majority of MPs told Shah that if the inconvenience caused to people because of demonetization was not mitigated by January 15, it could hurt the party’s prospects in the assembly elections in the state due early next year, according to sources. The MPs said steps should be taken to address the cash crunch and ensure normalcy in transactions.The MPs also said that after the surgical strikes across the Line of Control on September 28 midnight there was a positive mood for the party, but demonetization has overshadowed it and dominated the narrative. Prime Minister Narendra Modi made the announcement to recall notes of Rs 500 and Rs 1000 on November 8.With elections drawing near, there has been a growing concern in the state party with about the opposition capitalising on the lack of cash in banks and long queues at ATMs causing inconvenience to people.This was the first meeting Shah had with his party MPs after demonetization. Some MPs are of the view that the feedback should have been taken earlier, sources said.Shah, who heard their concerns, asked them to go to villages in their constituencies before the candidates were announced.The meeting was held over dinner hosted by home minister Rajnath Singh, an MP from Lucknow.Around the same time, at another meeting convened by the RSS-affiliated Laghu Udyog Bharti, representatives of small and medium industries expressed concern about going cashless overnight and the situation leading to retrenchment. The meeting was attended by minister of state for finance Arjun Meghwal.Shah, who met another group of party MPs from UP on Thursday night, held deliberations with BJP office bearers earlier in the day. According to sources, the office bearers told him that despite the problems, there was support for demonetization.Shah said that the Modi regime was different from the previous Manmohan Singh and Narasimha Rao governments and had got the mandate to take tough decisions.According to sources, Shah described demonetization as a visionary decision of political will aimed at curbing black money and said the government will not confine itself to small reforms but will bring “fundamental changes” in the economy.

Demonetization: Naidu says PM Modi will be present in Parliament, slams MMS and Chidambaram

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Union Minister M Venkaiah Naidu said Prime Minister Narendra Modi will be present in Parliament for the remaining three days of the winter session and accused the Opposition of “changing goalpost” to disrupt functioning of both the Houses.”The Prime Minister, except when he was out, is in Parliament every day. He is the first man to come to the Parliament and the last man to go. He is sitting in his room and watching all that is happening. As and when there is a request, he comes to the House,” Naidu said.When asked specifically if the Prime Minister will be present in Parliament for the next three days, he said,” He will be.”Naidu’s remarks come in the background of Opposition’s demand for Modi’s presence in the House during the debate on demonetizationand discussion under a rule which entails voting.The winter session of the Parliament has witnessed almost complete washout since it began on November 16. It will resume tomorrow and conclude on December 16.Stressing that the government wants to have a debate on the demonetizationissue, Naidu accused the Opposition of “changing goalpost”, saying the Speaker had allowed the discussion under rule 193 and now it is being disrupted by the Congress-led Opposition.After the discussion started, the Opposition realised that they “don’t have anything to say” and suddenly started demanding that Prime Minister be present in the House.”You want Prime Minister to come to House and listen to all the abuses. Who are they (Opposition) to decide and dictate. There is rule 193 and the speaker has already accepted (a debate under it),” he said. Naidu assails Manmohan, Chidambaram for criticising note ban Hitting out at former Prime Minister Manmohan Singh and ex-Finance Minister P Chidambaram for criticising the government’s demonetizationdecision, Senior Union Minister Venkaiah Naidu today accused them of not having done anything to curb the menace of black money and instead allowed “loot and plunder” through various scams.Asserting that Modi has shown “political courage” by taking demonetizationdecision, the minister said there may by temporary pain but it was for long term gain. It is a “strong pill for a long time ill caused by Manmohan Singh, Chidambaram and his party,” he added.Referring to Singh’s allegations that demonetizationis a “monumental management failure” and case of “organised loot and legalised plunder”, Naidu alleged, “Manmohanji loot and plunder happened in your regime. You presided over the loot and plunder of 2G, 3G and CWG…Congress has no moral right to criticise the Prime Minister.”Accusing Singh of not having done anything to stop “parallel economy”, Naidu said,”I challenge Chidambaram and Manmohan Singh to come out with one single instance where they have shown the intention of fighting (the menance) of black money.”He said Modi government had to take the gigantic step of demonetizationas chemotherapy to fight the “cancer of corruption”. “And like there are side effects of chemo, this also has temporary effects,” he added.He also said that the government was advocating “less cash or minimum cash economy and not advocating cashless economy”.

Demonetisation impact: Will it help the economy and reverse jobless growth?

So what is demonetisation? Is it, as former finance minister P Chidambaram declared on Tuesday, “the biggest scam of the year”? Or is it, as Prime Minister Narendra Modi has been at pains to insist, a move that will curb black money, bring more into banking sector, widen the tax net and push us towards a more digitised economy? Does this, as the former finance minister claimed during a news conference, make poor people even poorer or will it, as Modi promised, create more jobs and diminish poverty?

In the heat and dust of a debate, often the larger points remain unnoticed while we squabble over perceptions. Demonetisation has unleashed a beast so strange and powerful that politicians, economists, media and every other stakeholder have since turned into blind men trying to describe an elephant.

S Gurumurthy. File photo. Reuters

S Gurumurthy. File photo. Reuters

While economists remain sharply divided over its impact (Amartya Sen and Larry Summers, for instance, have trashed it while Jagdish Bhagwati and Ken Rogoff see it as a bold, audacious move and a major reform), politicians bicker and commentators get tethered to their prejudicial divides, an interesting perspective has been offered by RSS ideologue S Gurumurthy.

A chartered accountant by profession and a commentator on matters economic and political in his own right, Gurumurthy, who is said to have the prime minister’s ear, has presented demonetisation as a much-needed remedy against “economic mismanagement” of the UPA years where sharp growth was accompanied by a rather strange fall in jobs.

His contention is that the economy under former prime minister Manmohan Singh, a noted economist and a former RBI governor, was fuelled by asset inflation that resulted in the creation of huge amount of black wealth. This unmonitored cash, according to him, drove up the real estate prices, stock market and gold that eventually pushed up the GDP but did little to create jobs and hence was not beneficial for the common man.

Speaking to CNN-News 18 during the sidelines of a seminar on Monday, Gurumurthy said that under Singh and Chidambaram, “the quantum jump in illicit cash in the economy fuelled an asset price bubble in gold, stocks and real estate, which reflected as high GDP growth in the UPA years and continuing till now. However, that growth couldn’t create jobs because it was black money spirited out of India and round-tripped back in the form of investment in assets,” he said.

In his column for Tuesday’s edition of The Hindu, the research professor of legal Anthropology at SASTRA University provided some figures to elaborate on his theory a little more, comparing the economies under NDA government led by Atal Bihari Vajpayee and UPA 1 under Manmohan Singh.

“During the NDA rule (1999-2004), real GDP grew by 27.8 percent, annually 5.5 percentage points. Annual money supply, that fuels inflation, by 15.3 percent. Prices by 23 percent, annually 4.6 percent.” He then goes on to calculate the rise in various metrics: stocks 32 percent; gold 38 percent and a “phenomenal” rise in jobs by almost 60 million. Under Manmohan Singh‘s UPA, however, says Gurumurthy, “real GDP grew by 50.8 percent, annually 8.4 percentage points — one-and-a-half times that of NDA’s,” but only 27 lakhs jobs were generated as against 600 lakhs during NDA’s 5 year-term, he writes.

He explains this jobless growth arising out of “asset price inflation, not production,” and goes on to add that stock and gold prices recorded a three-fold jump whereas property prices “doubled every two-three years.”

In his critique of demonetisation in Friday’s column for The Hindu, Singh had admitted that India’s cash to GDP ratio “is very high vis-à-vis other nations.”

What explains this high circulation of cash? Gurumurthy puts it on a rise in high denomination notes (HDNs) which make it easier to generate black wealth. He writes that while in 1999 cash with the public was 9.4 percent of nominal GDP, by 2007-08 it had jumped to 13 percent. This is an unusually high figure because rising bank and digital payments should have made the figure come down. HDNs in the hands of public, he writes, shot up from 34 percent in 2004 to 79 percent in 2010 and touched 87 percent the day Modi announced the decommissioning of notes.

During the Nani Palkhivala Memorial Lecture in Chennai on 30 November, Gurumurthy had cited celebrated French economist Thomas Piketty to say that the economic growth during 2004-2014 did not improve the lives of the poor because of “Piketty effect” and the higher GDP failed to haul people out of poverty,” according to another report in The Hindu.

How accurate is the RSS ideologue’s contention that Indian economy during UPA years was awash with “unmonitored cash”? Is it true that these years actually saw a fall in jobs despite high growth?

The Institute of Applied Manpower Research (IAMR), a think-tank of the Planning Commission, in a research paper published in 2013, found that not only did India witness jobless growth during the UPA tenure, it also saw millions pushed to become casual labour with little social security.

The authors, according to The Times of India report, revealed through their research that despite a phenomenal 8.5 percent growth in GDP, “employment in total and in non-agricultural sectors” did not grow. “This jobless growth in recent years”, they found, “was accompanied by growth in casualisation and informalisation”.

According to the study, as cited by The Times of India report, manufacturing sector saw the loss of 5 million jobs between 2005-10. The services sector witnessed only 4 million additional jobs in 2005-2010 (as compared to a massive growth of 18 million jobs during 2000-2005). This, the report said, was odd considering the growth period is often called that of ‘service-led’ growth.

If this points to a crippling problem that falsified growth while making it jobless, by sucking out extra, unmonitored cash, demonetisation may help the economy do a much-needed course-correction.

So the choice before the Modi government was to either maintain status quo — a combination of illicit cash fuelled high GDP and joblessness — or to reboot the economy through demonetisation that would trigger initial hardships but eventually restore real growth and jobs. Gurumurthy feels the government did the right thing by choosing the latter option.

As Columbia University Professor of Economics and Law Jagdish Bhagwati pointed out in his article (co-authored by Pravin Krishna and Suresh Sundaresan) for The Times of India, “Although the process is inconvenient, and subjects many households to hardships, it forces the cash from the black economy to be deposited into the banking system, potentially increasing transparency and expanding the tax base and revenues to the government from taxes and surcharges.”

The jury is still out on perhaps India’s most disruptive reform. But just as it would be foolish to tout demonetisation as a magic bullet, it similarly makes little sense to call it India’s biggest scam.

First Published On : Dec 13, 2016 17:16 IST

Demonetization: Why PM Modi’s December 30 deadline could cost BJP

<!– /11440465/Dna_Article_Middle_300x250_BTF –>“I have done my calculations. Your problems will be eased post December 30”, assured PM Modi at a rally in Gujarat. This deadline of things going back to normal is probably the only thing Modi has kept constant since the demonetization decision was announced on November 8. “Give me 50 days and the problem of black money will be solved,” was his impassioned plea. Since then, the goalpost of demonetization has been largely shifted to promoting cashless economy, but PM Modi runs the risk of a serious credibility loss by sticking to the December-end deadline of easing all pains owing to cash crunch.According to Reuters estimates, it will take at least three months to replenish the 86% volume of Indian currency that were made invalid post demonetization. While the withdrawal limit for banks per week is Rs 24,000 per account, most banks are unwilling to give an amount greater than Rs 10,000 due to lack of cash. The problem continues unabated in varying degrees across the country. Even the Supreme Court has asked for the Centre’s reply in this matter. While the Attorney General may believe ATM queues have shortened considerably, the picture from different parts of the country are in stark contrast. IIP data for October (pre-demonetization) shows contraction owing to weak manufacturing numbers and is likely to get only worse. Most rating agencies have cut India’s GDP growth rate owing to low consumption.The likes of Larry Summers, Manmohan Singh and Kaushik Basu have warned of a cascading effect of this economic turbulence with looming fears of job losses and slowdown. The only glimmer of hope comes from Morgan Stanley which believes India’s economy will be back on track in April, 2017. Amidst all these grim predictions, one wonders whether PM Modi is guided by false hope or a wrong set of advisors about the possible economic fallout and the severity and longevity of it. The hope is to trust that PM Modi has the rare insight which many of the pre-eminent economists are missing. Even his Finance Minister believes it will be a couple of quarters before the economy picks up. A note ban of this extent in an economy like India has never been done. Hence, there is no available data or model to properly estimate the extent of demonetization. One also can’t ignore that many of the eminent economists failed to predict the 2008 crisis. So, Modi may still beat the odds. PM Modi’s December 30 deadline is based on two promises. One is that people’s hardship would be eased beyond that and second, these 50 days will be a body blow to black money racketeers. Whether hardship has eased will be judged by the voting public by their personal experiences. So far, the government hasn’t promised publication of tangible statistics, that will reveal the amount of black money tracked in this entire exercise. PM Modi has anchored this audacious demonetization scheme using his personal charisma and integrity to the hilt. People have been largely appreciative, despite suffering hardships. The schadenfreude of the rich suffering is too alluring for the poor and the middle class to let go off. But even a successful marketing campaign has its limitation and expiry date. The unquestioned support towards demonetization among a large section of population has already started to waver, seeing the innumerable flip flops by the RBI and Finance Ministry, looking to implement a new rule everyday. But post December 30, people will like to see some actual results to convince themselves that all these countless hours of lining up for cash were worth something.The entire digital push is commendable, but as an FT commentator says, was the entire process too much, too soon? A tight schedule for changing the fundamentals in a country as big as India looks daunting if not impossible. The amount of cash seizures in new notes (close to Rs 100 crore) means there is a systemic rot in the banking system and clearly a nexus exists between unholy bankers and traders. The government has to urgently plug the loopholes or else the entire mission behind demonetization will go to waste. The message currently being received is the big fishes are getting away and the lesser mortals are facing the brunt. PM Modi may have sold the dream well, but will the gullible mass get a rude reality shock will only be known in the New Year. And BJP may just face the wrath in the elections. PM Modi’s high stakes gamble is increasingly looking shaky.

Rahul Gandhi’s ‘Modi dividing India along religious lines’ remark will ‘encourage’ Pak: BJP

<!– /11440465/Dna_Article_Middle_300x250_BTF –> The BJP took exception to Congress leader Rahul Gandhi’s remarks that Prime Minister Narendra Modi and Home Minister Rajnath Singh are dividing the country on religious lines, saying he is suffering from “attention seeking disorder”. The Congress vice president had earlier in the day taken a dig at Singh and remarked that while he agrees that Pakistan is trying to divide India along religious lines, the Home Minister and his “boss” (PM Modi) have also been doing the same.”Rahul is suffering from attention seeking disorder. It is a shameful statement. He does it for a good TRP,” BJP secretary Srikant Sharma said here. He said while the entire country and the world community are united against Pakistan on the issue of terrorism, Gandhi’s remarks only encourage those seated in power in Islamabad. “No other party than Congress knows it better how to divide the country on religious lines. The 1984 anti-Sikh riots are the biggest example … then Prime Minister Manmohan Singh had said minorities have the first right on resources.

VVIP chopper scam: Manmohan Singh should clarify SP Tyagi’s charge: BJP

<!– /11440465/Dna_Article_Middle_300x250_BTF –>The Bharatiya Janata Party (BJP) said Sunday that former Prime Minister Manmohan Singh needs to give a clarification on the charge put up by former air force chief S P Tyagi that that the Prime Minister Office had asked for a tweaking of the AgustaWestland VVIP chopper deal.”The epicenter of the corruption during the UPA regime was the PMO office and 10 Janpath (Sonia Gandhi’s residence). Today, SP Tyagi has categorically stated that all the changes in Augusta Westland chopper’s specifications were made at the behest of the PMO office. Manmohan Singh has to explain and clarify on this charge as his office is under attack,” BJP leader S. Prakash said.He added, “I’m sure the investigating officers will take it forward and enquire former Prime Minister Manmohan Singh on this monumental corruption engineered during his period.”
ALSO READ VVIP chopper scam: Ex-IAF chief SP Tyagi drags in then PMO, says I am not running awayTyagi has been accused by investigators in Italy and India of abusing his official position to swing the contract in favour of Finnmeccanica, the parent company of UK-based helicopter maker AgustaWestland, by tailoring specifications of the tender at the instance of his cousins and was arrested on Friday along with his cousin Sanjeev Tyagi alias Julie and advocate Gautam Khaitan.

VVIP chopper scam | Not just SP TYagi, other bureaucrats, politicos involved must come under CBI radar: Defence expert

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Defence expert Nitin Gokhale on Saturday said that former air chief SP Tyagi is not the last person to be arrested in the AgustaWestland case, adding that other high-profile officials, bureaucrats and politicians should come also be brought under the CBI scanner.”The former air chief SP Tyagi being arrested is indeed a big news and it has taken almost four years for the CBI to make a first high profile arrest. But I believe that SP Tyagi is not the last person who will be arrested because he did not take an individual decision in the AgustaWestland case. There were many other high profile and high post people were also involved in the decision making,” Gokhale told ANI. “So, just to pick out Air Chief Marshal (Retired) SP Tyagi will be unfair. So, therefore, my view is that even they should be not just interrogated, but they should be looked at very closely and if necessary also go after them,” he added.He further said the Central Bureau of Investigation (CBI) will do well to look at all those involved in that decision making process. “Otherwise, it will be seen as victimising a service personnel and allowing bureaucrats, and may be some politicians to get away from this crime. This entire deal was handled not just by Air Head Quarters, the Ministry of Defence (MOD) was involved and so was the Prime Minister’s Office. Two PMs offices that is the previous NDA government and Dr. Manmohan Singh’s Prime Minister’s Offices were involved. The special protection group which protects the Prime Minister was also involved.” he added.The CBI will produce Tyagi in court on Saturday and will seek his remand after he was arrested in the AgustaWestland helicopter deal case. Delhi based lawyer Gautam Khaitan and Sanjeev Tyagi were also arrested in the case.The deal is related to purchase of twelve helicopters for VVIPs from Italian manufacturer Finmeccanica in 2010 during UPA-2 government’s rule. Tyagi, 71,who retired in 2007, was called for questioning to the CBI headquarters along with Khaitan and Sanjeev Tyagi. These are the first arrests by CBI which came after it registered a case in 2013.

Manmohan Singh’s warning to Narendra Modi: Is demonetisation already a ‘mammoth tragedy’?

The choice of words of Manmohan Singh, former prime minister and an economist, for his column in The Hindu on demonetisation impact on India’s economy, beginning with the title, Making of a mammoth tragedy, should worry the average Indian. Even if one tend to discount the politics of Singh’s article, the former RBI governor’s warning on an impending economic crisis, that according to him, will mainly hit the poor, is worth paying a great deal of attention by his successor in PMO, Narendra Modi.

Singh begins the piece by lauding Modi’s intention—addressing black money, fake currency problems—but later goes on to say that what he has done to achieve this task will not only work but its ‘unintended consequence’ will harm the poor greatly. Singh said. “All black money is not in cash, only a tiny fraction is. Against this backdrop, the decision by the Prime Minister is bound to have obverse implications by causing grievous injury to the honest Indian who earns his/her wages in cash and a mere rap on the knuckles to the dishonest black money hoarder.” Singh, who had just recently warned about a 2 percent GDP decline following demonetisation, ends his article saying “It is my humble opinion that we as a nation should brace ourselves for a tough period over the coming months, needlessly so.”

