<!– /11440465/Dna_Article_Middle_300x250_BTF –> Opposition parties attacked Prime Minister Narendra Modi for “failing” to show “sensitivity” towards people’s pain due to demonetisation in his address to the nation, while BJP hailed him for announcing a string of welfare measures for the weaker sections.Slamming Modi for his “lacklustre” address, Congress called him a merchant of “false promises” and wondered why he did not mention how many “lakhs of crores” in black money and fake currencies the government managed to wipe out through demonetisation in the last 50 days.Congress Spokesperson Randeep Surjewala alleged the Prime Minister totally failed to show any sensitivity to people’s pain as no relief from financial restrictions was announced despite widespread expectation.The Left parties attacked him for “failing” to address problems of the poor and farmers caused by demonetisation and charged him with delivering a “budget speech” in view of forthcoming assembly polls in UP and some other states.”He spoke like a pracharak for most of the 45-minute speech…It was like a budget speech,” CPI(M) general secretary Sitaram Yechury said.BJP President Amit Shah, however, hailed Modi for welfare measures and called them “great step” towards opening the avenues for the weaker sections of the country.”The prime minister opened up avenues for poor, farmers and youth of this country after the record availability of money in the banks since Independence following the demonetisation. It is a great step for the weaker sections of the country,” he said.Surjewala said though crores of people were reeling under severe difficulties and a large number of them lost their jobs, Modi did not talk about any roadmap for them.”The Prime Minister’s so called cleansing drive took 125 lives of innocent Indians and put crores of people in severe difficulties. But Modi did not uttter a single word for those who died. This is reflection of his insensitivity to the peoples’ pain,” Surjewala said. Attacking Modi for not lifting restrictions on withdrawal of cash even after the 50-day period, the Congress spokesman said the PM only believes in “hitting headlines and giving no deadlines”. “The entire country was listening with curosity that the Prime Minister will lift the restrictions on withdrwal of their hard earned money from banks. But people will still have to reel under this economic anarchy.”The Prime Minister said it will take time to improve the banking system in the new year. It means he belives in hitting headlines and not giving deadlines,” he said.Yechury, who had asked a number of questions to the Prime Minister ahead of the latter’s address to the nation, rued Modi did not announce any compensation for daily wage earners, fishermen, agricultural workers “who were hit hard by demonetisation”.He also questioned why the Prime Minister did not announce debt waiver to farmers while Rs 1.12 crore taken in loans by corporates have been written off.”He (Modi) has talked about hardships of people standing in queues. But he said nothing on compensation to those 115 persons who died in queues while withdrawing money,” Yechury said.In a series of tweets, Shah said, “PM @narendramodi has given a futuristic & visionary address to the nation, sharing a series of welcome initiatives for poor & farmers.”PM @narendramodi wonderfully articulated the passion & enthusiasm with which 125 crore Indians supported the movement against corruption.”BJP leader and Urban Development Minister M Venkaiah Naidu also welcomed the announcements, tweeting, “I specially thank PM @narendramodi for reducing interest rate on housing.A big boost to housing sector & big boon to the poor &middle class,” he tweetedComing down hard on the PM, Surjewala said demonetisation has taken away the jobs, hit the farmers and traders and made life difficult for every section of the society but there was no word of relief for them in his address.”Who benefitted from the demonetisation. Only a handful of 50 people who are Modiji’s friend. This is why he said yesterday that the deposits of the people in the banks would be used for strengthening banking system and infrastructure.Noting that there was “nothing new” in PM’s announcements, he said Modi is selling what Congress was implementing whether the Rs 6,000 maternity benefit to pregnant poor women or interest subvention on houses for the poor.Stating that the decision of demonetisation has destroyed the back bone of poor and medial class, Surjewala said Modi should have announced 20 per cent bonus for farmers above MSP, compensation for those who lost job during this period among others.Rashtriya Janata Dal (RJD), the ruling alliance partner in Bihar, said the address proves that even Modi himself has accepted that demonetisation has “failed.” In a series of tweets, party chief Lalu Yadav posed a series of questions to the PM on the demonetisation, saying the people of the country would be standing in the queues from Monday again.”Where is the report card, why did not (Prime Minister Modi) disclose how much black money (has been) unearthed. How much (money) has been deposited, how many jobs lost, how much is the loss to the economy and how it would be compensated,” Lalu tweeted.In another tweet, he sought to know from the PM how much money was spent on printing of new notes.Taking a dig at Modi’s speech, which did not mention any timeline for the return of normalcy in the banking system, he said the PM, who had in his November speech asked the people to bear the pain for 50 days, “did not give any deadline.””Prime Minister publicly misleading the nation is not a good sign. Nobody will have faith in such a Prime Minister,” he tweeted.”The boring speech of today signals that the PM has accepted that demonetisation has failed. Had there been even a single achievement he would have gone to the town, tom-toming it,” he said.”The country will be in the queues again on the eve of the new year, such an expressionless, ineffective and crawling pre-budget speech,” he said.He claimed that the PM has no “remorse” even after taking away the lives of hundreds of people, and 25 lakh people’s jobs.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Sixty-six Indian fishermen have been arrested for alleged illegal fishing in Pakistani waters and a court here remanded them into custody on Saturday.The Indian fishermen along with five boats were arrested last evening for “illegally” fishing in Pakistan’s territorial waters and have been sent to jail by a judicial magistrate.The Maritime Security Agency had arrested the fishermen and seized five boats yesterday, a spokesman for the agency said.”The fishermen were arrested after they remained in Pakistani waters in the Arabian Sea despite warnings to move out of our territorial waters,” the spokesman said.Earlier on November 20, the Pakistani Maritime Security Agency had arrested 43 Indian fishermen for entering its territorial waters.Amin Marri, the station house officer of Docks police station, said the fishermen were booked under the Foreigner’s Act and the Fisheries Act and had now been sent to jail on court orders after being provided with clothing and food by a welfare organisation.Pakistan and India frequently arrest fishermen as there is no clear demarcation of the maritime border in the Arabian Sea and these fishermen do not have boats equipped with the technology to know their precise location.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>According to various media reports, Congress vice-president Rahul Gandhi has reportedly left the country to celebrate New Year in London. The Congress VP tweeted: “I will be traveling for the next few days. Happy New Year to everyone, wishing you and your loved ones success & happiness in this coming year.”Rahul Gandhi has been in the thick of the action in recent times, as he has criticised PM Modi for the demonetization move and also alleged that he had information of PM Modi’s personal corruption.Recently, Rahul Gandhi targeted Prime Minister Narendra Modi by posing five questions including the amount of black money recovered since November 8 and the number of jobs lost due to the dramatic decision. The Congress vice president took to Twitter asking the Prime Minister as to whom had he consulted before taking the decision and wondered as to why were “experts, economists and RBI not consulted”.His questions have come a day ahead of the Prime Minister’s address to the nation. Rahul sought to know as to who all deposited more than Rs 25 lakhs in bank accounts in six months preceding November 8 note ban decision.”With 50 days over since demonetisation, India is waiting for your answers to these five questions, Modiji. Amount of black money recovered after 8 November 2016? Economic loss to the nation and numbers of jobs lost? How many people died due to demonetisation? Has the compensation been paid? “Whom all did PM consult on demonetisation? Why were experts, economists, RBI not consulted? Who all deposited more than (Rs) 25 lakhs in bank accounts in six months preceding 8th November 2016?”
The most shocking aspect of the decision to demonetise the Rs 500 and Rs 1,000 currency notes by NDA government is the lack of transparency. The government and the RBI, the monetary authority, have not yet revealed the exact reason why the decision was taken or even about the current status of the economy and cash supply. There have even not been regular press releases or statements from the authorities through out the last 51 days.
The country’s central bank remained silent in the initial days of the demonetisation when the citizens had a harrowing time with cash crunch at banks and ATMs coupled with long queues that also led to even a few deaths of senior citizens. The role of the Reserve Bank of India and its new governor Urjit Patel has come for severe criticism.
Shailesh Gandhi, former Information Commissioner with the Central Information Commission (CIC), New Delhi, filed a complaint with the CIC over the RBI’s refusal to answer queries under Right to Information Act by a non-disclosure policy put up on its site on November 30. In a conversation with Firspost, Gandhi explains why the RBI is on the course to setting a dangerous precedent by its refusal to answer queries and setting up its list under its non-disclosure policy which goes against the exemptions laid under the RTI Act, passed by the Supreme Court.
Excerpts from the conversation:
Your take on RBI’s unwillingness to respond to RTI queries.
This is sheer arrogance on the part of the RBI. Almost everyone in power dislikes transparency for themselves, be it the courts, bureaucrats, the RBI and even the media for that matter. Arrogance weighs with everyone who will say that in theory the RTI is good but when asked to release information, will remark: I am not corrupt. I am honest and clean and why should any ordinary citizen question me. Even the honest dislike the RTI and are happy to tell others to be transparent. It takes time to get used to being questions. It is 11 years since the RTI Act came into force.
What the RBI is doing by refusing to answer queries under RTI is denying citizens their fundamental rights. There are ten exemptions under the RTI. These do not include what the RBI is stating as exemption for itself. The central bank has also not given any reason for its actual rejection to the questions posed to it under the RTI.
Our RTI Act is the best in the world and we now rank at number 4 in terms of provisions of law and at 66 with regard to implementation. The Act is grossly misrepresented. The courts also have not been very enthusiastic about it.
You have filed a case against RBI’s refusal with the CIC
Yes, I have filed a complaint with the CIC on 16 December that the RBI is arbitrarily claiming exemption and have spread the net very wide in the garb of following the law and are actually defying the law. I did that because the RBI could set a bad precedent which is dangerous that could lead other public authorities to follow it, which could lead to increase in the load on the CIC. Everyone will compile their own non-disclosure list like the RBI has done and the CIC will not be able to penalise them. I hope the Supreme Court and the CIC takes cognisance of it.
The RBI has in its Disclosure Policy on its site on 30 November said that the list of information which shall not be given is justified by the proclamation that: ‘While compiling the ( nondisclosure) list, it has been the Bank’s endeavour to attain the objectives of the RTI Act, without jeopardizing the financial stability and economic interests of the State.’ Effectively it means that RBI arrogates to itself the right to lay down exemptions to disclosure of information in line with the objectives of the Act. This is the sole prerogative of Parliament which has provided the exemptions to disclosure in Section 8 and 9 of the RTI Act. The RBI’s disclosure policy is actually a non-disclosure. They are the masters and the judges themselves.
What are the 10 areas that are exempted under the RTI Act?
1) To give information, disclosures which would affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the State, relation with foreign State or lead to incitement of an offence; 2) information which has been expressly forbidden to be published by any court of law or tribunal or the disclosure of which may constitute contempt of court; 3) information, the disclosure of which would cause a breach of privilege of Parliament or the State Legislature; 4) information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information; 5) information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information; 6) information received in confidence from foreign government; 7) information, the disclosure of which would endanger the life or physical safety of any person or identify the source of information or assistance given in confidence for law enforcement or security purposes; 8) information which would impede the process of investigation or apprehension or prosecution of offenders; 9) cabinet papers including records of deliberations of the Council of Ministers, Secretaries and other officers: Provided that the decisions of Council of Ministers, the reasons thereof, and the material on the basis of which the decisions were taken shall be made public after the decision has been taken, and the matter is complete, or over: Provided further that those matters which come under the exemptions specified in this section shall not be disclosed; 10) information which relates to personal information the disclosure of which has no relationship to any public activity or interest, or which would cause unwarranted invasion of the privacy of the individual unless the Central Public Information Officer or the State Public Information Officer or the appellate authority, as the case may be, is satisfied that the larger public interest justifies the disclosure of such information: Provided that the information, which cannot be denied to the Parliament or a State Legislature shall not be denied to any person.
When Supreme Court orders are not being adhered to by the RBI, can no action be taken on the institution?
When you defy SC orders, the CIC cannot do anything. The commission has the authority and power to say that the list you put up is too wide ranging and can’t be accepted. That’s all.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>In his first interview post demonetization, Prime Minister Narendra Modi reflected on the concerns raised in the weeks since his surprise announcement on November 8. In an exclusive interview with India Today, Modi said, “The revenue collected will be used for the welfare of the poor, downtrodden and marginalised.”The Prime Minister said that these sections of the society were central to the government’s programmes and priorities. He rejected allegations by the opposition that the move was political, in view of the upcoming state elections. “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 never have done so,” he said.Asserting the move to ban the high denomination had been welcomed by the 1.25 billion citizens of the country, the PM said that the public’s enthusiasm had not been affected by the dire predictions made by critics. “This acceptance, in my view, is even more historic than the decision itself,” he told the magazine.