Prime Minister Narendra Modi. AFPPrime Minister Narendra Modi. AFP

Prime Minister Narendra Modi. AFP

Is the former PM overstating the short-term pain caused by the demonetisation calling it ‘a mammoth tragedy’, launching a political attack intended to bulldoze a massive economic reform shouldered by his political rival–something and a missed opportunity for his government? Or is it an important caution from an economist-cum former central banker that should be an eye-opener even to his political enemies and the finance ministry?

It is too early to talk about the actual impact on the economy and its various stakeholders from the artificial cash crunch that is a consequence to PM Modi’s massive currency crackdown that has parallels in India only to the 1978 currency ban by Morarji Desai Government. But, some indications have begun to flow in, which indeed shows things have taken a bad turn for the economy though no one is sure how things will pan out from this point.

Let’s look at the available data so far and try understanding Singh’s caution.

Services/manufacturing

The demonetisation announcement happened on 8 November. The only real numbers that gauge the economic activity in the month of November that is out is the Nikkei India Services Business Activity Index for manufacturing and services sectors. This is an important index economists and central bank track to fathom the trends in these key areas. The services sector PMI sharply fell to 46.7 in November from 54.5 in October—that is the biggest monthly drop since November 2008, just two months after the global financial crisis hit the economy following the US investment bank Lehman Brothers going bust in September. A reading of PMI above 50 typically shows economic growth, while a figure below 50 indicates contraction. “The latest set of gloomy PMI figures for the Indian service sector shows that companies were heavily impacted by the 500 and 1,000 rupee notes ban. Cash shortages resulted in fewer new business intakes, which in turn caused a fall in activity and ended a 16-month sequence of expansion ,” said Pollyanna De Lima, Economist at Markit and author of the report.

A decline, though not to this extent, was seen in the manufacturing PMI as well with the index shrinking to 52.3 in November from October’s 22-month high of 54.4. But, the PMI numbers do indicate both manufacturing and services have taken a major hit in November. One needs to wait and watch how things will pan out from here on when more data comes.

November auto sales

Then we have the auto sales numbers, which is a good indicator to know what is happening on the ground. According to PTI report, the vehicle sales across categories registered a decline of 5.48 per cent at 15,63,665 units, from 16,54,407 in November 2015. It is the steepest decline in 43 months when total sales had declined by 7.75 per cent in March 2013. Two wheelers and commercial vehicles are the segments that are hit most. According to Society of Indian Automobile Manufacturers (SIAM), passenger vehicle sales last month were at 2,40,979 units, as against 2,36,664 in November last year. Domestic car sales ticked up to 1,73,606 units as against 1,73,111 in November last year while that of commercial vehicles (CVs) was down 11.58 per cent at 45,773 units in November, SIAM said. According to this report, total two-wheeler market sales dropped by five per cent, with market leaders like Hero MotoCorp and Bajaj Auto witnessing major fall. Hero MotoCorp sold 4,79,856 units of two-wheelers in November, marking a fall of around 12.9 percent year-on-year, while Bajaj Auto saw sales dropping by 12 percent in November, and others reported a flat growth.

The RBI cues

The RBI’s approach to the demonetisation impact on the economy is bit perplexing, but the obtrusive caution is hard to ignore. In its latest bi-monthly policy review, the central bank has already cut the FY17 growth forecast to 7.1 percent from 7.6 percent, but not taking into account the full impact of demonetisation shock. “The withdrawal of SBNs could transiently interrupt some part of industrial activity in November-December due to delays in payments of wages and purchases of inputs, although a fuller assessment is awaited,” the RBI said.

The RBI indeed acknowledges that there’ll be ‘short-run disruptions in economic activity in cash-intensive sectors such as retail trade, hotels & restaurants and transportation, and in the unorganised sector’. But the RBI’s larger assumption seems to be that there will be a recovery beyond short –term pain of cash-crunch. “ If the impact is transient as widely expected, growth should rebound strongly.”

But the central bank too only ‘expects’ that the demonetisation effect is ‘transient’ but it is not fully sure on the actual impact. “The outlook for GVA growth for 2016-17 has turned uncertain after the unexpected loss of momentum by 50 basis points in Q2 and the effects of the withdrawal of SBNs (specified bank notes) which are still playing out.” In short, the RBI has no clue at this stage what the demonetisation will do to the economic growth. It primarily attributes the loss of growth momentum in second quarter to the downward revision and to the as yet unclear effects of note ban. This means, if things turn bad, the 7.1 percent growth projection could be revised downwards even further to 6-6.5 percent.

Job losses

There are indications of severe hit to the employments in the informal sector post after the government announced Rs 500, Rs 1,000 notes as illegal tender on 8 November. As Singh points out in his Op-ed, “more than 90 per cent of India’s workforce still earn their wages in cash. These consist of hundreds of millions of agriculture workers, construction workers and so on”. The pain and suffering of these segments, which constitute the majority is not quantifiable, but no government can shun the responsibility of massive losses in the country that is a consequence of a “well thought-out”, conscious policy action, which according to RBI governor Urjit Patel, “wasn’t done in haste”. We don’t have reliable figures on job data. But, according to a report in Financial Express, which quotes unnamed industry officials, “As many as 4 lakh people, mostly daily wagers, may have either lost their jobs or shunned work temporarily due to the lack of payment so far, and the number is only going to grow if the cash crunch persists.”

Even the Bharatiya Mazdoor Sangh, the labour wing of BJP’s ideological parent, Rashtriya Swayamsevak Sangh has raised an alarm about the huge hit on job losses. “”Under the new government, 1 lakh and 35 thousand job opportunities have been created so far but 20 lakh people have lost their jobs,” Baij Nath Rai, president of the Bharatiya Mazdoor Sangh, told The Telegraph. This is a serious situation indeed in a country where job creation is already a massive challenge. The onus, yet again, falls on the Modi-government here.

The big question is how long the pain will last. There is no clarity on this either from the government and the central bank. PM Modi talks about 50-days, his finance minister, Arun Jaitley speaks of two or three quarters and the RBI doesn’t seem to have an answer except assuring the public that there is enough cash out there and things are under “constant review”.

There are no two thoughts on the intentions behind the demonetisation exercise but when ultimately a cost-benefit analysis is done, and if the government finds little luck on recovery on unaccounted cash, the cost of this whole exercise will be enormous, far outweighing the gains that may include more people moving to non-cash transactions. PM Modi’s big task now is to ensure demonetisation doesn’t end up as a tragedy.

Data support from Kishor Kadam

First Published On : Dec 9, 2016 14:59 IST

Manmohan Singh presided over monumental mismanagement of nation, says Venkaiah Naidu

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Union Information and Broadcasting Minister M Venkaiah Naidu launched a scathing attack on the Congress party by squarely blaming former Prime Minister Dr Manmohan Singh for mismanaging the country. “Manmohan Singh has presided over the monumental mismanagement of the country.”Naidu claimed that Congress has been unable to digest the revolution being brought about by Prime Minister Narendra Modi through demonetization decision. “I ask the opposition, is it foolish to take action against the counterfeit money of Pakistan, taking action against drug mafia, black money? Can Congress explain?” said Naidu.Mentioning the number of scams that surfaced during the UPA regime, Naidu said the Congress is negating demonetization because they could not come out with such a revolutionary move. “2G, 3G spectrum, Agusta, Commonwealth Games scam, coal scam – All scams have happened under whose regime?” he said. Regarding the everyday ruckus in parliament, leading to an adjournment of both houses, Naidu said, “If you really want to expose the government, then expose it by having a debate in parliament.”Responding to the Congress’ claim of number of deaths taking place under the Bharatiya Janata Party’s regime, Naidu said lakhs of farmers committed suicide in Maharashtra, Karnataka during the UPA regime.Applauding the government’s decision to ban high-denomination currency, Naidu said, “The PM of India has taken a historical and bold revolutionary decision for the transformation of India.Naidu demanded an apology from the opposition for obstructing parliament and called out for a proper discussion on all issues raised by opposition.”Naidu also termed opposition’s ‘Bharat Bandh’ a big flop.

Manmohan Singh fires off scathing op-ed, calls demonetisation a ‘mammoth tragedy’

Former prime minister Manmohan Singh once again trained his guns on the Narendra Modi government’s demonetisation move, calling it a “mammoth tragedy”.

A month after the old currency notes of Rs 500 and 1,000 were banned overnight, in an editorial for the newspaper The Hindu on Friday, Singh wrote how the decision will hurt the Indians who earn their wages in cash, while the black money hoarders will get away with a “mere rap on the knuckles”.

File image of former PM Manmohan Singh. AFPFile image of former PM Manmohan Singh. AFP

File image of former PM Manmohan Singh. AFP

“The popular saying “the road to hell is paved with good intentions” serves as a useful reminder and warning in this context,” wrote Singh saying that although the intention to get the country rid of the black money is genuine, the method adopted by the current government is flawed.

Singh goes on to explain that millions across the country who earn their wages and hence, save, exclusively in cash has been the worst hit. “To tarnish these as ‘black money’ and throw the lives of these hundreds of millions of poor people in disarray is a mammoth tragedy,” he writes.

Meanwhile, Singh says that only a fraction of the actual black money is stored in cash form (rest in land, gold, foreign exchange, etc) by the guilty. And these people have much easy access to banks and other facilities.

He goes on to call Modi’s decision a “travesty of this fundamental duty”.

Singh also slammed the government for propagating that it has solutions for all the  problems while the previous one did nothing.  “It is not so,” writes Singh, saying the government needs to take care of the weak and not run away from responsibility.

Echoing his Rajya Sabha speech from last month, Singh said the move can even have an adverse effect on the GDP growth and job creation.

Last month Singh broke his silence on the central government’s demonetisation move, criticising Modi over the decision. During a debate in Rajya Sabha on 24 November, Singh said, “The GDP of the country will decline by about 2 percent by what has been done. And this is an underestimate and not an overestimate.”

Experts have agreed with Singh’s observations — who is an eminent economist — and concurred that the decline in GDP could be as high as three or four percent.

First Published On : Dec 9, 2016 10:03 IST

Uddhav Thackeray warns of further demonetization protest

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Shiv Sena chief Uddhav Thackeray on Thursday claimed his party has not softened its stance on demonetization, hinting it could step up opposition if people’s sufferings continue after December 30, a deadline set by Prime Minister Narendra Modi to set things right.Taking a cue from Akhilesh Yadav dispensation in Uttar Pradesh, Thackeray, whose party is second largest constituent of the NDA government, also suggested giving compensation to kin of those who lost lives allegedly in the aftermath of demonetization.”(When demonetization was announced) I had neither opposed nor welcomed the move. I had only maintained that the common people should not be inconvenienced. 30 (of the 50) days have gone, but there is no sign that the problems have decreased. Rather, problems are on the rise day-by-day,” Thackeray told reporters.Asked his party’s move after remaining 20 of the 50 days Prime Minister had initially asked for, Thackeray said, “Let the period get over as ‘achhe din’ are in store.” “Let’s wait for the 20 days, people will have something to say about it. We will talk about our stand after these 20 days,” he said.To a question whether the Shiv Sena, which had joined a protest led by West Bengal Chief Minister Mamata Banerjee, has softened its stand on demonetization after a party delegation met Prime Minister Narendra Modi last month, Thackeray replied in negative. “We are not economists. But some experts like Manmohan Singh, Amartya Sen have opposed it. They too have opined it is a wrong decision,” he said.Asked which side Sena will be on if discussions are held inside Lok Sabha under a rule which entails voting, Thackeray evaded a direct reply to the question, saying “the party will remain with people”.Expressing concerns over the repeated disruptions in Parliament, Thackeray said it was unfortunate and suggested taking views expressed by BJP veteran LK Advani “seriously”.Thackeray also hailed the Allahabad High Court for holding triple talaq as “cruel” and “most demeaning” practice which “impedes and drags India from becoming a nation”, saying it is an important observation for the country. “…the case should not meet the fate of Shah Bano case,” he said. In The Shah Bano decision, the Supreme Court had overruled a Muslim personal law and granted a Muslim woman alimony. In response, a legislation was proposed by Centre in 1986 to prevent such a court decision in the future. Referring to claims that terror attacks have stopped post-demonetization, Thackeray said it meant the Prime Minister has shown a path to the world on combating terrorism. However, other countries are not following that path, he quipped. “I was happy to know that terror attacks have stopped post-demonetization. If the attacks on the country have stopped, then (it meant) Modi has shown a path to the world. Why cannot other countries resort to demonetization (then)? How simple way Modiji had shown. But other countries are not taking that path,” he said sarcastically.On whether the Shiv Sena will join hands with BJP, with which it is sharing uneasy relationship after they parted ways ahead of 2014 Maharashtra assembly polls, for the forthcoming Brihanmumbai Municipal Corporation (BMC) elections, Thackeray said, “We still have time (to talk about it). Let the 20 days go, achhe din are on the anvil.”The BMC elections are likely to be held in February next year. Thackeray also stated that he will take up the issue of plight of farmers with Union Finance Minister Arun Jaitley.The Uttar Pradesh government had on Wednesday announced compensation of Rs 2 lakh to families of those who lost lives while queueing up outside banks and ATMs following demonetization.

30 days of demonetisation: Pros and cons of the Modi govt’s note ban move

The demonetisation of high value currency denominations featuring Rs 500 and Rs 1,000 notes were banned effective 8 November midnight by Prime Minister Narendra Modi in a televised announcement. Today is exactly one month since the ban on the outlawed notes was imposed, but things on the ground are yet to see any meaningful change in the overall scenario.

While it has been a daily struggle for lakhs and lakhs of people so far to get their money back from the ATMs or bank branches, let’s take a look at the positives and the weaknesses the demonetisation of notes could have on the people and the economy at large.

Pros: Since the decision to ban high value currency notes was taken in early November, the government has tried to portray the brighter side of the note ban and its benefits on the economy in the long run. The decision to ban high value notes was taken to weed out black money and counterfeit notes from the system which has been deep-rooted in the economy for the past many decades.

With 86 percent of the total money circulation wiped out from the system, the government plans to keep a tight leash on the corruption front. According to Ambit Capital report, the share of the informal economy in India could shrink from 40 percent to 20 percent and the formal organised sector will gain market share.

The sustained crackdown on black money will also prevent people from parking their savings in physical assets such as gold and real estate, and instead boost the flow of savings into the financial system. With the quantum increase in financial savings, the cost of debt capital in India should fall. Further, as saving rate increases, lending rates are likely to fall in the line. Through the demonetisation exercise, the government has been pressing hard to become a cashless economy and is encouraging more and more people to adopt the digital payments system for their transactions. The government wants people with smartphones to use the United Payments Interface (UPI) app for a cashless transaction. Besides banks, online wallet companies including Paytm, MobiKwik and Free-Charge, too, are promoting their online products and wooing customers to get away from cash-based transactions.

In the aftermath of demonetisation, reports also suggest that housing prices in 42 major cities across India could drop by up to 30 percent over the next 6-12 months.

Cons: Although several advantages of demonetisation rolling into the economy could be far-fetched, there are immediate challenges the economy is already staring at. Following the decision to ban the currency notes, the government’s lack of preparedness to deal with cash availability has hit the common man really hard. Despite the government’s assurance to improve cash availability on a daily basis, several banks and ATMs across the country continue to dispense little or no cash.

People in villages and semi-urban areas are worst hit as majority of the transactions are done through cash. The government’s constant flip-flops on withdrawal and deposit limits at bank branches and ATMs have put people in complete disarray. With one month past the note ban move, the problem doesn’t seem to be fully resolved as banks continue to face cash crunch.

The bigger threat arising out of demonetisation is the impact on the country’s economic growth. While brokerage Ambit Capital created shock waves by predicting that GDP growth will fall to 5.8 percent in 2017-18 from 7.3 percent estimated earlier, former Prime Minister Manmohan Singh, also an economist, echoed concerns by suggesting that demonetisation could contract the GDP by as much as 2 percent.

According to CPM’s Sitaram Yechury, since 8 November, four lakh jobs have vanished, and more than 31.9 million people employed in the textile sector or “government” sectors have not been getting wages. Construction and allied sectors, jewellery, textiles and real estate are some sectors where job losses, if not already happening, are imminent.

Similarly, 20-25 percent of the roughly 2.5 lakh workers in the leather industry have been adversely affected as they are daily wage workers. The industry has been hit particularly hard as 90 percent of the units are small and medium enterprises. In the jewellery sector, 15-20 percent of workers, who are paid daily, too, have been affected.

Economist Pronob Sen has also warned that a virtual shutdown of India’s informal sector could spell doom for employment.

Recently, the July-September growth numbers of 7.3 percent also came below analysts’ estimates. A day before, the Reserve Bank of India in its policy statement cut down growth forecast to 7.1 percent from 7.6 percent earlier for the current fiscal year.

One month of demonetisation: Let’s wait for more data before writing the epitaph

It’s been one month since the central government’s decision to discontinue high-value Rs 500 and Rs 1,000 currency notes, and an extraordinary amount of commentary has been generated in the last 30 days, most of it eager to write off demonetisation as a grand ego-fuelled failure.

Part of the anguish is understandable. The move has been hugely disruptive for an economy that was booming, and a populace unprepared to be at the receiving end of such a shock. Hardships, inconveniences and adjustment blues are inevitable in the event of such a disruptive change, but as we grapple through the temporal tremor, we must reflect whether it is too early to pen the epitaph of what must rank among the ballsiest of reforms ever undertaken.

People queue up to change their old currency notes outside Bank of India in New Delhi on Thursday. PTI Photo(PTI11_10_2016_000315B)People queue up to change their old currency notes outside Bank of India in New Delhi on Thursday. PTI Photo(PTI11_10_2016_000315B)

People queue up to change their old currency notes outside a bank in New Delhi. PTI

Vivek Dehejia, professor of economics at Carleton University, points out in a column in Livemint: “…the essence of politically difficult economic reform involves managing distributional conflict: Between gainers and losers today, between losses today and gains tomorrow, or some combination of intra-temporal and inter-temporal distributional impacts. This is the first law of political economy.”

Any analysis on demonetisation, at this stage, must take into consideration that nobody knows for sure what will happen for certain beyond educated guesstimates. An experiment such as this one, on such a scale, involving this complexity, affecting 1.25 billion people at the same time, has never been conducted before. There are simply no reference points. Even noted economists have resembled little more than punters, sometimes choosing to comment on the moral and ethical nature of the move than economic impact. Simply put, in the short to medium term, till there emerges better data and more macro-economic indicators, any “conclusive assessment” of demonetisation is more likely to be an indication of the commentator’s predilection than truth.

What is becoming clear a month into the exercise, despite the panic being spread from some quarters, is that this isn’t a Waterloo moment for Indian economy because the macro-economic fundamentals remain strong. Often, criticisms have conflated temporary trouble with lasting impact and a number of times, critics and political parties have tried to draw sweeping assumptions based on incorrect or incomplete data.

We have been repeatedly told, for instance, that farmers have been crippled by demonetisation and that Rabi crop (this being the sowing season) has taken a heavy beating, as farmers have been unable to procure seeds in absence of liquidity. And yet, latest data released by the agriculture ministry prove that far from farming taking a hit, total sown area for Rabi crop “has not only jumped substantially in the past one week, but also crossed the last year’s corresponding week figure by over 8.5 percent,” according to a report in The Times of India. The total area sown under Rabi crops (as on 2 December) stand at 415.53 lakh hectares as compared to 382.84 lakh hectare this time in 2015 — an increase of 32.70 lakh hectares, according to the report.

The gap between reality and fear-mongering could be the reason why the Reserve Bank of India (RBI), in a widely-followed press conference on Wednesday, kept the key policy (repo) rate unchanged at 6.25 percent, much to the surprise and even disappointment of bankers and the market, though its Monetary Policy Committee revised downward its FY17 growth forecast to 7.1 percent from 7.6 percent, taking into account the negative impact of currency ban.

Though a sharp reduction, it is still nowhere close to the two percent fall in GDP that former Prime Minister Manmohan Singh had envisaged recently on the floor of the House, because RBI believes that transition pangs and growth slowdown are transitory in nature. Overall, the central bank gave an indication that it would rather wait and watch than jump headlong into rescuing the Indian economy, perhaps because it may not need any saving.

As quoted by Reuters, the RBI said, “It is important to analyse more information and experience before judging their full effects and their persistence…if the impact is transient as widely expected, growth should rebound strongly.”

This is the exact sentiment put forth by India’s Chief Economic Advisor Arvind Subramanian. In an interview to Economic Times, he praised the RBI’s move not to tamper with the repo rate and repeatedly stressed on the need for studying more data before committing on the medium to long term effects on demonetisation.

On whether North Block sees RBI’s estimate of a 7.1 percent growth forecast “too optimistic”, Subramanian said, “Because there are a lot of mixed signals coming, we have to wait, assess the data. We still do not have a proper macro read. Even the first macro read of what is going on. Once we have the data, we will analyse them very carefully and come back with a more considered assessment in the days and weeks ahead. At the moment, it is not very easy to make a really definitive call on the magnitudes of all these impacts.”

Some of the commentary has revolved around the figure of Rs 11.55 lakh crore, the value of scrapped currency notes that have crawled back into the system. It is being said that the final deposit amount before 30 December deadline may well match (or be marginally lower than) the figure of Rs 14.17 lakh crore, the value of notes in circulation during demonetisation. This argument has been stretched to a conclusion that this implies demonetisation is a failure.

This is too simplistic a contention and fails to take into account one of the purposes behind demonetisation — to increase the tax base and adopt more of the informal economy into the banking network. To quote Professor Dehejia again: “…the movement of some or many of the unbanked into the formal financial sector and the movement of firms from the informal to the formal economy (or, equivalently, the process of ‘creative destruction’, whereby new formal sector firms replace defunct informal sector firms) has a permanent and positive impact on the economy, even though the gains from taxing black money via the currency swap is putatively one time only.”

Also, there is no reason to assume that black money changes colour the moment it is returned to the system. As India’s revenue secretary Hasmukh Adhia clarified recently on the sidelines of a Brics event, “Depositing the money in a bank account (doesn’t make) black money into white…it will become white when we charge taxes, when the income tax department is able to reach to them and issue them a notice”.

Overall, we aren’t even remotely close to the end of demonetisation debate. And as the discussion rages, it would be worthwhile remembering CP Scott’s immortal lines: “Comment is free, but facts are sacred.” So, let’s wait for more facts.

First Published On : Dec 8, 2016 16:06 IST

Disability Bill yet to see light of day in Rajya Sabha

<!– /11440465/Dna_Article_Middle_300x250_BTF –>If one looks at the functioning of the Parliament, or the lack of it, in the last few days, it is no surprise that disability is not an important matter of discussion. In this winter session alone, the Rights of Persons With Disabilities Bill, 2016, has been listed for business four times at the Rajya Sabha. It is also no surprise that the Bill hasn’t been taken up for discussion even once.While in the last week, the Bill was listed twice, this week, it was up for discussion on Monday and Wednesday. The Bill has had a chequered past; it was first mooted in 2010 during the previous UPA government’s term. The bill was drafted by the Committee on the Rights of Persons with Disabilities (CRPD), an independent body of experts set up to draft the bill and monitor state policies on disability.With a minority in the Rajya Sabha, the BJP is not going to gain any favours from the Opposition in the Bill’s passage, says Indumathi Rao of the CBR Network. “They are wary of the NDA taking away the credit,” she says.While the Bill seeks to expand the scope of disability from the existing seven to 21 conditions, it also takes away from the 2014 Bill the need to have a commission for the disabled. Vikas Sharma of the Disability Helpline India says that the Bill also takes away the provision of political reservation, which was assured by former PM Manmohan Singh, as per the UN’s Convention on the Rights of Persons with Disabilities. Sharma says that he submitted a memorandum to the PMO on November 28, and the standing committee before that.“As per the 1995 Bill, the existing disability reservation quota is 3 per cent, and our demand was that it be raised to 6 per cent. The bill has, however, kept it at 4 per cent. Our demands were ignored and the bill was cleared by the Cabinet just two days later,” he said.There is an estimated 2.68 crore disabled persons in India, as per the 2011 census; this includes 1.5 crore men and 1.18 crore women.NEW EXTENDED LIST OF DISABILITYBlindnessLow-visionLeprosy cured personsHearing impairment (deaf and hard of hearing)Locomotor disabilityDwarfismIntellectual disabilityMental illnessAutism spectrum disorderCerebral palsyMuscular dystrophyChronic neurological conditionsSpecific learning disabilitiesMultiple sclerosisSpeech and language disabilityThalassemiaHaemophiliaSickleCell diseaseMultiple disabilitiesAcid attack victimParkinson’s disease.

RBI policy offers Urjit Patel a chance to clear air on demonetisation; will he live up to it?

That the Reserve Bank of India will most likely cut interest rate today is now almost a foregone conclusion. Economists are mostly betting on whether it will be 25 basis points or 50 bps.

The key reason being cited is that the central bank will have to cut rate to boost growth as the government’s demonetisation move is slowing down consumption and economy.

Two-thirds of the 60 economists polled by Reuters said they expected a cut, with 31 of 56 respondents expecting it to be 25 bps, while six predicted a deeper 50 bps reduction. One said the RBI would slash rates by 75 bps.

Urjit Patel, Reserve Bank of Governor. ReutersUrjit Patel, Reserve Bank of Governor. Reuters

Urjit Patel, Reserve Bank of Governor. Reuters

“Given the concerns about demonetisation and the slowdown it is likely to generate in sectors that have traditionally been cash dependant, such as consumption goods, the RBI will try to cushion the blow with a rate cut,” said Shilan Shah of Capital Economics in Singapore has been quoted as saying in the Reuters report.

A rate cut seems to be the only pill that the central bank can administer at present to boost the economic growth and the consumer confidence.

The government on 8 November announced its decision to demonetise Rs 500 and Rs 1,000 notes and replace them with new ones, in a bid to curb black money generation, fake currency usage and terror funding. The unexpected move resulted in a cash crunch as the RBI was not prepared to meet the demand for new notes. The demonetised notes formed 86 percent of the currency in circulation by value.

In this context, here are the key aspects you should watch out for in the policy statement today.

About demonetisation

Ever since the demonetisation, the central bank and governor Urjit Patel have both come under criticism for keeping mum about the steps taken. The two times Patel spoke – interviews to PTI and Quint – he just made a customary assurance that the central bank is doing everything to reduce genuine customers’ pain. That was hugely insufficient to calm given the difficulties faced by not just the general public but also the bank staff. Bank unions have written to the finance ministry explaining the various hardhsips faced by their members. According to the union, the central bank has been saying there is enough cash and it is being dispatched to the banks while banks are getting only limited cash. Due to repeated assurances given by the RBI, customers feel that the banks are rationing the cash to them for no reason and this is resulting in tension. Again, they also have raised a suspicion that the RBI is preferring private sector banks to public sector ones while disbursing cash. The policy review today is a chance for Patel to clear all these charges. Will he speak up? Will he reveal the status of currency printing in its presses? How much rupee notes have been printed? How much more have to be printed to completely replace the demonetised currency? When does he think the situation will normalise?

About deposit amount banks got

This number is important. In the absence of regular details from the central bank, there are many numbers doing the rounds. The RBI just twice put out releases on this data and the last one was on 8 November. According to the latest numbers available through sources, as much as Rs 12 lakh crore worth old currency has returned to the banking system as deposits. This is against the government’s estimate that it would get back Rs 10 lakh crore and the rest will be extinguished. There was expectation that this will result in a windfall for the central bank which could have been transferred to the government by way of special dividend. This is as of now a speculation. The government and the RBI have neither denied it nor have they clarified. So also the case of fake currency. A report in The Times of India has said 20 days after demonetisation only 3.4% of all notes returned were counterfeit. Both these, according to many, mean that the scheme has failed in its objective. Worse still is the speculation that the rich and wealthy have already laundered their money. A report in The Indian Express noted that from tiffin service to dental implants, everybody has tried to beat the system and swap old notes. What is the RBI’s thinking? Is the suspicion that the rich and wealthy are gaming the system that forced the authorities to change the rules every other day?

Growth?

As of now, India is the fastest growing economy. It grew 7.3 percent in July-September, better than the previous quarter’s 7.1 percent. However, with demonetisation curbing the spending power

of the RBI, various agencies and brokerage houses have slashed their growth estimates. Former prime minister Manmohan Singh has said he expected the GDP to fall by 200 basis points. What is the RBI’s take? Its estimate for the current year is 7.6 percent. Most probably the central bank will give out a revised estimate for the current year. Watch out for that.

Inflation or deflation?

Inflation is already trending downwards due to the favourbale monsoon that has improved the productivity of food items. In October, the retail inflation was 4.21 percent, lower than 4.39 percent in September. The food inflation, meanwhile, stood at 3.32 percent compared with 3.96 percent in the previous month. The corresponding figure for July 2016 was a higher 8.35 percent. The slower demand induced by demonetisation is seen further pressuring the prices down. There is even a view that the entire process is deflationary. If it is indeed so, this would do more harm to the economy. The RBI is bound to give some clarity on this, including a revised estimate for inflation. Look out for the number.

One could easily argue that the central bank need not clarify all of these. But given the grand scale at which the demonetisation is being rolled out and the way it is impacting the general public, there is a need for more transparency on the workings of the central bank. But, ironically, the RBI has gone into the opaque mode.

This has seriously dented the image of the central bank. Bank officers’ confederation has even sought the resignation of Patel taking moral responsibility for the havoc in the financial system.

Today’s policy review is a chance for the central bank and its governor to clarify and bring back the integrity of a democratic institution, which has always refused to genuflect before the political bosses in Delhi. The question is will Patel live up?

First Published On : Dec 7, 2016 08:25 IST

Shiv Sena submits memorandum to RBI deputy guv, invokes Manmohan to attack PM Modi on demonetization

<!– /11440465/Dna_Article_Middle_300x250_BTF –> Noting that former Prime Minister Manmohan Singh’s remarks on demonetization have raised questions over “trustworthiness” of banking system, Shiv Sena today said Prime Minister Narendra Modi’s decision is imposing a “significant cost” on economy and the implementation of the policy has been “absolute mismanagement”.A delegation of Sena MPs today submitted a memorandum to RBI deputy Governor R Gandhi, requesting “active measures” to ease out the “chaos” caused by invalidation of Rs 500 and Rs 1000 notes. Sena is a junior alliance partner of the BJP-led governments at the Centre and in Maharashtra. “We were told that RBI is taking steps to expedite the printing of currency so that there is no shortage of cash flow,” Mumbai North East MP Ganjanan Kirtikar told PTI. Apart from Kirtikar, Rajya Sabha MPs Sanjay Raut, Anil Desai and their Lok Saha counterparts Arvind Sawant, Rahul Shewale were present at the meeting that lasted for over 20 minutes.In the memorandum, Sena MPs referred to criticism of the demonetization policy by Singh in Parliament.”Former Prime Minister Manmohan Singh’s remarks on the floor of Rajya Sabha give rise to the questions on trustworthiness of the banking system, as he asked government to name any country where people have deposited their money but are not able to withdraw it,” it said. Singh had termed the roll out of demonetization as “monumental mismanagement”. “The country is increasingly worried about the absolute mismanagement in implementation (of demonetization) and daily announcements that show chaos. In no other country would such a decision, where citizens are looked down as thieves, be welcomed peacefully. We look forward to seeing the active measures taken by the RBI on easing out the chaos by demonetization,” stated the memorandum.Sena claimed the declaration to scrap old high value tenders made by Modi last month is “imposing significant costs on economy.” “The costs are becoming apparent, millions standing in queue to withdraw cash, individuals unable to buy essentials, the disruption of small business, trade, agriculture, thus the entire economy has derailed because of the improper and so far failed implementation policy adopted by the agencies.”The frustration, mental agony and trauma caused to the people, who have been restrained to withdraw their legitimate money from their bank accounts, has resulted in more than 80 deaths till date,” it said. Sena said RBI’s norms regarding withdrawal of up to Rs 2.50 lakh cash for weddings have dealt a “severe blow” to people as the conditions are very stringent, resulting in postponement or cancellation of marriages. “Our party president Uddhav Thackeray has welcomed the policy decision of the government to weed out the corruption and black money from the society, but raised serious objections on the implementation part of it. “Inadequate preparations in rolling out new currency, insufficient notes at the bank counters & ATMs, inordinate delay in recalibration of ATMs, has put people to inconvenience and hardships,” the memorandum said.Referring to RBI’s ban on cooperative banks to deposit and exchange old notes, Sena said 371 district co-operative banks, which are the backbone of the rural economy, too have suffered serious setback. Sena also referred to the Bombay High Court’s observation that some arrangements need to be made to address the plight of DCCBs following demonetization. “Thus, in nutshell, from labourers to farmers, from weavers to artisans, from workers to traders and businessmen, from service sector to manufacturing sector all are the sufferers in the onslaught of demonetization,” it said.The memorandum said, “Modi assured the people of India on November 8 by saying ‘your money will be your money, you don’t have to worry about this, we have made arrangements to ensure that citizens suffer the least possible difficulty’. The PM also urged people for 50-day timeframe to streamline the currency circulation.” “The countdown has already begun as 27 out of 50 days have passed by and 23 days are left for the government to put the derailed economy back on track and restore normalcy.” Stating that people are anxiously awaiting and watching the moves of the government in dealing with worsening situation, it said that every constituent of the society wants to heave a sigh of relief on December 30.”Eminent economists like Amartya Sen, Manmohan Singh and many others have questioned the wisdom of the government in playing demonetization gamble. Government has sighted long term gain out of demonetization measures but as observed by Manmohan Singh in his remarks ‘In the long run we all are dead’ (it) needs serious thinking on the part of the government,” it said. Sena further said the government should not be “too late” to exercise “corrective steps” as more complexities may deteriorate the health of the nation. “The question remains, given the timeline, will RBI score over the challenges ahead and smoothen the disarrayed state of the economy? Remember that the common man is the pulse of the economy, will he get solace after December 30?,” it asked.

Demonetisation seals RBI rate cut deal, but that will not reboot a battered economy

Most of the originally stated results of the demonetisation exercise—killing black money, corruption and terror, are disputed now by experts. It is too early to assess these outcomes. But, if there is one result for certainty with regard to the massive currency crackdown, then that is a rate cut from the Reserve Bank of India (RBI) on Wednesday (7 December)—which, perhaps, wouldn’t have happened under normal circumstances, when the rupee is struggling to recover and global factors are at play.

ReutersReuters

Reuters

Most economists forecast a quarter percentage point rate cut decision by the Monetary Policy Committee (MPC) that will be read out by governor Urjit Patel, but even a 50 basis points cut in the key lending rate of RBI repo, at which the central bank lends short-term funds to banks, cannot be ruled out now given the deep slowdown fears in the economy after the government sucked out 86 percent currency in circulation overnight on 8 November while executing the demonetisation plan.

What this means is that the MPC and the RBI are left with no option but to take a growth supportive stance sooner than it thought, said Radhika Rao, economist at Singapore-based DBS Bank. “Ahead of the looming US rate hike at the mid of this month and ongoing volatility in domestic financial markets, especially the weak rupee, the MPC would have ideally preferred to wait-and-watch before easing rates,” Rao said.

“However, the government’s recent banknote ban has raised downside risks to growth for at least two quarters, starting 4Q16. Scope of food inflation dragging headline inflation lower also keeps the door open for an easy policy bias. These are likely to prod the MPC to consider a 25bp rate cut on Wednesday, followed by another cut in 1Q17,” Rao said.

It is indeed true that demonetisation has resulted in a cash crunch that has caused considerable pain on the ground. It is difficult to assess the actual impact yet. Small traders, construction workers, services sector, perishable goods market are all hit due to the ongoing cash-crunch. The activities in the informal sector have come to a standstill considering, even on conservative estimates, close to 70 percent of India lives on cash economy. There isn’t any consensus yet on the resultant impact on the GDP.

According to former Prime Minister, Manmohan Singh, the hit that the GDP growth will take will be as much as 2 percent. Many others predict 1 to 1.5 percent and some state that it could be less than one percent. But, almost everyone, like Rao of DBS, agree that the dragging effect on the economy will continue for at least two quarters.

The growth scene is not looking good if one goes by the latest GDP growth print. The July-September growth, despite a marginal improvement in the overall numbers to 7.3 percent in Q2 from 7.1 percent in the April-June quarter, has been disappointing since the only bright spot in the GDP graph is a minor improvement in the agriculture sector. Also, there is no sign of investment activity picking up yet.

Gross Fixed Capital Formation (GFCF), which portrays the actual investment activity on the ground, dropped by close to 6 percent at constant prices. Now remember, this parameter has been contracting for the last three quarters at least. That is not a healthy sign for an aspiring, ambitious economy. When investments don’t support a growth-revival, typically, a consumption-led recovery should come to the rescue. Now, what has been happening here is the government spending, which picked up from the last quarter in a major way, has actually dropped in the second quarter, from 18.8 percent in Q1 to 15.2 percent in Q2, in terms of constant prices. As against this, private spending has shown a marginal increase during the period — from 6.7 percent in Q1 to 7.6 percent in Q2.