ALSO READ Digi Dhan Mela: PM Modi launches BHIM app, now only thumb impression needed for secure digital transaction He also said that the absence of significant incident of unrest was not a small achievement. “At the same time, as with every other process, there is always room for improvement, and I believe that we can, and must, always improve,” he said.On the frequent changes in policy post the demonetization announcement, Modi 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’. We must stay two steps ahead of the enemy.” He also said that the changes in policy reflected the government’s ability to respond quickly and keeping up with the evolving situation.
ALSO READ Demonetization: PM Narendra Modi slams Congress for stalling debate, openly protecting dishonestyThe Prime Minister said that the return of the money to banks meant that there was a trail for every rupee and made it easier to track sources of black money and schemes of corruption. He also said that the GST and adoption of digital payments would be critical elements of system put in place the government to curb further generation of black money. The Prime called digitisation a major reform with multiple benefits, which include cleaning up of economy, proper accounting and sizing of the formal economy, greater ease and security, building of financial records and greater tax compliance.Addressing the common man’s anger against corruption, he said that it was also imperative to find ways to root out black money in politics. “Everyone, especially our political leaders and parties, will have to recognise and accept this groundswell. The tide is fast changing. Those who don’t evolve with it and insist on sticking to their old ways will only get swept away.You can read the full interview here.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>The deadline to deposit old Rs. 500 and 1,000 currency notes ends on Saturday. However, the people will still have time to exchange the currency notes at designated Reserve Bank of India (RBI) counters till March 31 after giving valid reasons for not depositing defunct notes in their accounts by December 30. From today, it will be illegal to have the banned notes and one could be fined heavily for carrying them according to a new law.One can deposit old notes only in select branches of RBI after today’s deadline. Furnishing wrong information while depositing the old currency between January 1 and March 31 will attract a fine of Rs 5,000 or five times the amount. Prime Minister Narendra Modi is likely to address the nation this evening, and according to reports, is expected to spell out the post-demonetization roadmap. This will be his second address to the nation since his announcement to scrap 1,000 and 500 rupees notes on November 8. While announcing the landmark decision, he had asked the people to give 50 days for demonetization and getting accustomed to a cashless economy. In a television address to the nation on November 8, Prime Minister Modi said, “The magnitude of cash in circulation is directly linked to the level of corruption. Inflation becomes worse through the deployment of cash earned in corrupt ways.” He said to break the grip of corruption and black money, the government has decided that from midnight Rs. 500 and Rs 1,000 currency notes will cease to be legal tender. Till date, the government has made several changes to the norms.After reports on crop sowing taking a hit due to no availability of cash, the government allowed the farmers to buy seeds with old Rs 500 currency notes. A November 17 announcement allowed the farmers to withdraw up to Rs. 25,000 per week from their KYC-compliant account.Following reports on abuse of Jan Dhan accounts, the Reserve Bank of India (RBI) capped the withdrawal limit to Rs 10,000 per month.On November 17, the government made more modifications to the existing rules. Families could now withdraw up to Rs. 2.5 lakh for weddings. The currency exchange limit was reduced from Rs 4,500 to Rs 2,000 per person.The traders in agricultural mandis were permitted to draw up to Rs 50,000 in cash per week to pay for sundry expenses like wages.Also, government employees up to Group C could draw Rs. 10,000 salary in advance in cash.The demonetization decision has also taken a toll on the common man, with reports of some dying while standing in queues to collect money. In between all this, Prime Minister Modi has continued to address the nation at various public gatherings and through his ‘Mann ki Baat’ radio programme.Making an emotional appeal at an event in Goa on November 13, Prime Minister Modi asked the “honest” people of the country to bear the hardships for another 50 days.Exactly two weeks later on November 27, the Prime Minister urged the farmers and small traders to go cashless at his monthly ‘Mann ki Baat’ address. “The common man will be trouble free if they are made aware of the digital financial transaction options,” he said asking the youth to lead the change.The opposition cornered the government during the Winter Session of Parliament over the inconvenience faced by the nation post-demonetization.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Former finance minister and Congress spokesperson P Chidambaram on Friday pegged the hit to the GDP at 1.5 per cent that is Rs 1.5 lakh crore as against former prime minister Manmohan Singh, who had pegged the loss to 2 per cent or more. He said the govt should not misread people’s patience as being happy with the demonetization, asking the Prime Minister to put an end to all restrictions on withdrawals of own money by the people and grant them back the economic freedom to withdraw as much money as they want in the new year.He said it is fair to expect that there shall be no queues outside bank branches and ATMs, that all ATMs will be open round the clock, fully stocked with currency notes, the bank will pay the money written on the cheque and not ask the drawer to draw another cheque of smaller amount.Dropping a hint that the whole demonetization exercise was PM Modi’s own brainwave, Chidambaram asked for making public the agenda note of the board of governors of the Reserve Bank of India (RBI) and the Cabinet note on the demonetization on November 8. He pointed out that RBI Governor Urjit Patel and only three non-official directors of the RBI Board met in Delhi at 5.30 pm on November 5 and took the decision to recommend demonetization of 85 per cent of the Indian currency in just 30 minutes. He wants to know how the governor and ‘three wise men’ reached such a momentous conclusion in so short a period and said that it should be made public what was discussed and if there were any dissents.Chidambaram said it would bring out the truth that everything was prescribed to both the RBI Board and the union ministers at the Cabinet meeting to have the command performance (as per the PM’s wish). He said he only hopes that there would not be another ‘surgical strike’ of this dimension on the people. Taunting at the BJP leaders describing the bank note withdrawal as a ‘surgical strike’, he said, “it should rather put all surgeons to shame.”
Jammu: One civilian was killed, as Pakistani Army indulged in heavy cross-border firing, targeting Indian positions and civilian areas along the Line of Control (LoC) in Jammu and Kashmir’s Poonch sector, prompting the Indian side to retaliate.
Representational image. PTI
“Pakistani troops targeted the Indian Army posts and civilian areas along the LoC in Poonch sector with small arms, automatic and mortars at 16:55 hours,” an army officer said. He said the army was retaliating strongly and effectively to the ceasefire violation.
One civilian has been killed in the ongoing firing, a senior police officer said.
On 16 December, Pakistan had violated ceasefire by targeting Indian positions along the LoC in Balakote sector of the same district. That had come after a lull of over three weeks, after the Indian troops had launched a counter-offensive on 23 November against the killing of three soldiers in the Machhil sector of north Kashmir’s Kupwara district.
In the cross-LoC attack by suspected Pakistani terrorists, three Indian soldiers were killed on 22 November, with body of one of them being mutilated. Following the incident, the Indian Army had vowed a heavy “retribution”.
The 2003 India-Pakistan ceasefire agreement has virtually become redundant with over 300 incidents of firing and shelling along the LoC and IB in Jammu and Kashmir by Pakistani troops.
Over 26 people, including 14 security personnel, have been killed in ceasefire violations since the surgical strike on terrorist launch pads in Pakistan-occupied Kashmir.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>One civilian was killed as Pakistani Army indulged in heavy cross border firing targeting Indian positions and civilian areas along the Line of Control (LoC) in Poonch sector of Jammu and Kashmir, prompting the Indian side to retaliate.”Pakistani troops targeted the Indian Army posts and civilian areas along the LoC in Poonch sector with small arms, automatic and mortars at 1655 hours,” an army officer said.He said the army was retaliating strongly and effectively to the ceasefire violation.One civilian has been killed in the ongoing firing, a senior police officer said.On December 16, Pakistan had violated ceasefire by targeting Indian positions along the LoC in Balakote sector of the same district.The ceasefire violation had come after a lull of over three weeks after the Indian troops had launched a counter- offensive against Pakistan on November 23 against the killing of three soldiers in the Machhil sector of north Kashmir’s Kupwara district.In the cross-LoC attack by suspected Pakistani terrorists, three Indian soldiers were killed on November 22, with body of one of them being mutilated. Following the incident, Indian Army had vowed a heavy “retribution”.The 2003 India-Pakistan ceasefire agreement has virtually become redundant with over 300 incidents of firing and shelling along the LoC and IB in Jammu and Kashmir by Pakistani troops.Over 26 people, including 14 security personnel, have been killed in ceasefire violations since the surgical strike on terrorist launch pads in Pakistan-occupied Kashmir.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Terming the demonetization decision as “historic,” Madhya Pradesh CM, Shivraj Singh Chouhan said Prime Minister, Narendra Modi with his “courageous” call broke the myth that powerful people can’t be harmed in the country.”India witnessed a historic decision on November 8, 2016. This day has given a meaningful reply to the queries raised by the people at large on the style of functioning of governments. “Often allegations are levelled against the governments that they can not take tough decisions under pressure. They fear to take decisions that could harm powerful people,” Chouhan said in his blog on the issue on Thursday evening.”Our PM has broken the myth with his courageous decision to demonetize Rs 500 and Rs 1000 currency notes,” he said. “The decision of demonetization is historic in a way that it surprised everyone and this is the distinct feature of it. India has seen decision of demonetization twice in the history of 100 years but those decisions gave ample time to the people having black money in the form of currency to change it.”Thus the main objective of the decision was partially met. This time, however the decision did not give any time to people with black money,” the Chief Minister said. Those criticising the decision say that it could have been taken with better planning and people should have been given ample time. It is beyond my comprehension as to whom these critics are referring to when they talk of giving time to people, he wrote in the blog.”Who are those about whom critics say time should have been given to them. It is obvious that they are favouring those who had black money in the form of currency,” Chouhan said. The decision of the Prime Minister to encourage cashless transaction is to transform the country from a developing nation to a developed one. All the aspects should be examined before criticising such a move, said Chouhan.
Union finance minister Arun Jaitley is a good communicator. Well articulate and sophisticated in his arguments to convincingly present a case to any audience. On Thursday, Jaitley demonstrated this ability yet again when he listed out the gains of demonetisation to the economy citing data to say why the critics of note ban are wrong. Following is the main points Jaitley made in his address yesterday.
In all the categories (of indirect tax) till 30 November, there has been a significant increase in tax collection. Till 19 December, direct tax mop-up rose 14.4 percent, indirect tax grew 26.2 per cent, central excise is up 43.3 percent percent and service tax by 25.7 percent, Jaitley said.
Secondly, life insurance and mutual fund sales, tourist arrivals and fuel consumption have gone up. The flow into mutual funds was increased by 11 percent. “Assessment can be unreal but revenue is real,” the FM said.
Finance Minister Arun Jaitley. PTI
Jaitley is missing the point here or is simply being selective in choosing his data to assess the impact of demonetisation over the last 50 days.
First of all, the above sets of numbers do not reflect the segment that has been hit badly by the demonetisation — the small traders/ service providers and those in informal economy.
Small traders with annual turnover less than Rs 1.5 crore and service sector with turnover of less than Rs 10 lakhs are not reflected in the indirect tax net. If one talks about impact on account of demonetisation, shouldn’t the segments that got hit most be factored in first?
Second, November typically shows a spike due to festive season. This will reflect in the indirect tax numbers too, including the excise duty. The full impact of the demonetisation will come with a lag.
Already there has been a slowdown in indirect tax collection in November, when the kitty swelled by 21.8 percent as against 34.6 percent in October. Similarly, growth in excise duty collection declined to 31.8 percent in November against 40.9 percent in October. Now , look at the monthly data on service tax. The growth in November slipped to 13.3 percent from 66.5 percent in October. (see the table below).
Third, the sudden spike in fuel consumption at a time when the overall economic activities are slow is dubious. Part of the reason could be that black money hoarders were smartly using the government-permitted window to dump the old notes in petrol pumps.
Fourth, FM Jaitley ignored the pessimistic GDP forecasts from various forecasters, including that from the Reserve Bank of India, which has lowered the full year forecast to 7.1 percent from 7.6 percent even while stating that it hasn’t fully taken into account the full impact of the demonetisation resulted cash crunch. Private forecasters are even more pessimistic.
Fifth, the spike in mutual funds and insurance premiums isn’t a good set of data while discussing the impact of demonetisation. According to the Insurance Regulatory and Development Authority of India’s (IRDA) 2015-16 annual report data, the life insurance penetration in India is 2.72 percent. Similarly, as a share of GDP, mutual fund penetration in India is still around 7 percent. The section of the population in the cash economy who are affected by the demonetisation has nothing to do with spike in life insurance premiums and mutual funds. Also shouldn’t the spike in insurance premiums also take into account the digital incentives rolled out by the government?
Sixth, Jaitley was also silent about the number of jobs lost in the informal sector post demonetisation. There is no official estimate for this. But, various estimates say about 4 lakh jobs could be lost due to the note ban.
According to the Centre for Monitoring Indian Economy (CMIE), unemployment rates rose to 6.1 percent in the week of 4 December and further to 6.6 percent in the week ended 11 December and then to 7 percent in the week ended 18 December. The impact comes with a lag and we need to wait for fresh numbers. The full impact of the demonetisation resulted cash crunch will only unfold in the next few months. If the cash crunch prolongs, things can get worse .
Seventh, Jaitley missed crucial indicators such as PMI data when assessing the economic situation. The consumption story has taken a hit. 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. The manufacturing PMI too fell with the index shrinking to 52.3 in November from October’s 22-month high of 54.4. These signals are hard to ignore. Here again, one need to wait for further data.
The bottomline is this: Full impact of demonetisation on economy will be visible only with a lag. May be next few months should offer more clarity. What FM Jaitley has done is presenting selective set of data and use that to prove demonetisation critics wrong and, finally, conclude that demonetisation has helped the economy in 50-days. This is too early an assessment and an incorrect presentation.
“Maine sirf pachaas din maange hain… 30 December tak mujhe mauka dijiye… Agar 30 December ke baad, koi meri kami rehjaye, koi meri galti nikal jaye, koi mera galat irada nikal jaye, aap jis chaurahe mein mujhe khada karenge, main khada hokarke desh jo saza karega, wo saza bhugatne ke liye taiyyar hoon (I have only asked for 50 days. Give me time till 30 December. After that, if any fault is found in my intentions or my actions, I am willing to suffer any punishment given by the country).“
“Black money has all been forced out into the open, whomsoever it may belong to — whether it is corrupt politicians, bureaucrats, businessmen or professionals.”
Modi wants us to believe that he has delivered what he promised in the 50 days, and that his “safai abhiyan” (clean-up campaign) will go on.
I have no problem in confessing that I am not an economist. But I am aghast at the way some, like Modi himself, have concluded that this demonetisation is a huge, rip-roaring success that will rewrite the economics textbooks. On one hand, we have those who are singing paeans to Modi in praise of his “bold” war against black money. On the other hand, there are others who, at the very first sight of a long queue before an ATM, rubbished the whole thing as the stupidest thing any prime minister had ever undertaken on the planet since the invention of currency.
Most of those who resorted to the premature song-and-dance were obviously the so-called bhakts of Modi.
And most of those who wrote a political obituary for the prime minister hardly a day or two after 8 November were bhakts of another kind: Left-leaning or Congress-supporting Modi baiters. It is likely that, if Modi hadn’t gone for demonetisation, they might have questioned why he hadn’t, to make good on his poll promise of ferreting out black money. If, after demonetisation, the ATMs functioned smoothly with a copious flow of the new Rs 2,000 and Rs 500 notes, they would have asked why there weren’t enough Rs 100 notes.
If Modi sneezed, they would ask why he wasn’t coughing. If Modi coughed, they would wonder why he wasn’t having hiccups. They are that sort of people. They must be disappointed that the ‘cash riots’ that they were hoping for, haven’t broken out on India’s streets.
On Friday, the two sides will once again deliver their predictable judgments, ignoring the fact that it is the last day for swapping old Rs 500 and Rs 1,000 notes for the new Rs 500 and Rs 2,000 currency. With all its good and bad effects, the demonetisation churn will continue for some more time, and perhaps it will be several months or even a year before we can arrive at a considered judgment as to whether it did any good, and whether whatever good it did, was worth the terrible things that it has so far inflicted on the people and economy of India.
File iamge of Prime Minister Narendra Modi. PTI
So far, we have seen only the bad effects of it. Dozens have died in queues, and millions have lost jobs. Lack of cash led to a sharp fall in spending, which in turn led to a crash in business in virtually every sector. Fathers couldn’t get daughters married the way they wanted. In some places, farmers dumped their produce on the roadside because it was not worth selling at the rock-bottom prices.
In other places, farmers had no money to buy seeds to grow fresh crops. Not a day passed after demonetisation without a moving tale of woe being reported from one part of the country or another. The picture of a former jawan weeping in a bank that went viral summed up best the agony India went through.
All these problems of demonetisation were a direct result of the woefully slow process of remonetisation. The humongous goof-up in ensuring availability of enough cash after the scrapping of 86 percent of the currency (in value) in a country where 87 percent of the transactions are said to be in cash, is all too clear. Enough has already been said about it by friends and foes of Modi, and those who are neither.
Questions that Modi must answer now
The question upfront now is: What is the country getting in return for all that misery that India was made to go through?
It’s now reasonably clear from official data that the cash windfall that the government had expected from demonetisation — black money that hasn’t been swapped or deposited in the banks which would drop into the government’s kitty — will hover around Rs one lakh crore.
Of the total of Rs 15.4 lakh of cash in the old Rs 500 and Rs 1,000 notes that were demonetised, Rs five lakh crore was estimated to be black. So if only some Rs one lakh remains unclaimed, what happened to the rest of the Rs four lakh crore? How much of it has been burnt by its holders? How much of it has been turned into white by illegitimate means? How much of it has been seized in income tax raids? And how much has been declared under the voluntary disclosure schemes?
These are questions that are not difficult to answer. So Modi must answer them.
This is not to suggest that the absence of a huge cash “windfall” in terms of “extinguished money” means that the demonetisation is a total, miserable failure. Despite claims by Modi baiters, the effect of scrapping the high-value notes on counterfeiters, terrorists, Maoists and drug-traffickers cannot be underestimated, at least in the short term. But the questions that will take more time to answer are the ones related to the expansion of the tax net, additional resources that will be available to the government for job-creating schemes and the effect on GDP — key aspects that will determine the ultimate success or failure of Modi’s adventure. It will be a while before we can judge these after-effects.
Although you can depend on the Union Budget that will be presented on 1 February to throw up some real and artificial clues, Modi must answer all the questions that he can right now — without delay, and without hysterics and histrionics.
Prime Minister Narendra Modi called demonetisation a ‘Mahayagna’ in his speech on the evening of 8 November when he scrapped Rs 500, Rs 1,000 currency notes asking citizens to ‘stand up and participate’ in the exercise to make it a grand success.
The note ban was initially sold as a war on black money, fake currency and terror funding and later as a project to create a cashless economy. Everyone, including Modi’s political rivals, lauded his intention behind note ban — cleansing the economy from illegal cash and fake currency and make each rupee floating in the banking system accountable to tax scrutiny — but in the same breath criticised the way the government and Reserve Bank of India (RBI) handled the implementation.
PM Modi asked for 50 days to end the common man’s pain. Post 50-days, let’s take a look at what has happened since the demonetisation announcement.
Prime minister Narendra Modi. PTI file photo
To begin with, there were a series of flip-flops in rules that could have been avoided had there been a proper plan. More than 60 circulars were issued in just one month confusing both bankers and customers. Promises made by both the PM and RBI were broken adding to confusions.
Promises broken
Look at these statements: In his speech, Modi said “you will have 50 days to deposit your notes and there is no need for panic. Your money will remain yours. You need have no worry on this point. After depositing your money in your account, you can draw it when you need it. Keeping in mind the supply of new notes, in the first few days, there will be a limit of ten thousand rupees per day and twenty thousand rupees per week. This limit will be increased in the coming days.”
True, money in their bank accounts belonged to the citizens but Modi’s promise that people can withdraw as per their need wasn’t fulfilled since banks struggled to fill their ATMs and branches to meet the increasing customer demand. This was on account of three reasons: 1) the government mints couldn’t churn out enough new notes to meet the demand; it was beyond their capacity even after working in three shifts; 2) the fresh lot of new currencies that arrived were mostly Rs 2,000 notes; there were not enough change to go around; 3) people who managed to draw money started hoarding it as curbs on cash withdrawals created panic.
On Thursday, Finance Minister Arun Jaitley refused to acknowledge even a single case of ‘unrest’ during the 50 days of demonetisation.
But, what about the ruckus at the banks and ATMs causing inconvenience to the public reported from across the country linked to demonetisation? Surely, all of it can’t be fake.
During his parivartan rally in Moradabad, UP, Modi asked Jan Dhan account holders not to withdraw the black money deposited in their accounts and promised that he will find a way for them to keep that money. This wasn’t in good taste because he was effectively offering a reward to the benami account holders for abetting a wrongdoing.
In his 8 November speech, Modi assured the citizens that they don’t need to panic and can exchange their old currency till 30 December. “From 10th November till 24th November the limit for such exchange will be 4,000 rupees. From 25th November till 30th December, the limit will be increased.”
But, the government, in fact, chose to advance the deadline much before the promised date. Lastly, there was a 19 December circular from RBI restricting deposits above Rs 5,000 only once, which was later withdrawn. Here again, a promise made initially was broken.
Lack of preparedness, transparency
The point here is both the government and the RBI were not prepared to face the rush for cash as evident from the frequent change in rules in the days following the demonetisation announcement. Even though the RBI promised a weekly withdrawal limits of Rs 24,000 (hiked from the initial Rs 20,000) and Rs 2,500 from recalibrated ATMs (from Rs 2000 initially), banks were unable to give even this amount to customers, often leading to altercations between staff and customers.
After 50 days, the cash situation has improved for sure, but only mildly. The situation has indeed turned better in metros, where ATM queues are now shorter. But, in rural areas the situation hasn’t improved much. As this Indian Express ground report states: since most farmers maintained accounts in cooperative banks, they continue to be in a spot. The informal economy, which offers employment to millions of workers, has been shattered. It will take a long time before small entrepreneurs recover from the shock. The cooperative banking sector, which plays a prominent role in rural India, is struggling to survive.
The RBI’s reluctance to communicate effectively and lack of transparency in updating information in public domain, added to confusion. An end to the cash-crunch isn’t in sight yet. Till 19 December, the RBI has infused Rs 5.92 lakh crore in the banking system as against the Rs 15.44 lakh crore demonetised. Given the physical constraints of four mints run by the RBI and government, it is unlikely that cash situation will return to normal before March 2017, according to bankers. This means, the cash curbs will stay longer.
Economy impact
Demonetisation is sure to have short-term impact on the economy which is predominantly dependendent on cash transactions the signs of which are already visible. The RBI has lowered the GDP forecast for the year to 7.1 percent, so have most private forecasters. The consumption story has taken a hit. 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.
Similarly, the manufacturing PMI too has fallen with the index shrinking to 52.3 in November from October’s 22-month high of 54.4. data from the Centre for Monitoring Indian Economy (CMIE), unemployment rates fell to less than 5 percent in the week of 27 November, but has since risen to 6.1 percent in the week of 4 December to 6.6 percent in the week ended 11 December and then to 7 percent in the week ended 18 December. The impact comes with a lag and we need to wait for fresh numbers. The full impact of the demonetisation resulted cash crunch will only unfold in the next few months. If the cash crunch prolongs, things can get worse.
RBI fighting a trust deficit
Another highlight of the 50-day period was the fall of the RBI, which faced criticism for giving up its autonomy and credibility. The RBI appeared clueless how to take the demonetisation process ahead from the beginning and faced criticism from former central bankers including Usha Thorat and K C Chakrabarty. According to a Bloombergreport, the RBI board approved demonetisation less than three hours before Modi announced the decision in a televised address to the nation.
Information on how many members favored or opposed the move isn’t “on record,” the RBI said in response to queries from Bloomberg News under the Right to Information Act, the report said.
The report also cited Power Minister Piyush Goyal’s comment to lawmakers on 16 November that it was RBI’s 10-member board that came up with the idea of note ban. Was the RBI forced to approve the idea of demonetisation is something only time will tell.
Demonetisation gains
Will demonetisation deliver its originally stated long-term gains of demonetisation — winning black money, killing fake currency and terror? Long-term gains are hard to predict at this stage. The tangible gains of demonetisation will dependent up on how much illegal cash is unearthed at the end of this exercise. Demonetisation as a trigger for Indians to shift to a digital world of finance is a far-stretched idea since such a change can’t happen overnight and should be gradual. As of now, only pains are visible.