In terms of current prices, the government expenditure has fallen to 20.8 percent on year-basis in Q2 from 24.3 percent in Q1. The corresponding numbers for private spending is 11.7 percent in Q1 to 12.4 percent in Q2, showing a minor rise. If one looks at sectors, except the growth shown in agriculture, all other segments —mining, manufacturing, electricity, construction and services such as hotel industry— have shown a decline. This means it is consumption that has been holding the growth story and remains the main growth driver. But, this is where the challenge lies ahead in the aftermath of the demonetisation exercise. The recent PMI data, the first set of economic indicators after the demonetisation exercise, shows a decline to 52.3 in November compared with 54.4 in October. Though, theoretically, a number above 50 is growth-positive, what it indicates is a slowing trend ahead. Services PMI fell even more sharply to 46.7 in November from October’s 54.5, the first time since June 2015 that the index has gone below the 50 mark that separates growth from contraction. It was also the biggest one-month drop since November 2008, just after the collapse of Lehman Brothers triggered the global financial crisis.

Will an RBI rate cut make any major difference at this stage to aid growth? It is doubtful for a few reasons.

First, if banks wanted to lend more to industries, they would have done so already. There is liquidity surplus already in the banking system. More than the availability of cash to lend, poor demand has been hurting loan growth, especially to industries. If one looks at numbers till October (just before the demonetisation happened), bank credit to industry contracted by 1.7 per cent in October 2016 in contrast with an increase of 4.6 per cent in October 2015, with all major sub-sectors witnessing deceleration, contraction in credit include infrastructure, food processing, gems and jewellery and basic metal and metal products.

Second, the problem of NPAs (non-performing assets) continues. Till the time the bad loan stock is cleaned up and bank balance sheets turn healthier, banks are unlikely to take more risks.

Third, the demonetisation and resultant chaos on the ground would mean that consumer spending will go through a dull phase in the near-term. Bankers do not expect any major pickup in consumer lending when the economy is looking at a prolonged downturn.

Nevertheless, a rate cut must happen on Wednesday’s RBI bi-monthly monetary policy review and the full credit for that should go to demonetisation. What most economists agree is that the solution to revert to the growth path lies in the following steps — 1) resolve the cash crunch at the earliest before it does more damage and get economic activities going, 2) boost public spending and work on ways to bring in more private capital to get the economic engine going, and, 3) make sure farm output doesn’t suffer on account of the currency shortage since a crop failure could stoke inflation further and erase the inflation gains. A rate cut from RBI would be of least help at this stage to reboot the economy.

First Published On : Dec 5, 2016 12:02 IST

Mamata is symbol of honesty and simplicity, has credential to become PM: Ramdev

<!– /11440465/Dna_Article_Middle_300x250_BTF –> Yoga guru Baba Ramdev, considered a close confidant of Prime Minister Narendra Modi, on Saturday lauded West Bengal Chief Minister Mamata Banerjee, saying that she had enough credential to become Prime Minister.”There should not be any question regarding her credibility in politics. If son of a chai-wala could become Prime Minister, Mamataji could also become Prime Minister,” Ramdev told reporters.”In politics, Mamataji is the symbol of honesty and simplicity. I love her simplicity. She wears chappals and ordinary saris. I believe she does not have black money,” he said. “Once during my visit to West Bengal, when Left Front was in power, I had said the Leftists should go and Mamataji should come to power. And exactly it happened thereafter,” he said.Despite Banerjee’s staunch opposition to demonetization, which he supports, Ramdev appeared soft on her when he said the TMC supremo was actually against the procedure by which the move was being implemented.”I think she is not opposed to the demonetization move per se. But I feel she is not happy the way it was implemented”, Ramdev said at the Infocom seminar here.The yoga guru-cum-entrepreneur said, “I had planted the seeds of demonetization. I continued the movement from 2009 to 2014 and asked the government to withdraw Rs 500 and Rs 1000 currency notes as it was root cause of corruption, black money generation and terror and militant funding”. Now with demonetization, black money generation, corruption and terror funding had stopped totally, he said at the seminar.”The common people is getting inconvenienced due to cash crisis. But none is complaining against this,” he said. However, Ramdev said he believed that total cashless system could not be possible immediately and it would take time i.e. atleast six months.Praising Prime Minister Narendra Modi for the move, he sarcastically said that former PM Manmohan Singh, who had never spoken a word on any issue, had actually spoken now on the issue.”This is the effect of demonetization you see,” he quipped. Ramdev called on West Bengal Governor K N Tripathi at Raj Bhavan and termed it as ‘a courtesy call’.

UPA did ‘height organized loot’ in allocation of coal blocks: Piyush Goyal

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Lashing out at former prime minister Manmohan Singh for his criticism of demonetisation, Union Power Minister Piyush Goyal on Sunday said it was the UPA government who did the “height of organised loot” and “mismanagement of economy” in allocation of coal blocks.Goyal delivered a speech on demonetisation and its future effects on Indian economy at a city-based college. Singh had termed demonetization a “monumental management failure” and “organised loot” during a debate on the issue in Parliament. “If there was any height of organised loot and mismanagement of economy that had taken place, it had taken place during the allocation of coal block between 2006 and 2009 and if you read the files of coal allocation, you will come to know the magnitude of the scam as tremendous loot had taken place during the allocations and CAG, in their report, had mentioned of the loss of Rs 1,86,000 crore in these allocations,” said Goyal. He claimed that during the UPA government there was “competition over scams” like CWG, Adarsh, 2G, Augusta Westland.”When we are now acting against black money and corruption, the same person, who was leading the then government, who was custodian of all the system and an economist, is calling this historical move an ‘organise loot’,” he said. On the nation-wide protest called by Opposition tomorrow, he said any sane person in the country has understood that the people of the country have stood in the support of the decision. “The people of this country have shown immense faith and trust in Modiji and despite bearing hardships, everybody is saying that Modiji has done a good job,” he said. There will be benefits in the long run as the move will help eradicate unemployment, poverty in the country and farmers, women, underprivileged and unorganised sector will be benefited, he said. Asked about the government’s move against ‘benami properties’ he said in last three budgets, several moves were taken to fight against black money and corruption. “In future, you will see more thrust on ease of business and ease of taxation,” said Goyal. Appealing youths in Pune, Goyal said being an intellectual city, entrepreneurship and technology hub and epicentre of education, Pune has the potential to become thefirst city to go 100 per cent cashless by adopting e-payments options.”I was speaking to youths today and an idea came into the mind that why we should not form an action committee for digital payments and set up a target of 15 days to go about the transformation. “Through this action committee, youths can reach out to the society and arrange camps and help small traders, merchants, small time vendors and shop keepers to adopt digital payment options which are available in the market and lead towards the first 100 per cent cashless city,” he added.

Should there be ‘Bharat Bandh’ or should the route of corruption be blocked: Modi hits out at Opposition

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Prime Minister Narendra Modi hit out at opposition parties for their ‘Bharat Bandh’ call against demonetization, saying they are organising the strike at a time when he is trying to root out corruption and black money.”I am stopping black money and corruption and some are giving call for Bharat Bandh,” he said at BJP’s ‘Parivartan Yatra’ rally here in eastern Uttar Pradesh.Without naming any opposition party, Modi said, “We are trying to curb corruption and they are organising ‘Bharat Bandh’. Should there be ‘Bharat Bandh’ or should the route of corruption be blocked?” Several opposition parties have given a call for ‘Akrosh Diwas’ tomorrow to protest against the Centre’s demonetisation of Rs 500 and Rs 1,000 currency notes. The Prime Minister said the decision on demonetisation was tough, “but (the) future will be bright”.Referring to the problems being faced by the common man including villagers in withdrawing money, he advised them to take the e-wallet route. “Era of wallet has gone, you can use your mobile phone as your bank branch with the same ease with which you take snaps and send them to friends,” Modi said. Modi said just as people did not have to attend classes to learn how to use mobile phones, they can now use the device in the same way to carry out monetary transactions. “I have already said problems do come. I have sought 50 days from you. Of these, 30 days are still left and the government is taking all efforts to assuage the sufferings of people,” he said.”Have you learnt how to charge your mobile by going to school? You have learnt to operate WhatsApp. Technology has become easy. If you have (a) bank account, you can purchase whatever you want,” he added. Amid the opposition parties creating uproar over poor implementation of demonetization and stalling Parliament for days, Modi said he is aware that people are facing inconvenience.”The NDA govt at the Centre is fully dedicated to the poor, farmers, villagers and dalits,” he said amid applause from the crowd. A united opposition has been attacking the Centre in Parliament over the demonetization issue, with former Prime Minister Manmohan Singh terming the move a “monumental management failure” and a case of “organised loot and legalised plunder” which would lead to dip in GDP growth by at least 2 per cent. Modi also attacked the Samajwadi Party government in poll-bound Uttar Pradesh, saying it was not interested in implementing central schemes for farmers.Thanking the people attending his rally, he said that in 2014 elections when he was himself contesting from Varanasi, he visited many areas of the state but the crowd was not as big. “As compared to today, only half of people used to come. Now a huge crowd, including women, has come to give me blessings,” he said, adding, “I bow before you for the trust you have on me… I will not betray you.”

Demonetization row | Arun Jaitley suffering from ‘selective amnesia’, says Congress

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Taking potshots at Arun Jaitley, the Congress Party on Saturday alleged that the Finance Minister was suffering from ‘selective amnesia’ and reminded him of the nine percent average growth rate during 10 years of the UPA regime. Jaitley on Thursday accused the Opposition of inventing reasons to run away from a debate on demonetization and took a swipe at former prime minister Dr Manmohan Singh over his criticism , saying it is no surprise that he is unhappy as “maximum black money was generated” under his rule.Rejecting Singh’s contention that the GDP growth will plunge by two percent, he said demonetization will have positive impact on the economy over medium to long term as the money from shadow economy will find its way into the mainstream.Congress spokesperson Randeep Surjewala said, “Firstly let me remind Finance Minister Jaitley since he is suffering from selective amnesia that the average growth rate of the economy during the UPA was nine percent. If you see the old indices and compare the growth rate today it is 3.5%. So, whether 3.5% growth is higher or nine percent is an answer that Finance Minister Jaitley should give himself.”He further asserted that the nation wants to know from Prime Minister Narendra Modi and Jaitley about the new ‘fair and lovely’ scheme that the ruling dispensation has come up with to curb black money. “On one hand Prime Minister Modi says that he is fighting black money and on the other hand in the same breath he comes out with a new ‘fair and lovely’ scheme everyday to convert black money into white. The latest salvo being that is appearing today that they will convert everybody’s money who deposits black money by December 30 into white by taking 50 percent of the share. He will not be punished and no criminal case will be registered nor will he be asked any questions,” he added.Dr Singh dubbed the demonetization of Rs 500 and Rs 1,000 currency notes an “organised loot and legalised plunder.”Dr Singh said that while he didn’t disagree with the objective of the government, a “monumental mismanagement has taken place.” “Even supporters speak of the long run. Those who say demonetization is good in the long run, should recall the quote: ‘In the long run, we are all dead’,” he said during the discussion on demonetization in Rajya Sabha.He also asked Prime Minister Modi to find a more practical and pragmatic solution to prevent the prevailing distress on the general public in the wake of this step.

Note ban: Steps to boost spending needed on urgent basis, waiting till budget may prove futile

Demonetisation is not just causing hardships for the common man it is also shifting the focus of the economic policy maker from the future to the near term. Finance Ministry officials are reacting almost every day to address the demonetisation challenges. In the process, they may be losing the plot on economy front.

As I had pointed out on 20 November column it is the RBI that should be responding to these issues. While the RBI governor continue to be unavailable to address concerns of not just the citizens but also investors, mandarins at finance ministry continue to douse daily fires. The challenge will get tougher by the day for that the financial budget is scheduled on 1 February, 2017. The Budget date has also been advanced as the country is trying to synchronise financial year with the calendar year.

Representational image. ReutersRepresentational image. Reuters

Representational image. Reuters

The challenge is that in the short-term demonetisation is likely to have an impact on spending, trade, tourism, logistics, real estate. This needs to be addressed immediately and the government shouldn’t wait till budget to fix the problem. Technically the process of demonetisation is expected to get over by 31 December this year. The impact of it on some sectors like real estate, gold and tourism will continue in the January-March quarter as well. Therefore, at the least two crucial quarters of the year will surely get adversely affected by demonetisation if necessary steps are not taken immediately.

Some short-term measures have to be announced to accelerate spending and boost the sectors that have witnessed irreparable damage. These measures can’t wait till the budget as any delay will lead to further damage. For instance, secondary market deals in the real estate sector have crashed in last fortnight, especially after the demonetisation move. The unorgainsed segment of the sector will be hit hard as experts believe the sector generates black money vitually in every transaction. The black component in old currency notes has led to the collapse of transactions. It may recover but the impact on real estate prices is real, which is good by itself as it makes housing affordable. But deals may still not happen due to high circle rates. As the prices come down circle rates have to adjust downwards for these deals to happen. This is something only the state government can do if it wants to bring back the liquidity in the real estate market.

The central government can tinker at the most with some FDI norms. What it can do is provide for a higher income tax exemption on home loan payment to push the retail market to borrow and buy homes. But this subsidy can only come in the budget, or can it be announced now and made actionable in the budget. Such steps will help in bringing back the momentum in growth that has been lost due to poor implementation of demonetisation. As an announcement has the ability to boost sentiment.

Informal, unorganised or the MSME sector, which is the largest employer in the country, too, has been hit by demonetisation. The impact on their business has been due to the loss of liquidity or squeeze in spending in the supply chain, which means the issue is more complex for a single step that could help it directly. Consumer behavior after demonetisation indicates that people have curtailed discretionary spending to save cash. This is a serious issue because the huge of black money in the sytem in the past majorly contributed towrards the high item sales. High value items that used to be bought with unaccounted money has also vanished. To replace unaccounted money spend and discretionary spend, the government will have to take measures in the short term and not leave it till the budget.

This is one more reason for the mandarin to step out of the line of fire on demonetisation and focus on these immediate short-term measures. It is one reason too many for the RBI Governor to start responding to implementation issues. The former Prime Minister Manmohan Singh criticised the government on implementation but also polarised the issue with his statement on plunder and legalised loot. His estimate of a drop of 2 percent in GDP also seems to be strange, especially, without any explanation on how he arrived at this magic figure.

But the impact of demonetisation on the economy is real in the short term as I have pointed in the past. Therefore, it is important that officials think of some immediate steps. Any delay because of being mired in solving implementation failures is going to have a much bigger impact on the real economy.

The writer is a policy commentator based in New Delhi. He tweets @yatishrajawat

First Published On : Nov 25, 2016 17:12 IST

Demonetization: Nitish Kumar calls it ‘courageous step’, dismisses fissures in coalition

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Reiterating his support to the Centre’s demonetization decision, Bihar Chief Minister Nitish Kumar on Friday described the move as a “courageous step” even as he admitted that “poor arrangements” in its implementation were causing hardship to the common man.He also dismissed reports of “confusion or fissures” in the grand alliance in Bihar over the demonetization issue. Kumar described the Centre’s demonetization decision as “sahsik” (courageous), which, he said, would help in the fight against black money. However, the attack on black money would yield better results only when scrapping of notes is coupled with attack on benami properties and prohibition, the chief minister said. “While supporting demonetization in principle, I, with equal strength, criticise the poor arrangements for its implementation due to which common man is facing hardship,” Kumar, who is also the JD(U) National President, said.”I am seeing a minus with plus whereas many others are seeing only minuses,” he said. “See the speech of former Prime Minister Manmohan Singh in Parliament yesterday. Nowhere did he denounce the spirit of demonetization but highlighted monumental mismanagement in carrying it out,” he said. “This is the view of almost every party, even those opposed to it, and everybody is referring to improper arrangements to carry out demonetization,” he said and sought to know “how is my stand different from others on the issue?”Rubbishing reports of “confusion or fissures” in the grand alliance due to the divergent views of alliance partners Congress and RJD on the issue, Kumar said, “The grand alliance is only in Bihar and on issues concerning Bihar. On issues outside the state every party is privy to its own viewpoint…there is no confusion or fissures in coalition”. The Bihar Chief Minister had first favoured the Centre’s demonetization decision while addressing a ‘Chetna sabha’ at the start of his second leg of ‘Nishchay yatra’ in Madhubani on November 16.

DMK backs Manmohan Singh’s criticism on demonetization issue

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Congress ally DMK backed former Prime Minister Manmohan Singh for his criticism on the way the BJP government has implemented demonetization and charged Prime Minister Narendra Modi with ignoring the people by not responding to Singh’s queries on the matter. DMK Treasurer and Tamil Nadu Opposition Leader MK Stalin said the Centre was coming up with all kinds of announcements “as if they are giving sops” to people ever since the Rs 1,000 and old Rs 500 currency ceased to be legal tenders. “Former Prime Minister Manmohan Singh put it beautifully when he called it (the way demonetization was being implemented) a monumental management failure,” he said, referring to the former’s criticism of the government in the Rajya Sabha yesterday.By making such a statement, Singh had expressed his ‘anguish,’ on the matter, Stalin told reporters here. “Modi ignoring Manmohan Singh shows the extent to which the Prime Minister ignores people,” he said when asked for his views on the matter.To a question on the bull taming sport of jallikattu, Stalin said DMK would hold a massive protest demanding it be allowed next year, if the Central and state governments did not pursue the matter. The Supreme Court had recently upheld its ban against holding Jallikattu in Tamil Nadu, coinciding with the harvest festival of Pongal in January.

Demonetisation: Despite hardships, industry believes good days are ahead

Sandip Jat, who works in an apparel manufacturing company in Noida, is more than happy to receive Rs 36,000 as a three-month salary advance from his employer. Given his meagre salary, it would not have been possible to accumulate this amount in a short period of time. But, the note ban imposed by the Government of India has made it possible for him.

After the move to curb black money, it has become common to pay out advances in various forms, especially for those companies that have big amounts of cash stashed in their safes.

Bimal Jain of Punjab Haryana Delhi Chambers of Commerce says that loans and advances could be ways in which some people may try to get rid of old currency notes they had in their personal safes. Sandip is one of the beneficiaries of this largesse.

Representational image. Reuters

Representational image. Reuters

He told Firstpost that his company sells apparel abroad. And so, the company is by no way affected by the cash crunch. “The purchase of raw materials has always been made through banks by our company. The old notes, that the company had in its possession, were paid to us as salary advance. So we are facing no cash crunch,” he said.

Industry experts say that the companies that have been regularly using cash transactions are worst-hit. “Most of our transactions are made in cheques but the cash payments we make for some expenditures have been temporarily stalled. Since we have a long standing with our suppliers they have agreed to it,” says Pramod Agarwal of Surinder Devi Creations.

Jain says that the move has not only affected businesses that are used to cash transactions but even those who deal in luxury goods.

Wakeel Ahmed, who works in a company that sales car batteries, says that sales have fallen by 90 percent after demonetisation.

“ The dealer who used to order 100 batteries a day, now, does not order even 10 of them. It seems that people have stalled purchase of batteries that are mainly used in car engines,” he says.

Fall in demand is largely attributed to lack of liquidity among the people by the industry, but it hopes that sales will recover as soon as the new currency comes in.

Even though former Prime Minister Dr Manmohan Singh’s stated on Thursday that demonetisation will cause slowdown in the economy, the industry is optimistic that it will bear fruits for the economy in the future.

Pramod Agarwal, of  Surinder Devi Creations told Firstpost that the money that will be unearthed by this process will, in turn, enrich the economy.

Members of the industry also believe that demonetisation will result in a realistic pricing of various goods and commodities, which will strengthen the value of rupee.

“Once  foreign currency accumulation increases in the state coffers due to appreciation of  rupee, budget deficit will decrease. That will boost up the economy,” he adds.

In the same note Hari Prasad, proprietor of Manokamna Exports says, “For the last fifteen days I have been carrying a cheque of Rs 50,000 and not being able to encash it. Many of my workers are absent from work because they have to go to banks. Still, I am happy with the move and to make all transactions digital. It will make corruption difficult.”

Regarding the criticism that demonetisation has received, Prasad compares it with the advent of computerisation in accounting. He says that when computerisation was introduced in accounting processes, many people were wary that it will lead to loss of jobs. But now computers have become part of our daily lives. “The case is similar with demonetisation. Once people get accustomed to it, they will understand its good effects,” he says.

First Published On : Nov 25, 2016 12:26 IST

Demonetisation: Combative Narendra Modi rubs more salt in Opposition wounds

The Uri attack prompted the Indian army to warn Pakistan that the inevitable retaliation will come at a time and place of their choosing. The attempt was to set the terms of engagement and leave the opponents guessing.

Prime Minister Narendra Modi adopts a similar attitude while taking on his detractors. The Opposition has accused him of “running away from a debate” but the truth is the prime minister does not want to be seen reacting to external pressure. He seizes the narrative by setting the rules and terms of engagement, and his rivals are forced to follow a reactive instead of a proactive model.

File image of Narendra Modi. PTI

File image of Narendra Modi. PTI

We are seeing this game of one-upmanship being elaborately played out during the Winter Session logjam over demonetisation. While a united Opposition wants to put Modi on the mat on the floor of the House, the fleet-footed prime minister has been repeatedly ducking the upper cuts and the jabs and then responding with a barrage of punches of his own, but at a time and place of his choosing.

So while Congress fielded the reticent former prime minister Manmohan Singh, in the Rajya Sabha on Thursday, who tried to puncture holes in Modi’s demonetisation policy with an unusually sharp attack, Modi returned the favour on Friday.

During a book launch event at the Parliament House Annexe on the occasion of Constitution Day (26 November), the prime minister tore into his Opposition by suggesting that all charges of unpreparedness against his government are in reality the result of deep heartburn caused by the suddenness of the move. In effect, he was redrawing the moral boundaries around demonetisation, and pushing his entire spectrum of political rivals outside it. This takes the debate over black money eradication on a higher plane where shortfalls over implementation — a point the Opposition is relentlessly focussed on — are overridden by the intent of the action — a greater, common good.

The message to his political rivals was clear.

“There are times when we need to rise above politics and work for the people, that is what the Constitution tells us,” said Modi during the function. The appeal to his Opposition’s collective conscience came after he ripped it apart for being on the wrong side of the fence.

“This move by the government has faced a lot of opposition in the Parliament. Most of the criticism is that the government was not prepared to implement the decision.”

“But the issue isn’t that the government wasn’t prepared. The real problem for some is that the government did not give them enough time to prepare. That is what is hurting them. Even if I had allowed a 72-hour window, they would have said: ‘wah, wah, Modi jaisa koi nahin‘.”

On Thursday, Trinamool Congress MP Derek O’Brien had hit out at being pushed outside the moral boundary of the black money debate. Speaking in the presence of Modi during the Rajya Sabha debate, he said: “Anyone who opposes your policy is not for black money; anyone who opposes your policy is not anti-national. Why are you giving us these lectures on corruption and black money? We are opposing you because the people are suffering; we are opposing you because we believe that the economy will be killed. But why are you making this an issue? Are you some messiah and all of us devils?”

It is this wound that Modi was trying to pour more salt into by suggesting on Friday that the Opposition is criticising the move due to deep personal setbacks borne by the move to eradicate corruption. He also called for a greater push towards a more digitized economy and pointed out that demonetisation has democratized the economy, as a growing number of municipalities are receiving more money that can be spent towards improving public infrastructure.

A report published in The Times of India on Wednesday had revealed that the Centre’s demonetisation decision has led to a windfall for 47 municipalities, pushing up their total tax revenue for this month to over two and a half times the sum collected in November last year. Quoting Union urban development ministry’s estimates, the report finds that municipal tax collection for the 47 civic bodies had reached Rs 13,192 crore. Last November, the municipalities had collected just Rs 3,607 crore.

Appearing to respond to Manmohan’s charge that government has no authority to stop people from using their own money, Modi said those caught in a time warp fail to realise that money is not just printed on paper, it is also being increasingly digitised.

Calling for a greater effort towards cashless economy, Modi said it is foolish to assume that the poor are not interested in technology. A rapid increase in mobile phone penetration gives us the perfect chance to use the platform and usher in digital money. He urged the youth to do their bit in educating those who need help for a better future.

Modi had risen to power by selling a dream and promising a cleaner system. As long as the people believe he’s doing his job, the prime minister will get the allowance to usher in benevolent disruption.

First Published On : Nov 25, 2016 12:03 IST

Note ban: Govt not unprepared, critics upset as they didn’t have time to ‘prepare’, says Modi

A day after former prime minister Manmohan Singh criticised the Narendra Modi government’s demonetisation of old notes of Rs 500 and Rs 1,000, Prime Minister Narendra Modi hit back at those accusing the government of not preparing well for the move saying had the government given them chance to prepare, they would have converted all their black money into white.

Modi attacked the Opposition parties saying:

Modi was speaking at the Sansad Bhavan on Friday morning at the launch of the Gujarati edition of a book on late RSS leader Lakshmanrao Madhavrao Inamdar popularly known as Vakilsaheb. Modi has co-authored the book with RSS leader Rajabhai Nene.

Born in Satara, Maharashtra, Inamdar was jailed for eight months during the freedom struggle. He became an RSS pracharak in 1942 and handled various responsibilities in the saffron organisation. He is considered to be Modi’s mentor.

Addressing those gathered at the launch, Modi once again hailed his government’s decision to demonetise old notes of Rs 500 and Rs 1,000 saying that demonetisation has allowed common citizens of India to become a solider against corruption and black money. “India has often ranked low in global rankings on corruption. We need to improve it,” reported PTI.

According to ANI, Modi said that India must move towards a cashless economy in order to to keep pace with changing times.

Modi had demonetised old notes of Rs 500 and Rs 1,000 on 8 July evening in a televised broadcast in order to curb black money, corruption and terror finance in the country. The move has caused a lot of inconvenience to the public inlcuding daily wage earners and farmers, and reportedly caused more than 70 deaths across the country.

The prime minister also praised BR Ambedkar, ahead of Constitution Day, which is celebrated on 26 November. He said, “Our Constitution has very special place in our lives; We remember Dr Ambedkar whenever we remember the Constitution.”

With inputs from PTI

First Published On : Nov 25, 2016 10:16 IST

RSS slams Manmohan, says Modi looking at next generation, not next election

The Rashtriya Swayamsevak Sangh (RSS) has slammed former prime minister Manmohan Singh for his sharp criticism of the Narendra Modi government on the demonetisation move, saying that he should have kept his own house in order as prime minister in the UPA government.

File image of Manmohan Singh. PTI

File image of Manmohan Singh. PTI

Manmohan Singh is considered one of the top economists, but what did he do in the two terms of the UPA government as prime minister? Most of the black wealth was generated during this period, with a series of high-profile scams, and he was at the helm of affairs. Wasn’t that an organised loot of the nation’s wealth?” asked J Nandkumar, Akhil Bharatiya Sah Prachar Pramukh of the RSS.

Breaking his silence after a long period, Manmohan, during the debate on demonetisation move in Rajya Sabha on Thursday, alleged that the NDA government’s plan of scrapping high-value currency notes had led to “organised loot and legalised plunder”.

“There’s no politics behind the action taken by the Modi government against counterfeit currency and black money through this demonetisation move. Modi took this courageous decision not as a politician but as a reformist, who’s looking at the next generation, and not at the next election,” Nandkumar told Firstpost.

The Sangh Parivar has already given its thumbs-up to Modi’s demonetisation move both in its internal meetings and on public platforms.

In an official statement issued by the RSS Akhil Bharatiya Prachar Pramukh Manmohan Vaidya (a copy of which is reproduced below) mentions, “The decision taken by the government of India to demonetise high-value currency notes is in national interest and with the honest intention of setting in motion cleaner and transparent monetary transactions and practices in the country. Its impact is being felt everywhere.”

Hailing Modi’s decision of scrapping high-value legal tenders to combat counterfeit currency and black money menace, the RSS has simultaneously appealed to the public to cooperate and support the government in the demonetisation move.

LetterRSSappealonDemonetisation by Firstpost on Scribd

However, the Sangh has also admitted that the move has caused inconvenience to the people across the country.

“I had been with (Mohan Bhagwat) for over a week after the move was announced. He appreciated the demonetisation move, but showed his concern about the problem people have been facing due to the implementation bottlenecks. But, let’s not forget that the magnitude of the move is so big and it’s a first-of-its-kind initiative by the government. So, it becomes very difficult to have fool-proof implementation,” a senior Sangh pracharak closely monitoring the move told Firstpost.

File image of Narendra Modi. PTI

File image of Narendra Modi. PTI

Even Vaidya in his statement said, “We appeal to the people to cooperate and support the government in this noble endeavour, irrespective of the temporary but unavoidable inconvenience being caused.”

Sharply criticising the voices of dissent and without naming anyone in particular, Nandkumar said, “These ivory tower intellectuals, the so-called liberals, who have no connection with the common man have opposed the move. Like in 2014, after Modi became the prime minister, they spread canards against him saying, ‘Bharat is not Gujarat’. Despite facing problems and cash crunches, the ordinary people are ready to suffer temporarily and have supported the decision, unlike those who live in ivory towers.”

Following demonetisation, the nation has witnessed a major hullabaloo over the move both in the public domain and in the Parliament. A single move united the Opposition parties across the spectrum — even forcing die-hard opponents Trinamool Congress (TMC) and CPM to join hands in an unprecedented move to launch a scathing attack against the Modi government.

Interestingly, a day before the prime minister’s monumental announcement (8 November), the Congress-led UDF in Kerala had opposed the ruling CPM-led LDF, when the latter had initiated a move in the state Assembly to audit the accounts in the cooperative banks due to charges of rampant corruption. But the tables turned the very next day and the foes of Kerala found themselves joining hands against Modi.

“LDF and UDF joined hands to protest demonetisation, exposing their hypocrisy,” the RSS deputy chief of publicity and communication added.

However, the RSS has also made it clear that it doesn’t interfere in government policies and decision-making, but supported demonetisation as it’s in the interest of the nation.

First Published On : Nov 25, 2016 10:08 IST

Note ban: ‘Angry’ Opposition ‘unite’ against PM Modi, choose ruckus over debate in Parliament

The turn of events in Rajya Sabha on Thursday raises a serious question. Are the Congress and its new found friends Trinamool Congress, Samajwadi Party, Bahujan Samaj Party and Left really interested in a debate on demonetisation, in a response from Prime Minister Narendra Modi to what they think are the “popular concerns” or their singular intent is to disrupt Parliament?

Opposition members form a human chain during a protest against the demonetization of Rs 500 and Rs 1000 notes at Parliament house in New Delhi on Wednesday. PTIOpposition members form a human chain during a protest against the demonetization of Rs 500 and Rs 1000 notes at Parliament house in New Delhi on Wednesday. PTI

Opposition members form a human chain during a protest against the demonetization of Rs 500 and Rs 1000 notes at Parliament house in New Delhi on Wednesday. PTI

It now seems that the opposition wants to keep their disruptive momentum going until 28 November for their nationwide bandh call against demonetisation, which they call Akrosh Diwas Bharat Bandh. There couldn’t be an Akrosh Diwas (anger day) if the lead opposition leaders themselves don’t display or continue to display their anger till that day.

They also know that given a chance Modi, with all the eloquence at his command and ability to counter charge against his rivals, they would not be left with much to charge against him and his regime. Their anger would subside unless they find some fresh reasons to be angry and make people feel the same anger as they do. It is thus best suited to them, as part of their strategy to keep on creating a ruckus on flimsy pretexts and not to let Modi respond, at least till Monday.

Consider how events unfolded today — till noon the opposition was crying hoarse that the Modi was avoiding Parliament, which to them effectively meant insulting temple of democracy and in turn parliamentary democracy.

But then Prime Minister surprised by coming to Rajya Sabha and announcing through Finance Minister and Leader of that House Arun Jaitley that he would intervene in the debate. That effectively took the steam out of the opposition stance and for an hour it seemed an orderly debate would take place. But one realises that then the opposition had no other option but to let the debate proceed.

The opposition leaders very well knew that the Prime Minister, who happens to be the Head of Executive of the nation simply can’t afford to sit for days in both Houses of Parliament to listen to all speeches. He has other businesses to do. The minister-in-charge of the nodal ministry remains present in the House. Some other ministers also remain present and notes are given to the PM by the ministers and other staff. He also listens to the debate, as and when possible, on TV even if he is not present in the House. The Prime Minister responds in the designated time in Parliament which is an old practice.

So when the House reassembled after lunch, the Prime Minister didn’t come, the opposition was back to what they know it the best, disrupt the House and force adjournment for the day. Their arguments could sound more hollow, more so after Finance Minister asserted that PM would come and respond in the debate. The question is what makes Congress, BSP, TMC, SP, Left so determined to find common ground and disrupt the House day after day without any valid ground.

The way events are unfolding and the way Rahul Gandhi and company are making boastful claims on “opposition unity”, it seems that their concern is not about demonetisation but fighting a political war against Modi, which they in any case always wanted to. Demonetisation is only the pretext. They all are claiming to be championing hardships faced by the common man and woman on the streets due to discontinuance of Rs 500 and Rs 1,000 notes but the way they are venting their anger, albeit claiming to be on people’s behalf raises the question is there something more behind than what meets the eye.

But then too many conflicting points are being made by opposition leaders, without one caring for others’ demands. They are perhaps conscious not to cede their lead role to another leader — Rahul to Mamata or vice versa, Kerjriwal to Mamata or vice versa, Mayawati to Rahul or vice versa, Yechuri to Mamata or vice versa and so on.

Sample their contradiction and conflicts. The Congress and Left parties did not join Mamata Banerjee’s march to the President House because Rahul Gandhi, Sonia Gandhi and Sitaram Yechuri could not march in her leadership. Same happened at Mamata’s Jantar Mantar rally. Mamata also wants to overthrow Modi regime now. Mayawati wants the dissolution of Parliament and a snap poll now. Mamata and Kejriwal want complete roll back, Rahul wants constitution of JPC. Rahul and Kejriwal smell a scam but when Manmohan Singh rose to speak on demonetisation in Rajya Sabha he didn’t talk about JPC or any scam. JD(U) leader Sharad Yadav attends protest rallies but his party chief and Bihar Chief Minister Nitish Kumar is openly in support of Modi’s demonetisation move. The list of contradiction in opposition ranks would go on.

What, however, makes them come together is their known anti-Modi positioning but will that be enough to convince the people at large that they have waged a war against the present ruling dispensation on demonetisation to protect their interests. Their present difficulties bleed their heart more than getting convinced by stated objectives of Modi that his shock therapy was to fight against corruption, black money, fake currency, drug, hawala, terror and Naxal financing.

In the din the Congress and its present fellow travellers did not even listen to what their leader, former prime minister Manmohan Singh said in Parliament: “I do not disagree with the objectives of taking steps against terrorism and black money…. In the process of demonetisation, monumental mismanagement has taken place. What has been done can weaken and erode our people’s confidence in the currency and banking system,….. I say so with all responsibility that we do not know what will be the full outcome. 50 days is a short period but for those who are poor, even 50 days can bring about disastrous effects.” This essentially means that the economist and administrator in Manmohan Singh endorsed the objectives behind PM Modi’s bold move but a Congress politician in him made them add other riders. The second part can still be debated, provided his party let the Parliament function.

First Published On : Nov 24, 2016 20:13 IST

Note ban: ‘Angry’ Opposition ‘unites’ against PM Modi, choose ruckus over debate in Parliament

The turn of events in Rajya Sabha on Thursday raises a serious question. Are the Congress and its new found friends Trinamool Congress, Samajwadi Party, Bahujan Samaj Party and Left really interested in a debate on demonetisation, in a response from Prime Minister Narendra Modi to what they think are the “popular concerns” or their singular intent is to disrupt Parliament?

Opposition members form a human chain during a protest against the demonetization of Rs 500 and Rs 1000 notes at Parliament house in New Delhi on Wednesday. PTIOpposition members form a human chain during a protest against the demonetization of Rs 500 and Rs 1000 notes at Parliament house in New Delhi on Wednesday. PTI

Opposition members form a human chain during a protest against the demonetization of Rs 500 and Rs 1000 notes at Parliament house in New Delhi on Wednesday. PTI

It now seems that the opposition wants to keep their disruptive momentum going until 28 November for their nationwide bandh call against demonetisation, which they call Akrosh Diwas Bharat Bandh. There couldn’t be an Akrosh Diwas (anger day) if the lead opposition leaders themselves don’t display or continue to display their anger till that day.

They also know that given a chance Modi, with all the eloquence at his command and ability to counter charge against his rivals, they would not be left with much to charge against him and his regime. Their anger would subside unless they find some fresh reasons to be angry and make people feel the same anger as they do. It is thus best suited to them, as part of their strategy to keep on creating a ruckus on flimsy pretexts and not to let Modi respond, at least till Monday.

Consider how events unfolded today — till noon the opposition was crying hoarse that the Modi was avoiding Parliament, which to them effectively meant insulting temple of democracy and in turn parliamentary democracy.

But then Prime Minister surprised by coming to Rajya Sabha and announcing through Finance Minister and Leader of that House Arun Jaitley that he would intervene in the debate. That effectively took the steam out of the opposition stance and for an hour it seemed an orderly debate would take place. But one realises that then the opposition had no other option but to let the debate proceed.

The opposition leaders very well knew that the Prime Minister, who happens to be the Head of Executive of the nation simply can’t afford to sit for days in both Houses of Parliament to listen to all speeches. He has other businesses to do. The minister-in-charge of the nodal ministry remains present in the House. Some other ministers also remain present and notes are given to the PM by the ministers and other staff. He also listens to the debate, as and when possible, on TV even if he is not present in the House. The Prime Minister responds in the designated time in Parliament which is an old practice.

So when the House reassembled after lunch, the Prime Minister didn’t come, the opposition was back to what they know it the best, disrupt the House and force adjournment for the day. Their arguments could sound more hollow, more so after Finance Minister asserted that PM would come and respond in the debate. The question is what makes Congress, BSP, TMC, SP, Left so determined to find common ground and disrupt the House day after day without any valid ground.