True, in the long term demonetisation may prove to be beneficial when more people come in the tax net. This coupled with the Goods and Services Tax (GST) rollout can reboot the economy. But, that point is still away. Adjusting to the loss to the economy and the pain suffered by common man that isn’t quantifiable, what will be the net gain to economy from demonetisation is a question PM Modi will have to answer with support of evidence when he once again face the electorate in 2019.
New Delhi: The 50-day deadline to deposit the old Rs 500/1,000 notes in banks comes to an end today but the cash crunch and queues before ATMs are likely to continue for some more time as currency printing presses have failed to meet the huge demand for new bills.
People, however, will still have time to exchange the currency notes at designated RBI counters till March 31 after giving valid reasons for not depositing defunct notes in their accounts by December 30.
The government is also planning to come out with an Ordinance making possession of old Rs 500/1,000 notes beyond a specified limit for numismatic purposes illegal and punishable.
PTI
Prime Minister Narendra Modi in a surprise announcement on 8 November declared the old Rs 500 and 1,000 notes invalid.
The banks started accepting deposits in scrapped notes from November 10. However, very few ATMs opened on 11 November, as most of the machines had to be recalibrated for people to get cash which was available in Rs 2,000 denomination.
Saddled with cash crunch, banks resorted to rationing of valid currency notes and fixed a withdrawal limit of Rs 24,000 per account in a week. Although the overall situation at banks has improved, ATMs still have to do some catching up. Many cash vending machines are still out of cash even after 50 days since demonetisation.
The government move was sharply criticised by the Opposition parties led by Congress and TMC.
With every passing day, the number of circulars from the government or the Reserve Bank kept on rising that led to confusion among bankers as well as the public. Bankers believe that restrictions on withdrawal of cash from banks and ATMs are likely to continue beyond December 30.
After the demonetisation, the government had fixed a limit of Rs 24,000 per week on withdrawal from bank accounts and Rs 2,500 per day from ATMs in view of the currency crunch. The government and the RBI has not specified when the restrictions will be withdrawn. Finance Secretary Ashok Lavasa had said the withdrawal cap would be reviewed after December 30.
For a nation that loves cricket, the demonetisation drive launched by Prime Minister Narendra Modi on November 8 to pull out 86% of the cash floating in India’s economy has been like a one-day match, with roughly 50 days to the core deadline set by the government to swap bad cash with good resembling the number of overs in a game full of twists and turns.
As Modi gets ready to address the nation on December 31 in a stock-taking speech, sober watchers of the game may find no nail-biting finish or clear winner. We might need to use something resembling the Duckworth-Lewis method that cricket scorers use when rains or disruptions mar a match.
PTI file photo
We can expect the prime minister to announce on Saturday some populist handouts that would make the headlines on the New Year Day as he declares partial victory in a long-term war on black money that he will vow to carry on. But the real ammunition may be held back until the February 1 budget.
What is clear is that there is no fairy tale El Dorado of a huge pile of unambiguously wasted black cash as it was being made out soon after the government pulled the plug on old 500 and 1,000-rupee notes. There was talk of a fiscal bonanza for the government through a windfall dividend from the Reserve Bank of India then. The RBI has since virtually ruled out such a possibility.
Of the Rs 15.4 lakh crore worth of scrapped currency, some Rs 14 lakh crore has been deposited in banks or exchanged already. Some more money may trickle in through the ambiguous Pradhan Mantri Garib Kalyan Deposit Scheme window over the next three months or in last minute deposits on Friday. Clearly, there is no winning shot in this match in sight.
What we can expect next is a patient round of bean-counting in the Finance Ministry as taxmen zero in on high-value cash deposits. Some 60 lakh depositors have put in deposits totalling Rs 7 lakh crore since November 8 in instances exceeding Rs 2 lakh each. But toothcombing these and actually calling the bluff on tax evaders may take months or years and in cases involving big fish, involve appeals to income tax tribunals or even high courts.
However, we can reasonably expect Finance Minister Arun Jaitley to announce a very comfortable fiscal deficit situation for the 2017/18 financial year when he rises to present the budget on February 1. This would be largely though anticipated income tax gains from the deposits made in banks. The minister is already setting the mood by pointing to robust growth in tax collections..
A low deficit will give the government enough elbow room to play shots – be it in the form of lower taxes for citizens, populist schemes, recapitalising banks scarred by bad loans or fresh spending on infrastructure.
A Robin Hood-like transfer of a big chunk of fiscal gains to the poor holders of Jan Dhan Yojana may be the most romantic outcome of the demonetisation drive.
This, in fact, may become a political necessity because the government has been bitten badly on two fronts. A fall in the current year’s GDP growth resulting from the demonetisation is an economic scar, while stories of millions of industrial workers and farm hands suffering due to the cash squeeze resulting from demonetisation spell political wounds ahead of state elections in UP and Punjab.
To this we may add the image damage caused by a slew of ad-hoc measures linked to the drive – the latest of which is a Quixotic ordinance to fine those who may be caught with more than 10 outlawed notes. The international media has hit Modi where it hurts.
The government also faces a 5-judge bench of the Supreme Court on the Constitutional validity of the demonetisation. In the judiciary and in election rallies, the after-effects of demonetisation may drag on – long after the queues in front of ATMs vanish. That would make it seem like a drawn test match, not a one-day sizzler.
(The writer is a senior journalist. He tweets as @madversity)
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Maharashtra government will implement the Supreme Court’s verdict of December 15 that directed all the states to shut down all liquor shops and vends on national and state highways.State Finance Minister Sudhir Mungantiwar cited the rising number of deaths in road accidents in the state while stating that the liquor shops on state and national highways will be closed. “Maximum number of deaths due to road accidents were due to drunken driving. The SC verdict effectively means that 12,967 liquor shops in the state that fall within the 500 meter radius will have to shut down after March 31, 2017,” he said.Asked about the contention of the liquor lobby about revenue loss, Mungantiwar said, “anyway they are not in the business of selling holy water.”The minister also said that the Maharashtra government was prepared to incur the loss in its revenue and will implement the order of the apex court. “Out of the total 16,856 deaths in 2015-16, 13,212 deaths were road accident deaths and again out of that maximum of them were due to drunken driving,” Mungantiwar claimed.Meanwhile, officials said due to demonetization, the department anticipates a 4.88% decline in revenue between December 1 to 20.As per State Excise departments data, the department had fixed the revenue income out of liquor for 2016 at Rs 15,343.96 crore.The department had posted a revenue income of Rs 1,024.57 crore in November 2015, whereas the revenue income in November this year was Rs 1,027.35 crore, a rise of 0.27 per cent, shows the data. As per the data, between December 1 to December 20, 2015, the department posted a revenue income of Rs 670.25 crore, while the revenue for the same corresponding period this December stands at Rs 637.57 crore, a deficit of 4.88 per cent.Out of the total 12,967 liquor shops that will face closure after March 31, 2017, Pune district has maximum of 3,932 establishments, officials said. Of these 2,499 are in Nagpur, 2,225 in Kolhapur, , 2,224 in Aurangabad, 1,480 in Konkan region and 1,347 in Nashik district, they said.There are a total of 24,572 country liquor, wine shops, permit rooms, clubs, beer shops, beer and wine serving outlets in the state, said officials.According to them, the government has also directed its Superintendents of State Excise not to approve One Day temporary licenses (FL-4) to clubs that come within the radius of 500 meters from the boundaries of national, state highways and service roads.
Mumbai: Maharashtra government will implement the Supreme Court’s verdict of 15 December that directed all the states to shut down all liquor shops and vends on national and state highways.
State Finance Minister Sudhir Mungantiwar cited the rising number of deaths in road accidents in the state while stating that the liquor shops on state and national highways will be closed.
“Maximum number of deaths due to road accidents were due to drunken driving. The SC verdict effectively means that 12,967 liquor shops in the state that fall within the 500 meter radius will have to shut down after March 31, 2017,” he told reporters in Mumbai.
Representational image. AFP
Asked about the contention of the liquor lobby about revenue loss, Mungantiwar said, “anyway they are not in the business of selling holy water.”
The minister also said that the Maharashtra government was prepared to incur the loss in its revenue and will implement the order of the apex court.
“Out of the total 16,856 deaths in 2015-16, 13,212 deaths were road accident deaths and again out of that maximum of them were due to drunken driving,” Mungantiwar claimed. Meanwhile, officials said due to demonetisation, the department anticipates a 4.88 per cent decline in revenue between 1to 20 December.
As per State Excise departments data, the department had fixed the revenue income out of liquor for 2016 at Rs 15,343.96 crore.
The department had posted a revenue income of Rs 1,024.57 crore in November 2015, whereas the revenue income in November this year was Rs 1,027.35 crore, a rise of 0.27 per cent, shows the data.
As per the data, between 1 December to 20 December, 2015, the department posted a revenue income of Rs 670.25 crore, while the revenue for the same corresponding period this December stands at Rs 637.57 crore, a deficit of 4.88 percent.
Out of the total 12,967 liquor shops that will face closure after March 31, 2017, Pune district has maximum of 3,932 establishments, officials said. Of these 2,499 are in Nagpur, 2,225 in Kolhapur, , 2,224 in Aurangabad, 1,480 in Konkan region and 1,347 in Nashik district, they said.
There are a total of 24,572 country liquor, wine shops, permit rooms, clubs, beer shops, beer and wine serving outlets in the state, said officials.
According to them, the government has also directed its Superintendents of State Excise not to approve One Day temporary licenses (FL-4) to clubs that come within the radius of 500 meters from the boundaries of national, state highways and service roads.
New Delhi: Government has made holding of more than 10 junked Rs 500/1000 notes a penal offence punishable with a minimum Rs 10,000 fine, but the harsher four-year jail term has been dropped.
The Specified Bank Notes Cessation of Liabilities Ordinance, approved yesterday by the Cabinet headed by Prime Minister Narendra Modi, allows individuals to hold no more than 10 notes of the old currency. It allows 25 such currencies to be held by research scholars.
Reuters
Top sources said the ordinance, which will be sent to the President for his assent shortly, will come into effect from December 31.
It provides for making holding of old 1,000 and 500 rupee notes after March 31 a criminal offence that will attract a fine of Rs 10,000 or five times the cash held, whichever is higher.
Furnishing wrong information while depositing the old currency between January 1 and March 31 — a window provided only for exigencies — will attract a fine of Rs 5,000 or five times the amount, whichever is higher.
The ordinance also provides for amending the Reserve Bank of India (RBI) Act to provide legislative support for extinguishing the demonetised banknotes that are not returned. The 50-day window for depositing the old notes in bank accounts and post offices expires tomorrow.
While the high-denomination currency ceased to be a legal tender from midnight of November 8, 2016, a mere notification was not thought to be enough to end the central bank’s liability and avoid future litigations.
Currency notes carry RBI’s promise to pay the bearer the amount of the value of the note, a pledge that can be nullified only by legislation after giving due opportunity to everyone to return old notes.
Sources said the proposal for a four-year jail term for anyone possessing large number of demonetised currency after March 31, 2017 was not approved.
The ordinance, which will have to be converted into proper legislation by passing of a law in Parliament within six months, makes possession, transfer or receiving an amount of over Rs 10,000 in the now-demonetised 500 and 1,000-rupee notes a punishable offence.
Sources said while the deadline for the deposit of old currency in bank or post office accounts expires on Friday, time till March 31 is available for doing so at select RBI counters with stiff conditions. This facility is for people who were abroad, armed forces personnel posted in remote areas or others who can give valid reasons for not being able to deposit the cancelled notes at banks till December 30.
While announcing the demonetisation of the old currency on November 8, the government had allowed holders to either exchange them or deposit in bank and post office accounts.
In 1978, a similar Ordinance was issued to end the government’s liability after Rs 1,000, Rs 5,000 and Rs 10,000 notes were demonetised by the Morarji Desai-led government.
Sources said the legal amendments are needed every time the government decides to scrap any legal tender to put an end to its promissory note.
Of the Rs 15.4 lakh crore worth of currency that was scrapped, about Rs 14 lakh crore has been deposited in banks or exchanged.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Love and desperation drove Mumbai engineer Hamid Ansari to illegally cross over to Pakistan from Afghanistan in late 2012 leading to his arrest and subsequent imprisonment.Four years later, the desperation to hear a word from their son has prompted Hamid’s parents — Fauzia Ansari and Nehal Ansari — to pitch a tent in the city’s protest hotspot, Jantar Mantar, and knock on the Prime Minister’s door.”The last time I spoke to him was on November 10, 2012 when he told me that he will be back in Mumbai by November 12 and was looking forward to take up a teaching assignment,” Fauzia said.Little did she know that, “egged on by a group of people in Pakistan who may have trapped him”, Hamid’s false bravado would plunge the family in a state of despair, with virtually no glimmer of hope.During this period, Fauzia has written to Pakistani Prime Minister Nawaz Sharif, met Union External Affairs Minister Sushma Swaraj five times, so much so that “she recognises me even from a distance”.”Allow Hamid to talk to us from prison. We have not spoken to him for over four years now. Please allow him consular access denied to him till date,” reads her letter to Sharif.”Sushmaji has been extremely cooperative. Our last meeting was in August this year. She assured us that the government was pursuing the case,” Fauzia said, adding that the family would submit a memorandum to the PMO.Hamid, 31, had entered Pakistan to reportedly meet a girl he had befriended online, who was being “forcibly married” off to someone by her family, said Fauzia, a lecturer with a Mumbai college.It was only in January this year that Fauzia and Nehal came to know from Pakistan government’s submission in the Peshawar High Court, responding to Habeas Corpus petition, that Hamid was in military custody.He was arrested soon after he entered Pakistan and was tried by a Pakistani military court, which awarded him three years of imprisonment.”Since he has been in jail since 2012, he has served this sentence already. But there is no clarity about when he will be released. What is intriguing is that a woman Zeenat Shehzadi, who tried to help Hamid, seems to have been targeted by agencies there. She has gone missing,” Fauzia said.
New Delhi: Union Finance Minister Arun Jaitley on Thursday said that the impact of demonetisation is clearly visible with tax collection figures seeing double-digit growth.
Finance Minister Arun Jaitley. PTI
“The impact of demonetisation on tax revenue and collection is already visible. There has been a 26.2 percent increase in central indirect tax collection till November 30,” he said at a press conference here, adding till 19 December, direct tax collection increase has been to the extent of 14.4 percent against a growth rate of only 8.3 percent previous year.
Till 19 December, the net increase in direct taxes has been 13.6 percent after factoring in the refunds, he said.
“In the central indirect taxes there is an increase of 26.2 percent till 30 November. Excise duty is up by 43.5 percent, service tax by 25.7 percent and custom duties up by 5.6 percent,” Jaitley said.
“Notwithstanding the critics, it is a very significant increase in all indirect taxes till November 30,” he added.
Life insurance, tourism, petroleum consumption, flow of mutual fund investment have all increased during this period, the Finance Minister said.
Jaitley said demonetisation has brought a large part of money into the formal banking system which has increased the ability of the banks to lend.
On the liquidity situation in the markets, he said that a major part of the demonetised currency has been replaced with new notes and circulation of Rs 500 has increased.
Security breaches in and around Indian Army camps, over the past year, have cost us the lives of many soldiers. From Uri to Pathankot and from Samba to Nagrota, militants have brazenly attacked the security forces at the heart of some strategic security bases on the Indian territory. However, security loopholes seem to have taken a toll on the preparedness of our forces.
Now it appears that the recent attack on an army unit, which is located just three km from the Army XVI Corps headquarters in Nagrota was staged on similar lines of the Pathankot attack on the Indian Air Force base, where the failure to secure the camp’s perimeter resulted in the massive security breach.
Security personnel at guard in Jammu’s Nagrota district. PTI
Seven army personnel, including two Major-ranked officers were killed in the 29 November Nagrota attack, in which three heavily armed militants stormed into the army complex and started indiscriminate shooting within the officers mess and residential quarters of the army men.
The militants behind the attack reportedly sneaked into the premises from the forest area in its rear, official sources told PTI.
In fact a report by The Indian Expresssaidthat the militants climbed atop a tree in the officers’ mess campus alongside the three-metre high perimeter wall to enter the premises.
Even in the case of Pathankot attack, it was revealed that the terrorists had managed to jump into the campus by climbing eucalyptus trees and then using a nylon rope to slide down the perimeter wall, according to The Hindu. Despite this, no thorough fortification of the boundary walls of strategic camps was conducted, The Indian Express report states.
Moreover, just like the Pathankot attack, in Nagrota too, failure to ensure preemptive action despite credible intelligence input is also among the many reasons that compromised security.
According to another report in The Indian Express, intelligence agencies had been targeting the movements of suspected Lashkar-e-Toiba militants in the Indian territory, since at least two weeks ahead of the Nagrota attack. Specific intelligence inputs, warning against an imminent strike on a high-value military target was issued just 10 days before the 29 November attack. Although, the LeT cell tracked by the intelligence agencies was not behind the attack, which was later blamed on Jaish-e-Mohammed, questions were raised as to what security measures were taken in response to the intelligence warnings.
However, responding to this, an army spokesperson told The Indian Express, “The reports generated by intelligence agencies were not specific and covered a large spectrum of targets and locations. Even with reference to intelligence regarding Nagrota attack, no such specific or actionable intelligence was received.” However, the report further claims that RAW further issued a warning just 72 hours ahead of the attack that suspected Jaish militants were active in the region. The warning, undoubtedly were generic and did not point out the specific targets on the radar of the militants, nonetheless, the inputs should have led bases to enhance security in the least.
Currently, the National Investigating Agency is probing the attacks, while it has already filed a chargesheet against JeM cadres including its chief Masood Azhar in the Pathankot attack case, the agency is seeking to establish how did the terrorists creep into the Indian soil and sustained without detection for so long. Meanwhile, a likely theory floating after the preliminary investigation states that the terrorists could have crawled in through an 80-metre-long tunnel under farm lands to cross the International Border (IB) used for the Samba attack, which occurred on the same day.
Kolkata/Bengaluru: The increasing use of digital technologies in buying and selling merchandise for convenience and mobility pushed e-commerce in India to an inflection point in 2016.
The rapid growth of smartphones and internet connectivity across the country, especially in tier-II and III cities, has given greater access to virtual shopping and e-tailing for the tech-savvy generation and millennials.
Even as e-tail behemoths Flipkart, Snapdeal and Amazon vied for a greater pie of the growing e-commerce market, enterprises and businesses in diverse sectors have joined the bandwagon to hard-sell their products by leveraging digital technology.
“E-commerce in India is at an inflection point, thanks to robust growth in consumer demand. Mobile penetration and increasing use of smart phones have led to the emergence of m-commerce, which accounted for about 40 percent of the sector’s sales this year,” Tata CLiQ Chief Executive Officer Ashutosh Pandey told IANS.
Reuters
According to a study by the Internet and Mobile Association of India (IMAI), transition to mobile shopping is faster in India, which overtook the US this year in terms of active mobile users (220 million) and next only to China in user base.
The emergence of the Omni-channel model in e-tailing has also enabled netizens shop across e-portals, web sites, apps and in stores as per their convenience.
“As a result, e-commerce players are looking at seamless integration of online and offline stores to offer consumers a unique shopping experience in the virtual and real worlds,” Pandey asserted.
With digital payments increasing through multiple gateways for online and offline buying, the push for cashless transactions in the aftermath of the November 8 demonetisation has driven more and more consumers to e-shopping and m-shopping.
Greater use of cloud computing, data analytics and artificial intelligence has made e-commerce players not only competitive and smart in retaining their mass user-base but also map shopping trends and predict purchasing patterns to consolidate their dominant position for sustaining growth.
“The sector, however, continues to face a trust-deficit and last-mile delivery issues persist despite having robust logistics networks and partners. Lack of trust in online transactions makes many shoppers prefer cash on delivery, which is risky and time consuming,” Pandey lamented.
The sector is also bedevilled by infrastructure woes across cities and towns, increasing operational cost for timely delivery and expanding the customer base.
Though demonetisation has impacted the retail sector due to the cash crunch, digital transactions have enabled e-commerce firms to weather the crisis.
Growing at about 40 percent cumulative average growth rate (CAGR), the country’s e-commerce market is projected to touch a whopping $38 billion this fiscal (2016-17), with the online travel segment alone accounting for 70 percent, followed by e-tailing, financial services, classifieds, job searches and matrimony.
“The key drivers of the sector’s growth have been increased internet penetration, growing acceptability of online payments and an increase in per capita income,” a Snapdeal spokesperson said.
Favourable government policies and improving infrastructure have also contributed in connecting consumers and sellers across the country.
“The start-up ecosystem has gone through a phase of consolidation, indicating maturity in the sector for achieving scale, building capabilities and increasing the market share,” the spokesperson explained.
Given the demographics and rapid adoption of the internet, it’s advantage for all the stakeholders to grow and consolidate.
Global audit firm KMPG’s e-commerce partner Sreedhar Prasad said demonetisation had impacted the sector with a 30 percent dip in sales and, as a result, the annual growth may not show a big spike.
“The cost of business, including that of supply chains, remains a challenge. Unless the cost is regulated, profitability will be difficult in the sector,” Prasad added.
It’s been only a few hours since his name was announced as the new deputy governor of the Reserve Bank of India (RBI) in charge of monetary policy, but Viral Acharya is already a star. Media reports describe him as ‘Poor man’s Rajan’, picking the phrase from one of his old interviews, while some wrote about how the cricketer, singer and poet Acharya also has a music album to his credit.
The newfound stardom and fanfare accompanying Acharya in Indian media reminds one the initial days of Raghuram Rajan, former RBI governor, who was often called as a ‘rock star’ governor of Mint Street and James Bond who’s put the “sex” back into the Sensex’. At 42, Acharya, is the youngest deputy governor of the RBI. One needn’t be surprised if he morphs into a ‘junior rock star’ in media.
But once the welcome party is over, there is a trial by fire awaiting Acharya, who is entering the RBI at a time when the economy is fighting a self-imposed demonetisation crisis and the central bank itself is fighting a major trust deficit and credibility crisis, due to the way it has handled the Modi government’s decision on the evening of 8 November to demonetise Rs 500 and Rs 1,000 currency notes.
Acharya needs to hit the ground running making the RBI’s voice heard in the monetary policy committee (MPC) on the course of interest rates in a challenging economic scenario. Since there is already an MPC with experts in place, Acharya’s task wouldn’t be too tough as in the old days when the monetary policy was solely the central bank’s responsibility.
Nevertheless, there is likely to be pressure from the ruling political dispensation for steeper rate cuts in the backdrop of a sharp decline in economic growth due to the demonetisation-induced cash crunch.
The RBI itself has lowered the GDP forecast for the fiscal year 2017 to 7.1 percent from 7.6 per cent while forecasters have gone even more pessimistic forecasts (one even predicted 3.5 percent for current year).
Acharya isn’t a big fan of ultra-loose monetary policies though. He believes such a policy stance ,when introduced in a weak banking system, can turn out to be disastrous. In an interview given to Bloomberg Quint, Acharya had said, “We are yet struggling to figure out what the global economies are from the ultra-loose monetary policy. Whereas, now we are seeing emerging evidence of the unintended consequences that these policies have had. So, the biggest problem that I worry with low interest rates is when parts of your banking sectors aren’t healthy; it’s a recipe for disaster.” This was in the global context, but applies to India as well.
On the bad loan issue, one of the big headaches for India’s policymakers, Acharya had made two important remarks in the same interview.
First, to hive off bad loans into a separate entity. Acharya had said that Indian banking system need to create a bad-loan bank to separate the good assets from the bad. “I am absolutely proposing, either explicitly or implicitly, that we separate the unhealthy parts of the troubled banks from the healthy parts,” Acharya said.
Secondly, he warned that taking profit from the RBI and using it for the recapitalisation of state-run banks is a solution to the capital problems of India’s PSU banks.
“I don’t think half-baked solutions like taking the RBI’s profits and putting them into public sector banks is the way to go. I think that is just like putting on a band aid and actually it’s a pretty bad band aid in my opinion, because it, kind of, distances the fiscal authority from the monetary, it reduces the distance of the two. It, kind of, almost says that central bank should generate profit because you have to recapitalise the public sector. Everything smells wrong about it.”
Interestingly, one of the thought processes within the Modi government when it announced demonetisation was that the exercise will create some fiscal boost in the form of a ‘windfall’ profit from the RBI when its currency liability goes down.