The way events are unfolding and the way Rahul Gandhi and company are making boastful claims on “opposition unity”, it seems that their concern is not about demonetisation but fighting a political war against Modi, which they in any case always wanted to. Demonetisation is only the pretext. They all are claiming to be championing hardships faced by the common man and woman on the streets due to discontinuance of Rs 500 and Rs 1,000 notes but the way they are venting their anger, albeit claiming to be on people’s behalf raises the question is there something more behind than what meets the eye.

But then too many conflicting points are being made by opposition leaders, without one caring for others’ demands. They are perhaps conscious not to cede their lead role to another leader — Rahul to Mamata or vice versa, Kerjriwal to Mamata or vice versa, Mayawati to Rahul or vice versa, Yechuri to Mamata or vice versa and so on.

Sample their contradiction and conflicts. The Congress and Left parties did not join Mamata Banerjee’s march to the President House because Rahul Gandhi, Sonia Gandhi and Sitaram Yechuri could not march in her leadership. Same happened at Mamata’s Jantar Mantar rally. Mamata also wants to overthrow Modi regime now. Mayawati wants the dissolution of Parliament and a snap poll now. Mamata and Kejriwal want complete roll back, Rahul wants constitution of JPC. Rahul and Kejriwal smell a scam but when Manmohan Singh rose to speak on demonetisation in Rajya Sabha he didn’t talk about JPC or any scam. JD(U) leader Sharad Yadav attends protest rallies but his party chief and Bihar Chief Minister Nitish Kumar is openly in support of Modi’s demonetisation move. The list of contradiction in opposition ranks would go on.

What, however, makes them come together is their known anti-Modi positioning but will that be enough to convince the people at large that they have waged a war against the present ruling dispensation on demonetisation to protect their interests. Their present difficulties bleed their heart more than getting convinced by stated objectives of Modi that his shock therapy was to fight against corruption, black money, fake currency, drug, hawala, terror and Naxal financing.

In the din the Congress and its present fellow travellers did not even listen to what their leader, former prime minister Manmohan Singh said in Parliament: “I do not disagree with the objectives of taking steps against terrorism and black money…. In the process of demonetisation, monumental mismanagement has taken place. What has been done can weaken and erode our people’s confidence in the currency and banking system,….. I say so with all responsibility that we do not know what will be the full outcome. 50 days is a short period but for those who are poor, even 50 days can bring about disastrous effects.” This essentially means that the economist and administrator in Manmohan Singh endorsed the objectives behind PM Modi’s bold move but a Congress politician in him made them add other riders. The second part can still be debated, provided his party let the Parliament function.

First Published On : Nov 24, 2016 20:13 IST

Note ban: Manmohan Singh made polemical points, but his criticism won’t carry weight

When Manmohan Singh speaks, which he seldom does, it is worth listening. But his speech in Rajya Sabha on Thursday on the demonetisation issue was a let-down. Not because he is known for great speeches, but because what he said made only partial sense.

If his purpose was to highlight the government’s failure in handling the fallout of demonetisation, that is par for the course. It is possible to accept his criticism (with some qualifications) that there has been “monumental mismanagement” of the process of demonetisation. The persistent queues before some bank counters seems to justify his hyperbole, if nothing else.

Former Prime Minister Manmohan Singh. PTIFormer Prime Minister Manmohan Singh. PTI

Former Prime Minister Manmohan Singh. PTI

So far, so good. But after calling on the Prime Minister to “find practical, pragmatic ways and means to provide relief to the suffering people of this country”, he goes overboard by calling demonetisation “organised loot and legalised plunder.”

This is bunkum, and pure politics. If there was “organised loot and legalised plunder”, that happened right under Manmohan Singh’s nose, with the 2G, Coalgate and Commonwealth Games scams being exactly that. The former PM was directly linked to those instances of “organised loot” since A Raja pulled off the scam by forcing Singh to look the other way, and Coalgate happened in a ministry Singh was himself in charge of for a while.

Another point he made was that demonetisation would reduce the GDP by two percentage points, but we won’t know if this is right till the year is over. But the best estimates of professional forecasters are far below what Manmohan Singh’s crystal-ball has indicated. Goldman Sachs sees a 1.1 percent fall, Care Ratings 0.5-0.3 percent, Emkay Global 0.9 percent, Icra 0.4 percent, and ICICI Securities by 0.4 percent. Barring Ambit Capital, which adopted a faulty methodology to come up with an unbelievable GDP drop of 3.3 percent from earlier estimates, not one projection comes anywhere near what Manmohan Singh’s claims.

The third point Singh made was that demonetisation would “erode our people’s confidence in the currency system and in the banking system.” For good measure, he added: “I would like to know from the prime minister the names of any countries he may think of where people have deposited their money in the banks but they are not allowed to withdraw their money. This alone, I think, is enough to condemn what has been done in the name of (demonetisation…”.

Whether demonetisation and the replacement of old notes with new ones are enough to damage confidence in the banking system is questionable. One would have thought that prolonged inflationary policies through unabated money printing — which was what happened during UPA 2, when the fiscal deficit crossed 6 percent — would have done more to debase the currency than a demonetisation to replace currency notes. And just to refresh his memory, the first major bank scam happened during his watch in 1992, when Harshad Mehta actually looted bank cash to make hay in the stock markets. And as for restrictions on people drawing their own cash, any banking system can — at times — place such restrictions. Banks even now place restrictions on daily cash withdrawals from ATMs. When banks fail, then too restrictions happen.

Singh also seems to have forgotten the Indira Gandhi emergency, when the government froze a big chunk of citizens’ earnings in compulsory deposits in order to contain inflation. If that did not bother Singh, one wonders why the orderly withdrawal of deposits is a great curtailment of citizens’ rights.

While Singh is right to say that such restrictions do not happen except at times of crises or bank failures, surely temporary restrictions at a time of policy change can be justified?

Perhaps the best point Singh made was the one where he pointed out that while 50 days to restore normalcy is reasonable, for the poor 50 days of financial denial could be “torture”. For good effect, he quoted Keynes to say that in the long run, we are all dead. So the short-term does matter – at least in politics.

The former prime minister had some good lines to offer in a polemical sense, but one doubts if this was a former Reserve Bank Governor and finance minister talking. He did not make the kind of heavy-duty points that one expected from him. He delivered some below-the-belt punches without realising his own midriff is vulnerable.

First Published On : Nov 24, 2016 17:31 IST

Parliament Winter Session: PM Modi reaches out to Opposition in Rajya Sabha

New Delhi: After days of confrontation between government and opposition, Prime Minister Narendra Modi on Thursday reached out to the rival parties as he walked across in the Rajya Sabha and exchanged pleasantries with his predecessor Manmohan Singh and other leaders of Congress as well as JD(U), NCP and DMK.

File photo of Narendra Modi. PTIFile photo of Narendra Modi. PTI

File photo of Narendra Modi. PTI

Modi, with Finance Minister Arun Jaitley and Minister of State of Parliamentary Affairs Mukhtar Abbas Naqvi in tow, made the gesture when the Upper House went into lunch break amid a debate on demonetisation.

Prime Minister Modi shook hands and was seen chatting with Singh, as also Leader of the Opposition Ghulam Nabi Azad and Anand Sharma. Modi also chatted with JD(U) leader Sharad Yadav, Praful Patel of NCP and DMK’s Kanimozhi and some other leaders.

Earlier, Singh attacked the Government over demonetisation, saying it was a “monumental management failure” and a case of “organised loot and legalised plunder.”

Singh said the decision will result in decline of GDP by 2 percent.

The opposition had been stalling the House over the last five days, targeting the Prime Minister and demanding his presence in the House for resumption of debate on demonetisation, which had begun on 16 November.

First Published On : Nov 24, 2016 14:55 IST

Demonetisation day 15: Three-year-old dies in queue; driver flees with Rs 1.37 crore cash

In Parliament on Thursday, former prime minister Manmohan Singh said that the demonetisation move by the government has caused the common man and small businesses much hardship, dubbing its implementation as ‘monumental’ mismanagement. The former prime minister further said that what has been done can weaken and erode people’s confidence in the currency and banking system.

The news updates on the 15th day since the demonetisation of higher denomination notes, show how the people involved might cause hardships, as compared to the scheme itself.

Three-year-old death

A three-year-old girl allegedly died wile her labourer father waited in a queue to withdraw money from a bank in Uttar Pradesh, for her treatment, according to a Hindustan Times report.

Dharmendra was standing in line at the Allahabad UP Grameen Bank in Tindwari in Banda to get money to treat his three-year-old daughter, Ankita’s high fever. He got her to the bank with him on Monday and wanted Rs 2,500 from his account, and had even filled the form. Though, people let him go ahead in the queue, he alleged that the bank manager refused to give him cash. And by the time he stepped out of the bank his daughter passed. Some angry villagers blocked the Banda-Fatehpur road, demanding action against the manager but it was lifted when police promised to take action.

Nine-year old’s death

An unwell nine-year-old died, before his father could rush him into the nearest medical facility in Mansar on Thursday, according to a report by The Indian Express. Mohammad Haroon, the father, said he had to walk for 30 kilometres through hills and forests in from Doonga village, in Jammu and Kashmir, because he did not have any currency notes to pay for travel. He possesed Rs 29,000 in scrapped notes but could not get it exchanged in two Jammu and Kashmir Bank branches. However the managers of both branches have said that he should have approached them and conveyed the urgency of the situation.

Samba district magistrate Sheetal Nanda has sought a report over the incident, however she feels that Haroon’s bank visits have not led to the child’s death.

Representational image. PTI

Representational image. PTI

Driver flees with Rs 1.37 crore cash

Giving a slip to the security guard and two bank employees, a contract driver of a logistics firm fled with Rs 1.37 crore in cash in a van from a busy road in the city centre on Wednesday in Bengaluru, according to an IANS report.

The incident occurred between 2-3 pm when the accused Domnic, 45, drove away with the cash and vanished after the two employees went inside Bank of India’s KG Road branch, while the guard got down from the vehicle to attend nature’s call, Deputy Commissioner of Police MN Anucheth. The cash in the form of Rs 2,000 new notes and Rs 100 notes were part of the amount the logistics firm (Logi-Cash) collected from two other banks in the city earlier in the day.

Rs 60 lakh found in RKM

Two unclaimed bags with Rs 60 lakh in demonetised Rs 500 and Rs 1000 currencies were recovered from Laitumkhrah premises of Ramkrishna Mission in the Shillong, near the temple, and handed over to the Income tax officials, police said on Wednesday.

Allegedly the bags were actually found on 12 November but the RKM officials at Laitumkhrah took time to report since they had waited for a nod from their headquarters in Kolkata. Since the RKM cannot accept donations from anonymous donors and that they had to put the same in the book of accounts, the matter was reported to the police days after. The identity of the person who kept the huge cash at the premises also remained untraced since the organisation installs CCTVs only during pujas.

Pig in the row

A piglet queued up in front of an ATM in Hyderabad, says a report by The Times of India.

‘Bunty’, the white piglet who plays a lead role in the upcoming Telegu film Adhugo, was in the arms of the film director Ravi Babu who had stopped to withdraw some money. Allegedly, Bunty felt uncomfortable in the car, and the director decided to bring him out for some air. His assistant director clicked the picture that is now going viral.

With inputs from agencies

First Published On : Nov 24, 2016 14:33 IST

Demonetisation: PM Modi’s avoidance of Parliament is serious, lacks logic and mocks democracy

At the height of the Weimer Republic, many Germans derided their Reichstag (parliament) as the “teuerste Gesangsverein Deutschlands” (the most expensive singing club) because their “elected representatives” gathered there only to sing ‘Deutschland-Deutschland’ and listen to Hitler’s speeches during sessions.

Flowers in full bloom at Parliament house during the winter session, in New Delhi on Wednesday. PTIFlowers in full bloom at Parliament house during the winter session, in New Delhi on Wednesday. PTI

Flowers in full bloom at Parliament house during the winter session, in New Delhi on Wednesday. PTI

Unfortunately, on current evidence, it is not even song and bhashan in the Indian Republic.

The Indian Parliament, considering the current arc of democracy, runs the risk of turning into India’s most expensive shouting club where members gather just to rant and scream while the Prime Minister makes his speeches on Twitter, in Tokyo, at election rallies close to the site of a train accident that kills 146 people and at rock concerts.

How the mind harks back to the man who promised to treat it like a temple of democracy! How it goes back to PM Modi’s first tears in a series of many that were to periodically move the lachrymose nation! Standing on the footsteps of Parliament on 20 May 2014, after becoming the PM-elect, Modi prostrated at the main entrance and after choking on his words declared: “This is the temple of democracy.”

Ironically, the temple is still there, but the chief priest (sevak, if you will) is busy at concerts. And the bhakts (devotees) are dancing to rejoice the sacrilege.

How we are reminded of Arun Jaitley’s sermons while he was leader of Opposition in Rajya Sabha during UPA 2. Of his words: “Parliamentary obstructionism should be avoided. It is a weapon to be used in the rarest of the rare cases… If parliamentary accountability is subverted and a debate is intended to be used merely to put a lid on parliamentary accountability, it is then a legitimate tactic for the Opposition to expose the government through parliamentary instruments available at its command.”

It has been almost a fortnight since Modi disrupted the life of a nation of 125 crore with his “demonetisation” experiment. Without any debate, without consulting his colleagues, keeping even top functionaries in the dark, he has brought millions of Indians on the road — both literally and figuratively.

Since then he has laughed, cried and recited Bob Dylan poetry but evaded the very thing he was elected for — face Parliament, debate his decision on the floor of the House with representatives of the 69 percent Indians who did not vote for him. Like the Weimer Republic, he seems to have unilaterally accorded himself the powers and privileges of the ‘Enabling Act’ without even going through perfunctory parliamentary motions.

India, it must be reminded, is a parliamentary democracy and not a tin-pot dictatorship or an oligarchy where decisions are taken by a cabal in a closed room and then handed down the line for people to follow and execute. It is the fountain of our democracy, the place from where every Indian institution derives its moral, legal and administrative legitimacy. So, even if the PM enjoys executive powers, he can’t run away from Parliament, especially when it is in session and deny it the right to debate and question his decisions. He is duty bound to face Parliament and be answerable to it.

But, it is clear from the government’s history, the PM just won’t find enough time for Parliament. But, if Twitter is the new pulpit of the high priest of the “temple of democracy, why not wind up Parliament completely? Why not rewind the clock and turn our Republic into a Mughalia-Timuria sultanate where the ruler sits on his peacock throne and issues firmans after holding a darbar-e-khas?

The argument that the PM doesn’t need to bother engaging Parliament because he has the approval of the people and the Opposition can be circumvented is flawed. To consider some “baazaru-type” opinion polls (PM’s own words) as vox dei is tantamount to ignoring the lessons of history.

Since when have opinion polls become a reflection of popular mood and thus a pretext for ignoring Parliament? Since the days they forecast a resounding win for the BJP in Bihar? Since the days Britain believed Brexit was just an empty jumla? Since the days opinion polls predicted Hillary Clinton has 82 percent chance of becoming US president?

The problem with the PM’s refusal to face Parliament is all the more serious because he has no logical reason to do so. The government enjoys a comfortable majority, the Opposition is fragmented and leaderless, and the PM himself is a master of rhetoric and oratory. But, it seems he has utter contempt for the Opposition and uses his silence as a strategy to ridicule his rivals and make debates look like a waste of time. His absence is not born out of necessity but perhaps the unstated belief that Parliament deserves no explanations or answers.

But, this is a dangerous precedent. Even at the height of the Opposition ruckus during the UPA scams, for whatever it was worth, the then prime minister Manmohan Singh used to sit poker-faced in Parliament, showing that even if he did not have the courage to respond to charges and questions, he at least had enough regard for the rituals of democracy. But, Modi is setting a precedent that could have disastrous ramifications in the future: He is telling us that Indian PM is not the primus inter pares, but the supreme leader.

That, the temple of democracy can wait because the demigod of democracy is busy at a concert.

First Published On : Nov 23, 2016 15:50 IST

Patna-Indore Express tragedy: Doesn’t rail safety merit same zeal as demonetisation?

Some subjects — like railway safety for example — do not lend themselves easily to political stunts; jolts that are meant to create dramatic and transformative policy changes.

Consider this Sunday’s Indore–Patna Express accident that killed over 140 people and injured 200 more. Most of the dead and the injured belonged to India’s underclasses, which continue to remain dependent on the vagaries of the neglected Indian railway system. Even on the register of rhetoric, railway safety does not figure on the agenda of politicians and governments. And things are no different for the present dispensation.

Over 140 people were killed in the Patna-Indore Express tragedy. PTI

Over 140 people were killed in the Patna-Indore Express tragedy. PTI

The terrible accident occurred at a time when the Narendra Modi government has — in one fell swoop — overturned the country’s entire monetary system. One cannot help but wonder why the government did not invest the same missionary fervour and energy it has put into demonetisation, in ensuring safety for millions of passengers who travel by train, especially when train travel continues to be very risky for millions of ordinary passengers. With the expansion of the civil aviation sector and proliferation of airlines, the well–heeled hardly ever travel by train any longer. Not only has the government neglected the plight of millions, a few months ago, it even initiated a mechanism that would inflate ticket prices based on the number of seats being filled in certain classes of the train.

As an article in The Washington Post on Monday pointed out, despite having the world’s third largest railway system, the Indian railway system “lacks modern signaling and communication systems. Most accidents are blamed on poor maintenance, outdated equipment and human error.” Moreover, the massive territorial reach of the railways notwithstanding, train accidents continue to occur with alarming regularity, killing large numbers of poor people. A 2012 government report put the annual death toll in train accidents at 15,000.

Faced with such a grim situation, several questions come to mind. Why did the central government not prioritise railway safety over the recovery of black money? Why is there so little discussion in the corridors of power about protecting lives of people at risk for doing something as ordinary as travelling by train? Why did the Modi government (although all previous governments are equally culpable) not push through measures as drastic as the monetary measures we are now witnessing, to put the railways squarely at the top of government’s agenda?

The possible answers draw attention to the cynical ways in which contemporary politics is conducted and policies are implemented. Every move is turned into a theatrical spectacle or a policy stunt that aims to create racy, eye–grabbing headlines, or capture votes by the dozen. The government headed by Modi that loses no opportunity to assume the role of a preacher preaching from the pulpit, is no different in this matter than the many governments before it. In fact, it can be argued — especially after demonetisation — that the present regime has shown itself to be more driven by political stunts than it predecessor, the Congress–led United Progressive Alliance. After all, Manmohan Singh, with his sombre demeanour, could hardly hold a candle to the theatrical personality of Narendra Modi.