The idea didn’t work since most of the money demonetised returned to the banking system and RBI governor Urjit Patel clarified that there is no such plan to transfer a one-time surplus to the government on the cards. India’s PSU banks are reeling under heavy bad-loan burden (totalling Rs 6 lakh crore as on September) and need huge capital to meet their Basel-III credit requirements, credit expansion needs and bad loan provisioning.
In a research paper co-authored with Krishnamurthy V. Subramanian of Indian School of Business — State intervention in banking: the relative health of Indian public sector and private sector bank — Acharya had said that many of the problems faced by Indian public sector banks are due to their lack of efficient human resources (he cited the P J Nayak committee report here), their inability to adapt to a rapidly changing technology and the issue of dual regulation of these banks by both the RBI and finance ministry. In the paper, Acharya strongly advocated that in the due course some of the public sector banks will have to by privatised.
“Over the long run, some of the public sector banks can be privatised or their assets reallocated. Some of them could be acquired by the relatively well-capitalised private sector firms; the ones with worst asset quality could be wound down; and, greater entry of smaller and newer banks can be enabled to yet maintain healthy levels of competition,” Acharya said.
As Patel’s deputy in charge of monetary policy, there is no clarity whether Acharya will have a say in the bad loan resolution issue. But, if he continues to argue for some of the above recommendations in the past, he may run into trouble with the government, especially on the issue of using RBI profit to recapitalise state-run banks.
But, beyond these two issues — monetary policy and banking sector NPAs — what one needs to watch is whether Acharya can offer a solution to the communication block the Reserve Bank is suffering ever since Patel took over as RBI governor. Over the years, especially during the tenure of Raghuram Rajan, the RBI has taken serious efforts to improve the central bank’s communication to the public also using public engagements of the RBI top brass to converse and clarify key policy decisions with various stakeholders. This was done with the assessment that effective communication is equally critical for a central bank as much as taking policy decisions.
But, arguably, the RBI under Patel has been a failure to carry forward this effort, especially during the demonetisation rollout. Former RBI deputy governor, Usha Thorat, in a column in The Indian Express, criticised the RBI for not communicating to the desired extent on certain critical aspects of demonetisation. “The RBI top management must communicate more through the media and speaking opportunities. This is necessary in the interest of transparency and credibility. It generates confidence that the RBI believes in honest communication,” Thorat said. Governor Patel’s prolonged silence since 8 November, despite uncertainty on cash crunch gripping the public, had attracted strong criticism.
Can Acharya, an articulate academic, fill the void of the effective communicator in the central bank? “Perhaps he can,” said Gaurav Kapur, an independent economist. “ Not just on the demonetisation issue, but on other policy decisions as well. Acharya can be the person to communicate the RBI’s policy decisions more effectively, which was largely missing during the demonetisation episode,” Kapur said.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>With the 50-day period for depositing of demonetized notes expiring tomorrow, Prime Minister Narendra Modi is set to address the nation before the dawn of the New Year.”Prime Minister Narendra Modi is likely to address the nation before dawn of the New Year,” sources said.However, it was not clear as to whether he would address the nation on Friday or Saturday.In his address, the Prime Minister may speak about the roadmap post the demonetization period especially on the steps likely to be taken to ease cash flow that has been a major problem ever since demonetization took place.He may also speak on the steps to deal with the problems the economy faces after the demonetization was announced on November 8.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.On Tuesday, Modi met economists and experts at a meeting in Niti Aayog to discuss the current economic situation.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>A city-based businessman was arrested on Wednesday for allegedly cheating and generating ‘fake and fictitious’ advance payment receipts to deposit “black money” to the tune of Rs 98 crore in banks following demonetization of Rs 500 and Rs 1000 tenders last month.Besides Kailash Chand Gupta (65), his kin and others have also been booked by the police under various sections of IPC for their alleged role in the “conspiracy”.Central Crime Station, a wing of Hyderabad Police, arrested Gupta for his alleged involvement in cheating and manipulation of records for illegal gain post demonetization.Another businessman Naredi Narender Kumar (59), MD of a private firm and brother-in-law of Gupta, was also arrested for abetment and hiding Gupta from police.Gupta runs three jewellery and bullion firms with his two sons, a daughter-in-law and another woman as directors.After demonetization, Gupta, along with his sons Nitin and Nikhil, daughter-in-law Neha and others, conspired and hatched a plan to convert their black money by depositing it with banks by generating fake and fabricated receipts for wrongful gains which caused loss to Government of India, stated a release from Hyderabad Police.Accordingly, the accused persons generated fake and fictitious advance payment receipts, purported to be acquired from about 3100 customers, for an amount of Rs 57.85 crore in name of their firm Musaddilal Gems and Jewelers Private Ltd.They also allegedly produced fictitious advance payment receipts for Rs 40 crore in name of another firm, Vaishnavi Bullion Private Ltd, claimed to be acquired from about 2100 customers, and issued computerised receipts for the same, police said.”All the said receipts were shown to have received between 9 PM and 12 midnight on November 8, and they subsequently got the amounts deposited at SBI, Panjagutta branch and Axis Bank, Banjara Hills branch respectively,” it said.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Within a fortnight of Prime Minister Narendra Modi’s announcement to ban high currency notes, several ministries in his government went into a tizzy tackling problems, particularly in labour-intensive sectors.However, the government now feels the storm has passed. The string of complaints and representations that came last month owing to cash crunch from various trade and industry bodies have slowed to a trickle, a senior union minister said. As the 50-day timeline sought by the Prime Minister, who had promised a “new India in the new year” nears its end, the central government and BJP are heaving a sigh of relief saying the “worst is over”.The BJP was hoping to cash in politically on demonetization and the Prime Minister’s assurance to fight black money. Some party MPs had expressed apprehensions about the impact of the inconvenience faced by people because of the cash crunch on the party in the forthcoming elections, particularly in Uttar Pradesh. Internal ground reports also indicated that demonetization would give the BJP an advantage. The party national executive is holding its meet, the last before assembly elections in five states, next week in the Capital. Ahead of the meet, Modi will be holding a rally in Lucknow.The government has indicated that various departments have received reports from the ground showing that things had started improving over the past fortnight and the story of demonetization woes was nearly over. While it was not entirely ruling out the flip side of its impact on the economy, it saw it as a temporary phase that was waning faster than expected, the sources said.One by one, the woes of various sectors because of cash crunch in the aftermath of demonetization had to be addressed, but the situation is now returning to normal, sources said, adding that the labour force which had migrated was getting back and the use of digital mode for transactions was picking up.The worst affected were around half a dozen labour intensive sectors including handloom, carpet weavers and metal pickers, where payments were made in cash.Worried that the cash crunch would hit farmers in the northern states, including poll-bound Uttar Pradesh, where the sowing of the rabi crop was just starting, the government had asked NABARD to ensure credit flow in rural areas in the end of November, sources said. The money flow into metropolitans was cut down to increase availability in rural areas.The government had also faced demands from the RSS-affiliated Bharatiya Kisan Sangh (BKS) to withdraw the decision to scrap import duty on wheat or give an assurance that the rabi crop would be bought at the prevailing MSP. Government sources said the move was aimed at avoiding any knee-jerk reaction in case of shortage of wheat and that import was not mandatory. It is understood that the government has given an assurance that the concerns would be kept in mind.
Prominent daily newspaper Kashmir Reader was back on the stands on Wednesday after a gap of three months. A ban was imposed on the newspaper on 2 October by the state government during the unrest in Kashmir Valley. The government had called the newspaper a threat to “public tranquility.”
An order issued by the deputy commissioner of Srinagar had said that the material and content published by the newspaper “tends to incite acts of violence and disturb public peace and tranquility.” Now in its order for revocation, the deputy commissioner said, “Kashmir Reader was directed to abstain from printing and publishing under Section 144 of the CRPC. That order remains enforceable for two months only as such has lapsed on 30 November, 2016. Since no extension has been ordered by the government, there is no ban on publishing of the newspaper as on date.”
Screen grab of Wednesday’s edition of Kashmir Reader
During the unrest nearly 100 people were shot dead and 14,000 injured in the street protests and stone-throwing incidents, bringing the state to a halt. It was the media that continued to highlight the stories of killings and injuries caused by the pellets fired by the security forces to control the protests. In many incidents, journalists were threatened, beaten up or not allowed to perform their duties.
The government’s anti-press sentiments were clear when Chief Minister Mehbooba Mufti walked out of a press conference in August after being questioned about the public protests. She had ridiculed the journalists and said, “Thank you, now have a cup of tea,” while walking off the podium, where she was accompanied by Home Minister Rajnath Singh. It is believed that the government’s behaviour towards the media only angered the people protesting on the streets more.
In Kashmir, the ban on Kashmir Reader was seen as a warning to the whole media fraternity. In their first editorial after resuming publication, the newspaper wrote, “When a government decides to ban a newspaper, unheard of in the 21st century until we were arbitrarily barred from publishing, it could either mean the administration’s lack of confidence in addressing the cause(s) of such widespread unrest or a failure to muster required political resources for a process of resolution.”
Now it looks like the government wants to make amends with the media. After the Kashmir Editors Guild elections selected Fayaz Kaloo as its president, the chief minister met the guild members along with Finance Minister Haseeb Drabu.
According to a spokesperson, the chief minister during the meeting with the guild, said, “She hoped the guild would play its role in strengthening the institution of journalism in the state and assured the government’s support.”
The guild members later visited the Kashmir Reader office on Tuesday, where Kaloo said that the curbs on the media are nothing new but every time there was a crisis, the media has dealt with it head on and will continue to do so. “Our strength comes from the challenges we face on a day to day basis but it has its own costs,” he said.
The global diamond industry is facing disruption that could stretch through the first few months of next year, including Valentine’s Day in February, as a result of Prime Minister Narendra Modi‘s radical move to abolish most of the nation’s cash overnight.
In Surat, craftsmen usually spend 10-12 hours a day in small mills or grimy sheds cutting and polishing 80 percent of the world’s diamonds but the business is based on cash and the demonetization of the high-value banknotes from 8 November has prevented many from operating. Thousands of diamond brokers in the area’s narrow lanes are also doing little business.
The lack of cash is not the only problem for an industry that employs 1 million people in India, most of them in this city. Modi’s shock treatment is intended to make it much more difficult for those laundering ill-gotten gains or evading taxes, and that means diamond buyers are demanding proof of tax payments that are often not available, the traders said.
A craftsman checks the shape of a diamond at the polishing department of a diamond processing unit at Surat in Gujarat. Reuters
Top diamond miners, such as Anglo American-owned De Beers and smaller Canadian producers such as Stornoway Diamond and Dominion Diamond are seeing weaker demand and prices for cheaper stones used in lower-priced jewellery.
The picture for retailers and consumers of diamonds is less clear. The cash crunch has also badly hurt consumer demand for diamond jewellery in India, the world’s third-biggest market.
That means there are more of the cheaper finished stones to export, helping to create a temporary glut and lower prices at wholesaler and store level. However, that may not last if the cutters and polishers of India can’t get back to work soon.
But the luxury buyer doesn’t have to worry. Much of the higher-value jewellery business, with the highest grade one-carat stones usually costing more than $14,500, is protected because cutting and polishing is also done in Israel, Belgium and by bigger Indian companies that rely on bank transactions.
“The knock-on effect of Indian demonetisation has meant a reduction in the prices of lower quality diamonds,” said Tobias Kormind, managing director of 77 Diamonds, an online jewellery retailer based in London. “As a result, we’ve seen an increase in demand for those kinds of diamonds as our clients have snapped up these favourable deals.”
In India, jewellery demand typically climbs in the winter months’ wedding season. But this year sales are plunging as nearly two-thirds of jewellery is usually purchased with cash, which is in short supply.
Ishu Datwani, owner of Mumbai-based Anmol Jewellers, says his sales are down nearly 70 percent since the government scrapped the high-value notes.
The demand is unlikely to revive any time soon as India struggles to dispense enough new notes, industry officials say.
“During the cash crunch, diamonds are one of the last things people want to buy. At least for the next six months demand will remain weak,” says Praveen Shankar Pandya, head of India’s Gem & Jewellery Export Promotion Council (GJEPC).
The crisis hit at a time when there were plenty of stones in the retail pipeline or was being processed. India’s rough diamond imports between April and November jumped 30.5 percent, while exports of cut and polished diamonds during the period rose 12.2 percent, GJEPC data shows.