The fact of the matter is, of course, that the issue of railway safety does not cater to the politics of the spectacle in the same way as, say, the recovery of black money or the introduction of a uniform civil code. This government is all about the spectacle. The slogan of “Swachch Bharat”, for example, though focused on a ‘dry’ subject, was nevertheless easy to turn into a media event. Remember those images of Modi wielding a broom stick — and how they dominated the news cycle? We could also think, in this context, of the sudden and massive government initiative to popularise yoga. Once again, images of the prime minister performing yoga in Janpath, with senior ministers clumsily following in his footstep, were good material for social media campaigns and publicity.

The recent demonetisation drive falls into this same genre of politics that looks to produce ‘shock and awe.’ Railway safety, is, by comparison, boring and mundane.

It is the matter of stock–in–trade, conventional policy reform. The government remains unmoved by the sheer urgency of the situation. Never mind that safety measures would directly impact the lives of ordinary citizens.

Following the loss of lives in the latest accident, the Prime Minister tweeted that he was “anguished beyond words,” and promised to modernise Indian railways. One would be entirely justified in asking Modi why the railways are so low on the list of priorities for his government. But one also has the sneaky suspicion that until the issue can be turned into a photogenic event, not much will happen.

First Published On : Nov 22, 2016 08:43 IST

CWC unanimously picks Rahul as next Congress President, all eyes on Sonia Gandhi

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Rahul Gandhi’s appointment as Congress president appeared imminent on Monday with members of the Congress Working Committee, its highest decision making body, unanimously voicing “strong sentiment” for his elevation for the first time at a meeting which Sonia Gandhi gave a miss. It was party veteran AK Antony who set the ball rolling at the meeting, which lasted for four hours, when he spoke about the need for Rahul to take over the mantle of the 130-year-old party from his mother and Congress chief Sonia Gandhi. All other members, including former Prime Minister Manmohan Singh followed suit.”Members unanimously expressed their strong sentiment that accepting the wishes of crores of Congress workers and well wishers, Rahul Gandhi take over as the president of the Congress party”, Antony told reporters while briefing on the deliberations. Antony said all members including Manmohan Singh, insisted it was “high time” Rahul took over as party chief and the Congress mobilised “all forces” to take on “anti-people and dictatorial” policies of the Modi government.Rahul, who presided over the meeting as Sonia Gandhi was reportedly indisposed, said he was ready to accept whatever responsibility is bestowed upon him by the Congress president and the CWC, in “fighting for the idea of India.” At the briefing, both Antony and chief party spokesman Randeep Surjewala evaded questions as to when exactly Rahul would take over the reins of the party from his mother and whether it would happen on November 19, the day the AICC has organised a grand celebration on the birth centenary of Indira Gandhi. “We are very hopeful”, a senior party leader said when asked whether the elevation would happen before UP assembly polls.Sonia Gandhi has created a record by being at the helm of the 130-year-old organisation since early 1998 succeeding the late Sitaram Kesri who was ousted by the CWC. “It is for the first time that the CWC is making such a recommendation. We are sure that the Congress President would give it proper care and attention”, Antony said replying to a volley of questions on the issue.Surjewala said senior CWC members would personally meet the party chief as a “follow up” action regarding their recommendation for Rahul’s elevation. After Sonia takes a decision, the CWC would meet again to formally ratify it. Rahul was appointed party vice-president in January 2013 at Congress’s brainstorming session in Jaipur. The talk about his elevation has been going on for quite some time now. Leaders like Jairam Ramesh had even insisted that Rahul was the “de facto” (in fact) leader who has to become “de jure” (in law). Antony said Sonia Gandhi will not nominate her successor as Congress President. “It is not her decision. She is not nominating the Congress president,” he said. “This is the first time the CWC has recommended (Rahul’s elevation). The Congress president will not nominate the Congress president. The Congress Working Committee of AICC has to take the decision. (It is) the first time the entire CWC met today and unanimously recommended that Rahul Gandhi should take over.”He said, “For the first time, the entire CWC, including former Prime Minister Manmohan Singh, expressed strong sentiment of crores of Congress workers and sympathisers that Rahul Gandhi must take over the presidency and mobilise other forces in its fight against the communal forces, dictatorial forces of the government, RSS and the Sangh Parivar.” “The unanimous sentiment of the CWC has ben noted and will be conveyed by senior members of Congress Working Committee to the Congress president,” Surjewala said.It is high time the Congress mobilised all the forces to fight against the anti-people and dictatorial policy of the Modi Government and also the RSS, Sangh Parivar and BJP’s policy of communal polarisation and destruction of peace and social harmony in the country, Antony said. On what Rahul told the CWC members after being urged to take over the reins of the party, Surjwala said, “For him, the issue is to fight for the idea of India to ensure that decisive fight, including (protecting) the rights of media is carried to a logical conclusion and any responsibility that helps him realise that objective, he is always willing to more than take on that mantle and fulfil that responsibility.”The CWC also decided to seek another extension for a year from the Election Commission for completing its organisational elections. The current extension expires on December 31. Antony, however, said delaying the organisational polls had no connection with elevating Rahul Gandhi to the party president’s post, apparently hinting at the possibility of Sonia stepping down to clear the way for her son even before the party elections have been wrapped up.”We will cross the bridge when we come to it”, Surjewala merely said when asked whether the CWC meeting saw any demand being raised for a larger role for Priyanka Gandhi in the party.In his opening remarks, Rahul Gandhi made a scathing attack on the Modi government, saying democracy is going through “one of its darkest hours” with the ruling dispensation “obsessed with power and seeking to silence” all those who disagree. Rahul alleged that “hiding behind the cloak of national security, civil society is being intimidated (by the government) for asking questions.”Alluding to the one-day ban on Hindi channel NDTV India, Gandhi said, “TV channels are being punished and asked to shut down. The opposition is being arrested for holding the government to account”. “Democracy under the present dispensation is going through one of the darkest hours,” he said, adding that all attempts by the government to suppress fundamental freedom by “abusing” state power would only strengthen the Congress’ resolve to defeat such “dangerous designs”.

Rahul Gandhi heads CWC meet after Sonia Gandhi skips due to poor health

New Delhi: With Sonia Gandhi indisposed, Congress Vice President Rahul Gandhi on Monday presided over the crucial Congress Working Committee (CWC) meeting which will take a decision on the party’s organisational election.

File photo of Rahul Gandhi. PTI

File photo of Rahul Gandhi. PTI

This is the first time that Rahul has presided over the meeting which is being attended by Congress top brass.

46-year-old Rahul was appointed Congress Vice President in January 2013 at Jaipur ‘Chintan Shivir’.

Senior party leaders Manmohan Singh, P Chidambaram, Ghulam Nabi Azad, Janardan Dwivedi, Ahmed Patel, Ambika Soni and AK Antony are among those attending the meet and will decide on the possible deferring of organisational election to next year.

The meeting assumes significance as it comes ahead of winter session of Parliament starting 16 November where the Congress is seeking to corner the government on several issues including freedom of speech and expression in the wake of the one-day ban on a Hindi news channel over its coverage of Pathankot terror attack.

The controversies over surgical strikes, killing of eight Students Islamic Movement of India (SIMI) activists in an alleged encounter in Madhya Pradesh, triple talaq and uniform civil code are also likely to be raised by the Congress.

The meeting is unlikely to take a decision on elevation of Rahul Gandhi as a section within the party feels that this should be done after the assembly elections in Uttar Pradesh and Punjab.

The organisational elections in Congress are overdue and the party had sought time from the Election Commission to complete the process by 31 December. The party had informed the poll panel about it as required under the rules.

Besides the organisational polls and the strategy to be adopted for Parliament session, the meeting would also take stock of the current political situation and discuss its plans for assembly elections in some states including Uttar Pradesh and Punjab due next year.

The CWC meeting comes at a time when a section of party men feels that Congress President Sonia Gandhi, 69, should hand over the mantle to her son as she is suffering from ill health, especially after her roadshow in PM Narendra Modi‘s constituency of Varanasi on 2 August when she was hospitalised.

Real threats to India are communal and social violence, not Pakistan or China: Former NSA

Washington: The real threats to India are “internal” and emanate from communal and social violence, not from outside forces such as Pakistan or China, former national security advisor Shivshankar Menon has said.

Asked if Pakistan or China pose an existential threat to India, Menon said: “No”.

Former NSA Shivshankar Menon. Agencies

Former NSA Shivshankar Menon. Agencies

“In terms of national security, I think the real threats are internal,” he told PTI.

“There’s no existential threat to India’s existence today externally, unlike in the 50s or when we were formed. And for many years till late 60s there were actual internal separatist threats, not any more. I think that we have actual dealt with,” Menon said.

His long career in public service spans diplomacy, national security, and India’s relations with its neighbours and major global powers. Menon served as national security advisor to Prime Minister Manmohan Singh from January 2010 to May 2014.

Menon’s first book post retirement Choices: Inside the making of India’s Foreign Policy is all set to hit book stores globally next week.

Asked to elaborate on what he meant by internal threats, he said: “If there are real threats to India, to the idea of India, India’s integrity, today they actually come from within the country.”

“If you look at violence in India, deaths from terrorism, from left wing extremism, declined steadily throughout this 21st century until 2014-2015. Even now the basic trend for terrorism, left wing extremism is down. What has increased is since 2012, communal violence, social violence, internal violence has increase. That is something we need to find a way in dealing with,” Menon said.

“This is not a traditional law and order problem, which our traditional instruments, the police, the states know how to deal with. You look at violence against women, communal, caste violence, if you look at those firms of violence, these are all a result of tremendous social and economic change of uprooting of population, urbanization… various forms of change, which we still need to learn how to deal with,” he said.

Menon said those are the threats, which in the long run, has a “potential to make real difference”.

“India has changed. It is normal. It happens to most societies where there is change. But you also have to learn new ways of dealing with,” he said and attributed the new threats to the rapid and fast development of the country.

When asked that some people attributed this to the BJP coming to power, Menon said even that is a consequence of the change that the Indian society is undergoing now.

Menon previously served as India’s foreign secretary from 2006 to 2009 and as ambassador and high commissioner to Israel from 1995-1997, Sri Lanka (1997-2000), China (2000-2003) and Pakistan (2003-2006).

Why Arvind Kejriwal should stop talking and probing into ‘surgical strikes’

Dear Arvind Kejriwal,

When answering a question does more harm than good, it is better to let go.

Yes, I am talking about your recent video in which you have paid Prime Minister Narendra Modi a left-handed compliment by lauding him for the surgical strikes along the Line of Control (LoC) and then asked him to shut up the disbelieving Pakistanis by furnishing the proof.

Don’t get this wrong. Asking questions, seeking answers, participating in a debate is your fundamental right as an Indian citizen and popular leader. Those calling you a Pakistani sympathiser, traitor, turncoat and assorted names mistakenly presume India is a fascist country where democratic dissent is tantamount to treachery.

Arvind Kejriwal praised PM Modi and the Indian Army for the surgical strikes. Screenshot from YouTube video.

Arvind Kejriwal praised PM Modi and the Indian Army for the surgical strikes. Screenshot from YouTube video.

In case you haven’t noticed, we are in the middle of an age where asking questions, challenging a narrative is a sure-shot way of getting yourself branded anti-national. We have somehow managed to erase the idea of a Republic based on the spirit of enquiry, culture of shastrarth and principle of freedom of expression.

In the minds of the tyrannical who wish to silence our dissenting voice, perhaps ‘Jana Mana Gana‘ may have been replaced with ‘Jo Tumko Ho Pasand Wohi Baat Kahenge’ as our national anthem. So, when they call a day a night, they expect everyone to close their eyes and feel the darkness all around.

Questioning established beliefs is so passé in today’s India that had Galileo been around, he would have politely accepted that the world revolves around India and the Sun is just a satellite we launched. There is an epidemic of naivete and gullibility unfolding out there. Nobody is immune.

Yet, in a Voltairian way, while upholding your right to question, I would call your attempts to dig deeper into the surgical strikes by our Army as injudicious, even inimical to the interests of the very people you seek to represent.

Let me address the question you want answered. Did India really conduct surgical strikes along the LoC? Well, frankly, does it really matter?  The objective of the strikes – and unlike you I believe Indian forces, like several times in the past, did target terror camps between Bhimber and Muzzafarabad – was to give the Indian public a sense of victory, satiate their demand for retribution after the Uri attack. And, in doing this, it was also important to keep the details hazy to ensure Pakistan gets to laugh off our aggression and is not forced to retaliate with bigger force, setting off a cycle of vengeance.

How brilliantly it has all worked out: We have got our victory, they feel undefeated. We have hit them but they claim not to be hurt. It is a win-win for everyone, except Arnab Goswami, who, unfortunately, may not lead an Armageddon from his TV studio.

Why would you want to disrupt this happy equilibrium now that NSAs of the two countries have reportedly started to talk about de-escalation? Why would you scratch the wound when it is showing signs of healing? Let it go.

Sometimes the polite way of dealing with competing narratives is not to shout down the other but to silently choose the one that suits your beliefs. Like Yan Martel wrote in Life of Pi, everything is open to multiple interpretations, believe the one that makes you happy.

As BBC argues in a fascinating article on human response to myths and facts, challenging a notion may sometimes lead to greater damage. “(Psychologist Stephan) Lewandowsky explains that our beliefs are embedded in our “mental models” of the way the world works; each idea is interlinked with our other views. It’s a little like a tightly bound book: once you tear out one page, the others may begin to fray as well,” BBC argues.

So, let the pages in this chapter of India-Pakistan rivalry remain.

Frankly, the pursuit of national interest and, more than that, common public good, is much more pious than the quest for facts to score political points

Your fear, and I can sense it, of war deciding the political future of politicians, is unfounded. In 1974, Indira Gandhi, the ‘goddess that dismembered Pak’ was at the peak of her unpopularity. In 2002, Atal Behari Vajpayee mobilised soldiers on the border, talked tough and was yet humiliated in the next election. And in 2009, Manmohan Singh won the election without even firing a shot in retaliation to the 2008 attack. Step out on the ground, place your ears to the political pulse of real India, you would know that people know what to choose between war and peace.

But, you can ruin it all. Let’s presume with your relentless tirade, you force facts to come out, one way or the other. What happens next? It will ensure that political leadership of one of the governments on either side of the Radcliffe Line is discredited and humiliated, the symbiotic equilibrium of victory and denial is disturbed. As a nation seethes in humiliation, warmongers will work up a hysteria for tough measures to restore their sullied pride.

Trust me, if that happens, you would be the one to blame. So, abandon your verbal strikes immediately and go back to the policy that has never failed humanity: strategic restraint.

How to tackle Pakistan? Surgical strikes and the future of Indian military responses

First came the cross-border raid by the Indian Army’s Special Forces in Myanmar in June 2015. The raid targeted the Northeastern insurgent group NSCN-Khaplang’s training camps, to avenge the insurgent group’s ambush of the Indian Army’s convoy a few weeks earlier that killed 18 soldiers.

And now comes last week’s cross-LoC raid dubbed ‘surgical strikes’ by the Indian Army’s Ghatak commandos on the night of 28 September. The raid targeted terrorist launch pads across the LoC in northern Kashmir in Kel, Shardi, Bhimber and Lipa sectors in the Pakistan occupied Kashmir — launch pads that have, over the years, figured prominently in the intercepts of the intelligence agencies as ones facilitating infiltration.

There is no clarity on how the raid exactly happened — despite a series of ‘briefings’ from the army to those journalists who are close to the government; but it is clear that the raid has caused extensive damage to the terrorist launch pads, killed more than 40 terrorists and at least two soldiers of the Pakistan Army. This is the beginning of a new offensive posture from India.

Representational image. PTI

Representational image. PTI

Earlier too, the Indian Army had undertaken many cross-LoC and cross-border raids in the pursuit of the militants. On the eastern borders, these raids mostly took with the consent of the neighbouring States, while on western borders they were covert operations. But one thing was common: There was little public acknowledgement of these raids from India or the Indian Army, to maintain ‘plausible deniability’.

This strategy had its advantage and the disadvantage.

The advantage was that by sanctioning such a raid to target the militants, the army was able to keep the morale high of its rank and file. It showed that the army would not take the continued targeting of its officers and jawans by terrorists lying down. However, the disadvantage was that by maintaining deniability, the government couldn’t satisfy the citizenry, which after repeated terrorist attacks, looked out for ‘retributive justice.’ And that invited the tag of India being a ‘soft state’. The only time that these strikes were publicly acknowledged by the army was during the beheading of the Indian soldiers incident in January 2013. That acknowledgment too had come a few months after the operation was carried out.

So what is new this time?

Two things.

First, the public acknowledgment of the raid in a very pointed statement from the Director-General of the Military Operations of the army, at a joint briefing with the Ministry of External Affairs. This no-bars hold approach is significant for its signalling to Pakistan, its sponsors, the international community and most importantly, angry Indian citizens — who have had enough of Pakistan’s machinations. No wonder then that the American National Security Advisor Susan Rice called up her Indian counterpart Ajit Doval just before the raid, to convey that Washington would be with New Delhi to deal with the after-effects of the surgical strike. The public acknowledgment of the attack also shows that India is also testing Pakistan’s bluff on nuclear weapons and see how much the logic of ‘nuclear escalation’ can be stretched.

Second, the immense political capital spent in planning the raid: A response to the Uri attack of 18 September 18 that had angered Indians. Unlike earlier, when the army used to inform the political leadership about the planned cross-border/LoC operation, this time the initiative for such an operation came from political leadership that sought to direct the course of the operation.
Now that Pakistan has been scurrying for cover and looking for a response, will this mend Pakistani behaviour?

It looks unlikely.

It will take more than a cross-LoC surgical strike to make Pakistan withdraw its support to anti-India terrorist groups and cross-border terrorism. The government has already been considering other measures to corner Pakistan and isolate it diplomatically. Will this be the standard response of India to the future terrorist attacks coming from Pakistan?

It’s hard to say.

Surgical strikes and cross-LoC raid look feasible options if the Pakistani Army and the ISI keeps up with its strategy of executing terrorist attacks in Indian states bordering Pakistan — like Uri and the previous attacks in Udhampur, Pathankot, Gurdaspur, and the rest. But if the ISI manages to repeat what it had done in Mumbai in 2008 or revives its campaign of causing serial blasts in major Indian cities, then this sort of response of surgical strikes may look harder to execute, particularly if the attack has its roots exclusively in Pakistani Punjab, and not PoK. Then the Indian government and the Indian Army will have to think of new ways to militarily respond to Pakistan.

There is no clarity on how the raid exactly happened — despite a series of ‘briefings’ from the army to those journalists who are close to the government

This was exactly the sort of dilemma with which the government of former prime minister Manmohan Singh grappled in the aftermath of the 2008 Mumbai attacks when a cross-LoC raid looked like militarily the least punitive response against Pakistan.

In the coming days, Pakistani generals will certainly be rethinking their terrorism strategy against India. Expect more terrorist attacks on Indian soil as the ISI tries to reclaim lost ground. India too will need to re-evaluate its military options to keep up with the Pakistani strategy.

dna Evening Must Reads: Nepal calls off SAARC summit; Congress says Manmohan also carried out surgical strikes; and more

<!– /11440465/Dna_Article_Middle_300x250_BTF –>1) SAARC Chair Nepal says environment ‘not conducive’, says countries should ensure territory not used for terrorRegretting that the regional environment is “not conducive” to host the next SAARC Summit, current Chair of the grouping Nepal today said member states must ensure their territories are not used for cross-border terrorism. Days after India and four other countries pulled out of the 19th SAARC Summit indirectly blaming Pakistan for creating an atmosphere which was not right for successfully holding the event, Nepal said it strongly believes that “an environment of peace and stability is essential for a meaningful regional cooperation”. Read more…2) India has not attacked anyone, not hungry for land: PM ModiIndia has not attacked any country and neither is it hungry to grab anyone’s land, but its men have made the supreme sacrifice fighting for the national cause and others, Prime Minister Narendra Modi said on Sunday. His comments came in the backdrop of Pakistan’s constant clamour for highlighting the Kashmir issue at the international fora.”India has not attacked anyone. It is neither hungry for land. But in the two World Wars (in which India had no direct stake), 1.5 lakh Indian soldiers had laid down their lives,” the Prime Minister said at the inauguration ceremony of the Pravasi Bharatiya Kendra. Read more…3) Surgical strikes also carried out under Manmohan Singh, we never publicised it: CongressAsserting that the recent surgical strike by the Indian Army in Pakistan occupied Kashmir (PoK) was not the first mission ever, as several of its kind was undertaken during the UPA regime, the Congress on Sunday took a swing at Prime Minister Narendra Modi saying that his predecessor, Manmohan Singh never ‘publicised’ such operations. Speaking to ANI Congress leader Rajiv Shukla re-iterated former army chief, General Bikram Singh’s statement that such strikes have taken place before as well.’Such operations have been carried out before, even during the time of Manmohan Singh ji but he never publicised it and kept beating the drum about it. The Army kept doing its job and neutralising terrorists.’ Read more…4) Unfazed by Patna HC order, defiant Nitish issues new liquor law with harsher provisionsTwo days after the Patna High Court quashed its order on prohibition, Bihar government on Gandhi Jayanti on Sunday came out with a new law banning liquor with more harsh provisions like arrest of all adults in the event of recovery of the contraband in their house. The government notified the Bihar Prohibition and Excise Act, 2016 to ensure that the ban on sale and consumption of alcohol including Indian Made Foreign Liquor (IMFL) as well spiced and domestic liquor continued in the state.At a special Cabinet convened on Sunday, Chief Minister Nitish Kumar and other members of his Cabinet took a pledge that the government would continue with prohibition which is “ushering positive social change” in the state. Read more…5) Coast Guard apprehends Pakistani boat off Gujarat coastIndian Coast Guard ship Samudra Pavak apprehended a Pakistan boat this morning off the Gujarat Coast. The boat, along with its nine crew members, was escorted to Porbandar for a joint investigation. Read more…6) Brexit: Theresa May to trigger Article 50 for EU exit process by end of March 2017British Prime Minister Theresa May will trigger the divorce process from the European Union by the end of March, firing the starting gun on the country’s biggest shift in policy since World War Two.May, appointed prime minister shortly after Britain voted in June to leave the bloc, has been under pressure from EU officials, investors and members of her Conservative Party to offer more on her plan for Britain’s exit, beyond her catch phrase “Brexit means Brexit”. Read more…

Surgical strikes also carried out under Manmohan Singh, we never publicised it: Congress

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Asserting that the recent surgical strike by the Indian Army in Pakistan occupied Kashmir (PoK) was not the first mission ever, as several of its kind was undertaken during the UPA regime, the Congress on Sunday took a swing at Prime Minister Narendra Modi saying that his predecessor, Manmohan Singh never ‘publicised’ such operations. Speaking to ANI Congress leader Rajiv Shukla re-iterated former army chief, General Bikram Singh’s statement that such strikes have taken place before as well.’Such operations have been carried out before, even during the time of Manmohan Singh ji but he never publicised it and kept beating the drum about it. The Army kept doing its job and neutralising terrorists.Former Army chief, Gen Bikram Singh came on record earlier to say that such strikes by Indian soldiers have taken place in the past as well, including in the wake of the decapitation of two Indian soldiers in January 2013 when Manmohan Singh’s UPA was in power. Earlier, Congress Vice-President Rahul Gandhi on Friday praised Prime Minister Narendra Modi, a day after the Indian Army conducted surgical strikes across the Line of control (LoC).”I want to thank him (PM Modi) that for the first time in two and half years he has taken an action that is of the stature of PM,” said Rahul addressing a rally in Bulandshahar. “Modi has my full support; the Congress party and entire nation is standing by him,” he added.”All of us stand firmly united against terrorism and those who support and sponsor it. The Congress party and I salute the Indian Army and our jawans for acting valiantly to defend our country and our people,” Rahul had said on Thursday.Adding that India had also shared details of the surgical strikes with Pakistan Army and expected them to cooperate in the fight against terror, he said, “The motive of this operation was to hit out at the terrorists who were planning to infiltrate into our territory.”Pakistan has, however, denied the strikes took place, with PM Nawaz Sharif saying, “The notion of surgical strike linked to alleged terrorists bases is an illusion being deliberately generated by Indian to create false effects.”

Gandhi Jayanti: Pranab Mukherjee, Narendra Modi lead tributes

New Delhi: The nation on Sunday remembered Mahatma Gandhi on his 147th birth anniversary, with President Pranab Mukherjee, Prime Minister Narendra Modi and other leaders paying floral tributes to him at his memorial in New Delhi.

Vice President Hamid Ansari, former Prime Minister Manmohan Singh and senior BJP leader L K Advani also paid tributes to the Father of the Nation.

“Gandhiji made this world a better place. His ideals, dedication to the poor & struggle against injustice inspire,” the Prime Minister said in a tweet.

Clad in a white kurta and pyjama, Modi, who arrived at 7:40 am, paid homage to the Mahatma by offering rose petals at his memorial and performing a ‘parikrama’ (circumambulation) around it.

Union Ministers M Venkaiah Naidu and Rao Inderjit Singh, and Congress leader Ghulam Nabi Azad too joined in paying homage to the Father of the Nation.

Delhi Chief Minister Arvind Kejriwal, who arrived along with his deputy Manish Sisodia, also paid tributes to the Mahatma on his birth anniversary.

Ambassadors of several countries and other dignitaries attended the function. A large number of school children had also gathered at the venue to pay homage.

An all-faith prayer meeting was held on the occasion.

Lull after surgical strike, as govt, party refrain from chest-thumping

<!– /11440465/Dna_Article_Middle_300x250_BTF –>A day after the strikes across the Line of Control, it was business as usual at Raisina Hill. A calm-looking Prime Minister Narendra Modi made a 20-minute speech in which he narrated anecdotes and made suggestions on cleanliness, waste management and building toilets, but was silent on the surgical strikes carried out just a little over 24 hours earlier.The message—action needs no words—was palpable and had percolated to his council of ministers and the BJP.The leadership has conveyed to the ministers and the party that they should exercise restraint from making chest-thumping statements about the strikes. Finance minister Arun Jaitley and BJP president Amit Shah are understood to have asked the party leaders on Thursday evening to speak cautiously, at a time when the government wanted to avoid further escalating tension. There was concern about sleeper cells becoming active and possible retaliation, sources said.Besides, any extreme reaction from the government or party leaders could raise expectations of the people, sources said. The surgical strikes have completed Modi’s cycle of offensive strategy which began with isolating Pakistan at the global stage, moving to the economic steps by reviewing the Indus water treaty and then seeking to review the MFN status.Only the Army and its operational wing have been authorised to speak to media, according to sources, at the Cabinet Committee on Security (CCS) meeting on Thursday itself, DGMO Lt Gen Ranbir Singh, was asked to address the media and not any minister. Sources said, the PM has drawn up a strategy to be adopted, where the operations get the backing of all the people, irrespective of political affiliations.Modi did not want it to be confined to a party affair or raise tensions to a point that invited international attention. The Army and the ministers were told that it was a limited counter-terrorist operation and that an impression should not be created that India has launched a war. The Prime Minister, however, asked Home minister Rajnath Singh to speak to chief ministers of the border states and Jaitley to brief international fund managers to reassure them about India’s fiscal situation and tell them not to worry about FDI and investments in India. Foreign Secretary S Jaishankar will brief envoys of select countries. He was also told to brief foreign media stationed in Delhi.In an advisory, the home ministry has conveyed to the states that additional forces should be deployed in all sensitive places, strategic installations, markets, religious places and other key places to ensure security, the sources said keeping in mind the upcoming festive season.The BJP, which was basking in the government’s “befitting reply” to the Uri attack, on Friday refrained from flaunting the strikes. On the other hand, the Opposition came out in support of it.Modi had called up former Prime Ministers Manmohan Singh and Deve Gowda, while foreign minister Sushma Swaraj drove down to 10, Janpath, to brief Congress President Sonia Gandhi. She was greeted by Manmohan Singh, who had gone there to receive Swaraj. Sonia, who is recovering from illness after she collapsed during her road show in Varanasi on August 2, congratulated the External Affairs Minister and the government for sending a “strong message” to Islamabad that terror would not be tolerated.At a road show in Bulandshahr on Friday, Congress vice-president Rahul Gandhi said “I want to thank him that in the past two-and-a-half years, this is the first action which can be termed as worthy of prime minister.”

India and Pakistan sail into uncharted waters with neither peace nor war in sight

With the surgical strikes across the Line of Control (LoC), India has abandoned the doctrine of strategic restraint which had allowed Pakistan-based terror groups to hit India with impunity. With this, Prime Minister Narendra Modi has changed the India-Pakistan narrative.

Whether this will bring down the terror strikes launched from Pakistani soil or lead to a dangerous escalation between the two nuclear armed South Asian rivals is not clear.

This is the first time that Indian troops had crossed the LoC under the NDA government, something that was avoided during the Kargil incursions. The new narrative fashioned by the Prime Minister and the NSA is for every hit there will be a counter hit.

A file photo of PM Narendra Modi. PTI

A file photo of PM Narendra Modi. PTI

The Modi government has acted with maturity in handling the complex situation. The fact that DGMO Lt General Ranbir Singh had called up his counterpart to inform him and insist that India’s action along the LoC was not military action but “anti-terror” move is also worth noting. Unlike after the Myanmar operations, when there was much chest-thumping by many BJP leaders, including Minister of State for I&B Rajyavardhan Singh Rathore, this time around there was relatively less crowing.

The DGMO’s statement was to the point and brief. His statement mentioned action along the LoC, without letting out whether soldiers crossed the line. What the rest of the ministers said does not matter, but the official line kept the issue vague.

Government had no choice but to strike

For the BJP-led Modi government, there was no other choice. India’s patience was running low. In fact, since the 2008 Mumbai attacks, people’s anger at regular terror strikes from anti-India outfits nurtured by Pakistan have been growing. To be fair to Modi, despite his constant mocking of his UPA predecessor Manmohan Singh’s soft approach to terror, he too tried his best to befriend Pakistan. The invitation to Nawaz Sharif to attend his swearing-in, the detour from Kabul to call on Sharif on his birthday were all part of his effort for peace negotiations. But Pathankot and then Uri combined with Sharif’s eroding clout in Pakistan, made him realise the futility of his peace overtures. The death of 18 Indian soldiers in the Uri terror attack also led to the growing demand from Prime Minister’s own hardline followers for retaliatory action. The BJP has always believed in a strong government and failing to act against Pakistan would have indicated a measure of weakness that did not go down well with the PM’s strong man image.

The government had to act and to declare that it has done so openly. A covert operation was out of question because the people had to be told that Modi was not Manmohan Singh.

Calibrated pitch

Instead of a knee-jerk reaction following the Uri attack, the government took time and covered the loopholes. In the diplomatic front, India gave its version to the assembled world leaders at the United Nations General Assembly. External Affairs Minister Sushma Swaraj spoke with maturity, while young Eenam Gambhir’s reply to Sharif was succinct. India not only announced that Modi will not travel to Islamabad for the Saarc Summit, but also got Bangladesh, Bhutan and Afghanistan to pull out. Regional isolation of Pakistan was complete. Doing this at the international level will not be easy, because the US needs Pakistan to get a peace deal negotiated in Afghanistan with the Taliban.

The US was kept in the loop with US Security Advisor Susan Rice speaking to Ajit Doval after Wednesday’s strikes. By evening, Foreign Secretary S Jaishankar also briefed 25 envoys about India’s action. Ambassadors of the P-5 countries — US, Russia, France, UK and China — were all present.

Pakistan’s reaction

“Pakistan will not react immediately,” said former foreign Secretary Lalit Mansingh. “Sooner or later they will change the narrative,’’ he pointed out. The Pakistan army has not admitted to Indian attack at the seven launch pads along the LoC. They continue to maintain that it was cross-border firing in which two of their soldiers died and nine others injured. “Very soon, they will focus on unprovoked attack by India on Pakistan’s sovereignty. I think they will also take this before the UNSC.”

“India will be kept in tenterhooks through the festival season,” said Ambassador Mansingh.

Islamabad will also launch a counter-diplomatic offensive. They will brief China, the Organisation of Islamic Conference (OIC) members, which includes major Islamic powers like Turkey and Egypt.

There will be much talk by Pakistani experts of using tactical nuclear weapons if Indian soldiers cross the LoC but the government is now willing to take this in its stride. There will be fresh tension between India and Pakistan. China, which has invested $46 billion in Pakistan for its one belt-one road initiative will call for talks.

Anxieties about problems in Balochistan will propel China to work for peace between India and Pakistan.

India and Pakistan will be on edge for the next few months and there will be blasts of accusations and counter-accusations from both capitals. The truth is: We are on uncharted waters and will have to see if this results in ultimate peace or war.

Sushma Swaraj briefs Sonia Gandhi about surgical strikes across LoC

New Delhi: External Affairs Minister Sushma Swaraj on Wednesday met Congress president Sonia Gandhi to brief her about the surgical strikes carried out by the Army across LoC. Former Prime Minister Manmohan Singh also met Gandhi, who is recovering from illness, before Swaraj.

Representational image. Reuters

Representational image. Reuters

Gandhi was hospitalised after she fell ill during her roadshow in Varanasi on 2 August. In a statement, the Congress chief has said a “strong message” has been sent with the surgical strikes by Army against terror bases across the Line of Control (LoC) and insisted that Pakistan bears a “great responsibility” in the continuing cross-border attacks in India.

Union Minister Rajnath Singh chaired an all-party meet to brief the leaders of major political parties on the situation. India carried out ‘surgical strikes’ on terror launch pads across the Line of Control(LoC) in Jammu and Kashmir last night, inflicting “significant casualties” on terrorists and those who are trying to support them.

The announcement of the sudden action by the army was made on Thursday by DGMO Lt Gen Ranbir Singh, 11 days after the terror strike by Pakistan-based terror outfit JeM on an Indian army camp in Uri in Kashmir over which Prime Minister Narendra Modi said the attackers will not go “unpunished” and that the sacrifice of 18 jawans will not go in vain.

Congress hailed the surgical strikes declaring that it stood completely behind the armed forces.

Uri response: India must act now while US is willing to cut ‘unworthy ally’ Pakistan loose

New York: Gone is the exuberant American desire to be peacemaker. Washington now knows that it has been played by Islamabad, it’s false ally in the war on terror. With the US more willing to cut Pakistan loose, there is nothing stopping the Modi government from using hard power to dissuade Pakistan’s terror network from targeting India, experts say.

After the 2008 rampage in Mumbai in which Pakistan-based Lashkar-e-Taiba (LeT) killed 164 people, the Manmohan Singh government considered all options. It weighed in on an air strike to take out the Jamaat ul-Dawa (JuD) headquarters at Muridke, a small town 50 miles from the Indian border in Punjab which was the ideological hub for the Mumbai attackers. It also contemplated bombing terrorist training camps in Pakistan-occupied-Kashmir.

US Senator John McCain warned a group of Pakistanis over lunch in Lahore that Singh who was “visibly angry and reeling from the shock of the attacks” was seriously contemplating the use of force if Pakistan failed to act against the LeT. However, India finally succumbed to US pressure and inched back from military retaliation.

“Pakistan is of far lesser significance to the United States today than it was in 2008. The circumstances are markedly different consequently there is much less interest in coddling Pakistan,” said South Asia expert Sumit Ganguly, who holds the Rabindranath Tagore Chair in Indian Cultures and Civilisations at Indiana University in Bloomington.

File image of Indian soldiers rushing to the attack site in Uri on Sunday. PTI

File image of Indian soldiers rushing to the attack site in Uri on Sunday. PTI

Ever since 9/11, the United States has provided Pakistan with a steady supply of security and non-security assistance. US officials have justified generous transfers worth over $30 billion since 2002 on the grounds that they secure Pakistan’s ongoing cooperation in Afghanistan and bolster Pakistan’s ability to fight terrorism. However, Pakistan has played fast and loose, and nothing has convince the Pakistani government to end its long-standing support to terrorist groups.

In a sign of ongoing Washington’s frustration with Islamabad for not acting against militants fuelling violence in Afghanistan, the Pentagon on 3 August withheld $300 million in military assistance to Pakistan. Defence Secretary Ashton B Carter had decided against making a certification to Congress citing the continuing operations of the Afghan Taliban and Haqqani militants on Pakistani soil.

India, itself has a few military options that it could consider against Pakistan. India could attempt an artillery strike on Pakistani army positions which are used to help militants cross over into parts of Kashmir, military experts say. Second option on the table would be sending special forces inside Pakistan to attack guerrilla training camps.

“We have to learn the value of hard power – how to acquire it, how to use it, and how to stop browbeating ourselves into inaction,” wrote R Jagannathan in Swarajya.

“If the Pakistan-backed terrorist attack at Uri on 18 September, which killed 17 armymen, does not lead us towards long-term strategic action, we might as well resign ourselves to becoming the punching-bag for that terrorist state, with negative consequences for us in the long run.”

Sometimes powerful Indian politicians who can afford an army of private guards can be careless about taking a tough stand on terrorism. They nudge India carelessly down the “strategic restraint” path even when it has failed abysmally.

“It is appalling that since the 2001 terrorist attack on Parliament, India has not devised a strategy of striking back against Pakistan in the wake of terrorist attacks which emanate from Pakistani soil. It is mindboggling and shows the callousness of the Indian political class,” said Ganguly.

“They are not the usual victims of terror: It is the Indian paramilitary forces, security personnel, it is Indians who are unlucky enough to live near the border or who happen to take public transport. Politicians living in New Delhi with multiple layers of security don’t have to fret about the threat of terrorism from Pakistan. If it affected them you can be certain that steps would have been taken to plan a retaliatory strategy which would be commensurate with the periodic attacks from Pakistan.”

“What sort of great power are we if we are so terrified of escalation?” he added.

In terms of military strength, India was ranked fifth in the world after US, Russia, China and Japan, according to a 2015 report Credit Suisse based on data from Stockholm International Peace Research Institute and Global Firepower.

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