Diamond processors bought rough diamonds aggressively, expecting a jump in exports and rising Indian demand, but now they are struggling, said trader Dharmesh Navadiya.
In trading hubs like Hong Kong, many retailers are stuck holding diamonds they bought three years back at higher prices expecting robust demand from China that didn’t materialise.
“There has been no supply crunch as the market is already flooded, especially the low carat diamond,” said Jonathan Rotbart, a distributor of gems in Hong Kong.
Shock to the market
“The market is frozen. We don’t have cash to buy diamonds,” said Kalpesh Savaliya, a trader for 25 years who was sitting cross-legged on a mattress behind a low wooden desk in Surat.
As small operators close, India’s rough diamond imports could decline by up to 25 percent between December and March, said Mehul Choksi, chairman of Gitanjali Gems, India’s biggest diamond jeweller.
Miners are already feeling the pain with some lower-quality stones being discounted by more than 25 percent from prices before demonetization, said Panmure Gordon analyst Kieron Hodgson, in a recent note to clients.
In its final 2016 tender, De Beers said sales were affected by a slowdown in lower-value rough stones, a trend Hodgson expects to see repeated for at least the next three months.
Dominion Diamond, with stakes in two Canadian mines, expects its sales in its fourth quarter ending 31 January to be hurt by the Indian cash crisis, and sees weaker demand for small stones extending to its fiscal first quarter. Demonetization was a “shock to the market,” said Chief Executive Brendan Bell.
Stornoway, which this year finished building Quebec’s first diamond mine, withdrew smaller, lower-quality stones from its first-ever tender in November due to poor demand and prices.
But Mountain Province Diamonds, which owns 49 percent of Canada’s newest diamond mine, Gahcho Kue, indicated it isn’t overly worried. “Small diamonds are roughly 80 percent of your production and 20 percent of your revenue – and the demand for the large diamonds remains robust,” said CEO Patrick Evans.
“The diamond market is fine. Average prices are up 7 to 9 percent this year, but small diamonds are down about 50 percent.”
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Upping the ante on the government’s demonetization drive, Congress Vice-President Rahul Gandhi on Wednesday said Prime Minister Narendra Modi has sacrificed the common man in ‘yagna’ against black money.He further said that demonetization ‘yagna’ is aimed at benefiting the rich.Addressing the media on the party’s foundation day, Rahul demanded that PM Modi must reveal the amount of BlackMoney recovered since demonetization.Here are the demands made by Rahul Gandhi# Modi has performed demonetization yagna for 50 families. Many people have suffered and for this loss, government should give compensation.# Modi should reveal how much black money recovered post November 8, how much economic loss nation suffered and how many people lost their lives.# Government should come out with list of those who deposited more than Rs 25 lakh in their accounts before demonetization.# Restrictions on withdrawals must be lifted now. It is taking away the financial independence of the people.# PM must explain how he will he compensate farmers who are affected the most by demonetization.# Farmers have been hit the most, PM should waive off their loans and give bonus at 20% MSP. # A sum of Rs 25,000 should be deposited in the account of every woman of a BPL family that has suffered post demonetization.# Double MNREGA wages and Income Tax and Sales Tax rebate for small businessmen and shopkeepers.
Much before economists like Jagdish Bhagwati and Arvind Panagariya weighed in favour of Prime Minister Narendra Modi’s policies as Gujarat chief minister, Bibek Debroy stirred a hornets’ nest by praising the Gujarat development model. Debroy was then working in the Congress’ think tank — Rajiv Gandhi Institute of Contemporary Studies. Needless to say, Debroy had to quit. But that did not stop him from speaking his mind. Debroy drew close to Modi prior to the 2014 Lok Sabha elections and played a critical role in shaping up his economic policies. He was drafted as a member of the Niti Aayog after the extinction of the Planning Commission. In the mean time, he was tasked with reviewing the functioning of the Indian Railways.
At the moment, Debroy wears many hats — one of them as a defender of demonetisation. He has been valiantly defending the government’s move to make currency notes of the denomination of Rs 500 and Rs 1,000 illegal tender. He says that it is just a beginning to clean up the entire economic ecosystem. In a wide-ranging interview, Debroy explains the rationale and long-term impact of the move.
Here are some edited excerpts:
Since the demonetisation drive is coming to a close, can you explain for us the objectives, benefits and travails that the exercise entailed? As an economist and policy analyst, how do you sum it up?
One should not look at 8 November (the date on which Modi declared currency notes of Rs 500 and Rs 1,000 as illegal tender) in isolation. The reason I am mentioning this is because there are various other things that have happened outside 8 November and will continue to happen outside 8 November. And the day should be considered from this broader perspective. Let me give some example of that. The creation of this new black income and I am deliberately using the phrase ‘black income’ because we are talking about specifics. And there is wealth which from an economist’s point of view is stock, and there is income which is of flow.
So far as the issue of creating fresh black income is concerned, 8 November was not meant to address that. There are other instruments to take care of that, like negotiating and re-negotiating agreements with Mauritius. This has already happened. Take for instance the restriction on cash transactions above Rs 20,000. Take something like the Real Estate Bill, which among other things promises that it would transform the real estate sector from unorganised to organised. It will not happen overnight but over the period of time. The prime minister has already indicated that many such measures will be introduced. And remember in the background of this the income declaration scheme has already happened.
File image of Bibek Debroy. Image credit: Forbes India
There was a greater scrutiny of people who might have had black income. So when people are criticising the demonetisation it should be understood that there are other measures which are meant to check the creation of new black income and nobody is saying that this is the only way all the issues can be addressed.
Let’s take a new target and let me define the term ‘black’. There are two different uses of the term black. They are not quite the same. The first is when the activity is illegal like crime or drugs. The other type of black is when the activity is not illegal. So the income generation is perfectly illegal but the tax that ought to be paid was not paid. Nobody is denying that black exists in non-cash forms like gold or property. There are instruments that have been introduced to tackle this and will continue to be introduced. Just because the substantial part of this black income is in other forms does not mean that it (the matter of black cash) should not be addressed.
Let’s take the third point. In India, cash is used substantially. And it is obvious as India is not a developed country. No one is expecting the use of cash in India to disappear overnight. But look at the ratios. The GDP-cash ratio in India even till last year was 13 percent. Some 15 years ago it was nine percent. Someone needs to explain how this ratio increased from nine percent to 13 percent. Even if I assume that we need cash, it should be understood that when a country develops, the use of cash reduces. Then how and why did we witness this increase?
I look at countries like Bangladesh, Sri Lanka and Pakistan. What is the GDP-cash ratio in Bangladesh and Sri Lanka? It is five percent or three percent. Even in Pakistan, it is nine percent. So let us accept that there is too much cash around. Let us also accept that there have been deliberate compulsions to use cash. Take for example the Payment of Wages Act. Section 6 of the Act, which has been there for years, has said you must pay wages in cash unless you have concurrence from the employee not to do so. Who will do so? Why should we have such a rule in this age? It is only now that things have changed; it should have been done years ago.
And take for instance the high fees on non-cash modes. Someone should have objected to the rates they charge. So let us also recognise that there have been disincentives not to use cash. Let us also remember that Jan Dhan Yojana accounts have already been made. So we have now more than 260 million accounts and many have RuPay cards. But sadly for them it is just a piece of plastic that will be used at ATMs as they have not been still educated and convinced that these RuPay card can be used for something else also.
Someone will come along and say, “Look at the unbanked population in India” and add that he doesn’t believe in Jan Dhan figures. So my response is that you shouldn’t believe in these figures. But here is the survey conducted in August — not by the government, but by a private institution, and it states that 97 to 98 percent of both rural and urban populations have bank accounts. Now, if one says that all of them are not using bank accounts, I may agree. But don’t say that they don’t have bank accounts.
How much exactly do the currency notes of Rs 500 and Rs 1,000 account for in the economy? And how much of it have we got back?
There is a lot of confusion around as people are using two different bases. One is the RBI balance sheet figure which is slightly old and which puts the number at Rs 14 lakh crore. The other one is the figure on 8 November. It is the latest figure and it puts the number at almost Rs 16 lakh crore. Let’s stick to the Rs 16 lakh crore base. Now out of this how much was black? How much is going to come back into the system? To the best of my understanding, no one in the government has predicted or projected anything.
How much has already come in? We don’t really know. There are all kinds of figures floating around. These figures may not always be final.
Let’s take the example of fake currency. The fake currency check goes through three different layers. Once it has gone through all three it is very unlikely that it will be deposited in the banking system. But today when you are looking at the figures it is perfectly possible that fake currency was deposited earlier. Alternately, you go and take old notes at petrol pumps. It may be showing up in the accounts that petrol pumps maintain with the bank. It may also be showing up with the report that BPCL is giving to the government. So until the figures are final, one really does not know.
But the last figure I have is Rs 12 to 12.5 lakh crore. Which means, I personally think, that most people who were going to deposit it have already done so. Even if I accept that Rs 14 lakh crore comes in by the end of the month, the remaining Rs two lakh crore is not the indicator of success. A lot of criticism is happening that only Rs two lakh crore will be left. To the best of my knowledge, no one in the government has said that it is the criterion of success. And that’s because the money that is coming to the system has not become white. It will invite taxes and penalties if required and will have deeper scrutiny. Just because it is in the banking system does not mean it is legitimate.
I mentioned earlier that people who are holding cash are being dissuaded to do so. So it is good that it comes into the system. I think it is a success as people are realising that this initiative is a serious one. So there is not much point in my hanging on to cash. To my understanding, it is an attempt at cleaning up the entire system. So if I look at it narrowly just from an economist’s point of views, I am missing the true picture. This is the beginning of an attempt to clean up the gold market. I am not talking about jewellery market, which is different. It is also an attempt to clean up the financing of capital market transactions and real estate. And also, one has got electoral reforms as part of the debate agenda.
I am not saying that something substantial has happened, but it is part of the discourse. It should be seen as part of the broader process. You can dispute the survey figures. One survey says that 60 percent of the people are supporting you, another says that 80 percent back you. What you find across all surveys is that a large number of people are supporting the measure and it is because, I feel, they have realised that 8 November was just a small piece in the process.
My last point is when you are doing something like this you can plan perfectly. But when you do plan perfectly, it becomes impossible to preserve secrecy. To preserve secrecy, I may take some decisions, you in the same position may take some other decision. It cannot be the case that my decision will be perfect as I may not be able to assess all eventualities. But if you are in my place, you might also take decisions that might not have been perfect.
Obviously, there was inconvenience.
Let me divide it into different parts. One, the task was to get enough new notes to banks; two, naturally when there is a shortage there will be rationing. So in this scenario it is decided to take smaller denomination notes to rural areas; and three, it is one thing to get the notes to the bank and it is another to take it to ATMs. As a government you do not have much of control on how the banks take the money to the ATMs because it is outsourced. So there is a problem with banks and ATMs. I think, purely anecdotally as there is no data, that bank problem has decreased day-by-day even in Delhi and Mumbai. ATMs? Yes, there are still problems. I have no idea how long it will take.
From where did the word “windfall” gain currency in this entire exercise?
Right from the beginning, I have followed what the finance minister and the finance ministry have been saying. I have seen that there was a recognition that there are three different channels through which money will come. One is the money that does return. This reduces the liabilities of the RBI. When liabilities of the RBI are reduced that is not automatically the money that in any fraction has gone to or will go to the government. It is for RBI and finance ministry to take decisions. Today, sitting here we do not know how this part will be handled.
The second part is that there will be some money that will come into the banks, mostly public sector banks. It will ease their stressed assets problems and to that extent, it enables them to lend better. But again, the banks, even if they are public sector banks, are not the government. The third is the money that actually comes into the consolidated fund of India through taxes, penalties and other means.
Now I have two things to say on this. First, I have already mentioned the income declaration scheme. Over and above this, action has been taken by the income tax department. It has resulted in a lot of money coming in. Second, when I declare Rs 100 as additional income then those Rs 100 are not revenue to the government. Only the taxes and penalties are revenue to it. It is this money that the government can use for different purposes. How the government chooses to use it we will know partly on 1 February (Union Budget). I said ‘partly’ because we will not know the figure till the end of March, which is when the window shuts. As far as windfall gain is concerned, I don’t think the government has ever used this word.
When the prime minister announced demonetisation, he laid down certain objectives: Eliminating black money and fake currency, and tackling terrorist activities. But over time it seems that goalposts have changed.
No, I don’t think they have changed. There were multiple objectives. I will give you an example. On this issue, I have been giving interviews to different people. Somewhere, I would have said something to one person responding to specific questions and I would have said something different to another, but that does not mean that my focus changed. You see it is not a single objective. Lot of people are only referring to what the prime minister said after 8 Novembe. My request is that you look at what he has been saying earlier in his monthly radio broadcast Mann Ki Baat. This has been figuring in his speeches for quite some time. It is not fair to say that goalposts are changing.
Take the case of fake currency. I don’t think that the issue is absolute amount of fake currency. In 2014, the Indian Statistical Institute (ISI) put the number at Rs 400 crore. There is an Intelligence Bureau (IB) figure of Rs 2,400 crore. It is not about what the exact value of fake currency is, but to understand that it does not take a lot of money for a terrorist attack with a lot of undesirable consequences. Even Rs 10 crore is good enough to cause enough damage. If I am destroying the counterfeit apparatus today there is no surety that it will not reappear in future. It has to be a continuous process.
So you are saying in a way that this talk of changing goalposts is not valid.
I think so. I have been listening to Modi. I think the most important objective here was to clean up the system.
Now the next strike in all probability will be on benami property. How do you think the government will be able to do this? How much impact will it have on real estate? Is there any assessment?
People have been complaining that real estate sector has been destroyed because of demonetisation. I ask what has been destroyed. Is it the value of the property? Is it the registered value of the property? There is a big difference between the two. Is it the black component or the white component? And the invariable reaction of anyone I speak to on this is that what has been destroyed is the black component. In Delhi, 50 percent of transactions use to be in black and 50 percent in white. Right now the system is in shock but I am certain that when it is stable, it will no longer be 50 percent black and 50 percent white. All of it may not go, but the amounts will reduce. Whenever the Goods and Services Tax (GST) is introduced, it will bring a lot more into the net. So it is part of the entire thing and not just 8 November.
The political part — the elections etc — requires a debate. It is not easy. And you have to also see that because of this a lot of poor people have started using non-cash means. So what I am seeing, though it is difficult to get it quantified, is that in many ways middle men are getting eliminated from the system.
How do you think it will impact the tax base?
Indirect tax will increase because of GST. There is a difference between tax avoidance and tax evasion. Tax avoidance is legal whereas tax evasion is illegal. So to broaden the direct income tax net, you need to take care of exemptions. Today, when a chartered accountant is not paying his taxes it is not always the case that he is evading. Rather he might have legitimate exemptions of which he can avail. I have a feeling that in future there will be a greater degree of enforcing that for certain transactions you cannot pay in cash. The segments that will be then made more accountable will be lawyers, chartered accountants and doctors.
There is another difficult issue that is linked to it: Taxing people in rural areas. Technically taxing agricultural income is a state subject but taxing non-agricultural income of the farmer is not a state subject. There is an issue there that is more about enforcement. So part of it is broadening the base, but also simultaneously ensuring that tax department, both direct and indirect, does not unnecessarily cause harassment to honest tax payers and I feel that we will see something on this line in the budget.
How do you react to reports of people illegally exchanging money? Do you feel that banks did not behave in the manner they were suppose to?
One of the channels that was misused quite a bit was exchange, which is really an RBI thing. I think there were three problems with banks. First, they were not very vigilant about the functioning of the ATMs. They were talking about whether the ATMs were calibrated, but I am talking about how many ATMs were working. Second, from the second day we knew from newspapers that bank officials, though they worked really hard, connived. How do we know that they connived? Because they have been caught. So there is a positive way also to look at this.
I am a little confused about the third as there is lack of information about it. There is a shortage of notes. When there is a shortage, there is a certain principle on which distribution is done. What is the principle that RBI follows in distributing notes to different banks and what is the principle that banks follow in distributing to different ATMs? I don’t have any information about this but I don’t think that this was done in a very rational kind of way. If a bank like SBI has many ATMs then the bank should have information on which ATM is used to what extent and the distribution should have taken place accordingly. Am I (as a bank) doing this with efficiency? I don’t think so.
Even in case of honesty, I am not very sure that it was very efficiently followed. But this is my analysis and is purely anecdotal. I often take this route between Khelgaon and Aurobindo Marg (in Delhi) and there are roughly 20 ATMs. Two days ago I found that 10 of them were working. If there is a general shortage then all should not be working. So I think it should be probed how they allocate money.
But there were so many news reports about how old currency was exchanged for a commission of 10 percent and 15 percent, which later came down to five percent.
If they have got less money, there is some destruction. There has been some tracking of this at aggregate level. Initially, when it happened, it was happening at 35 percent. It has not come down to five percent. It has come down to a 10 or 14 percent level. There is still destruction.
How do you react to the opinion emerging from the world around on demonetisation, some of them are calling it an ‘immoral act’?
I don’t understand what is immoral here. Let us get the principles clear.
Your money is in bank. No one said that you cannot use that money. All that has been said is that there is a limit on withdrawal.
You want to pay through cheque, you can do that freely. You do digital transactions, you are free to do that. So the first principle of criticism that I am being deprived of my property is factually incorrect. Please understand that someone who is based abroad does not know what is happening on ground here. They are forming their opinion on what you people are writing here in the Indian media.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Workers employed by a builder on Tuesday complained to police that their services were terminated after they refused to accept salary in demonetized currency notes.”On complaint of the workers, the builder has been called for questioning. If any illegality is found, action will be taken against him. Also, efforts will be made so that workers get salary through cheques,” DSP Arvind Yadav said.They also held a protest outside the builder’s office.A worker, Shesh Kumar, alleged, “The salary for October was paid in old currency notes which was accepted by the workers. Now, the builder is pressurizing us to accept November’s salary and that for December in advance in old currency notes.””When we refused, the builder informed us that our services have been terminated,” the worker alleged.
Expressing their support for the November 8 demonetisation of high-value currency that has resulted in a major cash crunch, a group of experts on Tuesday told Prime Minister Narendra Modi that the move help to strengthen the process of formalising the Indian economy, the major part of which is organised informally.
“Demonetisation was discussed as a move towards formal economy,” NITI Aayog Vice Chairman Arvind Panagariya said, briefing reporters following Modi’s interaction here with a set of noted economists at a session on “Economic Policy – The Road Ahead” organised by the think-tank.
NITI Aayog, Vice-Chairman, Arvind Panagariya. Image courtesy PIB
“All the speakers stressed the need to bring workers and activity into the formal sector,” Panagariya said in reference to the stated aims of the 8 November demonetisation announcement for curbing corruption, black money, counterfeit currency and terror financing.
Complementing the demonetisation process, he said it is the government’s drive to promote digital transactions and a less cash economy so as to move from the informal to greater formalisation of the economic system.
“The speakers pointed out that 90 per cent of the labour force in the country is still in the informal sector,” Panagariya added.
Besides Niti Aayog and Finance Ministry officials, the session was attended by economists and experts, including Pravin Krishna, Sukhpal Singh, Vijay Paul Sharma, Neelkanth Mishra, Surjit Bhalla, Pulak Ghosh, Govinda Rao, Madhav Chavan, N.K. Singh, Vivek Dehejia, Pramath Sinha, Sumit Bose and T.N. Ninan.
The meeting with experts to take stock of the economy assumes significance against the backdrop of the cash crunch after the government last month scrapped the Rs 1000 and Rs 500 notes.
Economists and various state governments have voiced concerns that demonetisation will disrupt the economy and drag down the GDP growth rate for this fiscal by up to two percentage points.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Slamming Mayawati for linking the Enforcement Directorate action against BSP to her being a Dalit, Union Minister Ram Vilas Paswan on Tuesday said her Dalit origin does not give her a “licence” to indulge in corruption and she should let the law take its own course. Paswan, a prominent Dalit face of the ruling BJP-led NDA, hit out at the former UP chief minister over alleged deposits of Rs 104 crore in BSP’s bank account following the note ban and said it was shocking that a party claiming to represent the most downtrodden sections of society has so much money. “My party LJP works for Dalits. We have six Lok Sabha members and the total money in LJP’s bank account is Rs 1,03,198. Being a daughter of a Dalit does not give you licence to indulge in corruption. She must let law take its course and let authorities probe her party’s account,” he told reporters. Mocking Mayawati’s strident opposition to demonetization since it was announced on November 8, the LJP president said it has now become clear “why likes of her and RJD chief Lalu Prasad” have been its most vocal critics.”They were hit the hardest. That is why they are making so much of noise,” he said.Referring to deposits of Rs 1.43 crore in bank accounts of Mayawati’s brother, Paswan said she must come clean on the source of the money. “Who is he? What is his source of income? Why is she afraid? She should let agencies probe all accounts and deposits,” he said.The disclosure of deposits in BSP’s bank account is not the end but only the first chapter and more details will come out soon, he said.He also took potshots at joint programme by Congress, TMC, RJD and some other regional outfits against demonetization. Bihar Chief Minister Nitish Kumar, who is an ally of Congress and RJD, supports note ban and they are opposing it for political reasons, he said and dared these parties to withdraw support from Kumar’s government if they are serious in their opposition.
<!– /11440465/Dna_Article_Middle_300x250_BTF –> Mumbai police on Monday served a notice received from the Unlawful Activities (Prevention) Tribunal, set up to examine the evidence on the basis of which the Centre banned televangelist Zakir Naik’s NGO Islamic Research Foundation (IRF) last month, on the organisation’s legal counsel here.”The notice was received from the registrar of the tribunal and was served on IRF’s legal counsel SHA Jamati at the organisation’s office here,” a police spokesperson said. The tribunal was set up to adjudicate whether or not there was sufficient cause for declaring IRF an “unlawful association” under the Unlawful Activities (Prevention) Act, 1967. IRF was declared an unlawful association under section 3(1) of the UAPA, with the gazette notification, dated November 17, stating that the NGO and its members, particularly its founder Naik, had been “encouraging and aiding its followers to promote or attempt to promote disharmony or feelings of enmity, hatred or ill-will between different religious communities and groups”The “divisive ideology” propagated by IRF and its members, including Naik, is “against India’s pluralistic and secular social fabric and it may be viewed as causing disaffection against India”, the notification had said.The tribunal issued notices seeking responses from the Maharashtra government, IRF and other “interested persons” after its preliminary hearing. The NGO has been granted time till February 6 for filing its response.The Centre had cited Naik’s alleged role in radicalising Muslim youths “to commit terrorist acts”, besides the purported role of the organisation’s “members/associates” in unlawful activities to justify the ban before the tribunal.
<!– /11440465/Dna_Article_Middle_300x250_BTF –> The ED on Monday detected cash deposits totaling over Rs.104 crore in an account belonging to the BSP and Rs 1.43 crore in an account belonging to party Supremo Mayawati’s brother Anand in a branch of United Bank of India here, sources in the Enforcement Directorate said.Officials said the agency, Enforcement Directorate, as part of its routine survey and enquiry operations to check suspicious and huge cash deposits in banks, today visited the Karol Bagh branch of the UBI and found huge deposits made in these two accounts post-demonetization. Attempts to elicit a response from BSP on the issue failed. They said the sleuths called for the records of the deposits made in the BSP account and found that while Rs 102 crore was deposited in Rs 1,000 notes, the rest Rs 3 crore was deposited in the old Rs 500 notes.Officials said they were were astonished to find huge cash of about Rs 15-17 crore being desposited every other day. The agency also detected another account in the same branch belonging to Anand, brother of BSP chief Mayawati, where a total of Rs 1.43 crore funds was found. A sum of 18.98 lakh came into account using the old notes after the ban. The ED has sought full details about the two accounts from the bank even as it is understood that the agency will write to the Income Tax department which has the powers to go into the legality of donations and contributions made to political parties.The ED has also asked the bank to provide to it CCTV footage and KYC documents used to open the accounts, they said. With regard to Anands’s accounts, it is understood, that the agency will soon issue notices to him and also intimate the I-T sleuths for investigation under anti-tax evasion laws. The agency has been carrying out enquiry operations at over 50 bank branches to check possible instances of hawala dealings and money laundering after the government scrapped the two high value currencies of Rs 1,000 and Rs 500 on November 8.
Rajkot: Two persons were arrested on Monday with counterfeit currency in the denominations of newly introduced Rs 2,000 and Rs 500, having a face value of Rs 26,10,000, police said.
Representational image. AFP
“Acting on a tip-off, the city crime branch sleuths intercepted a car at Hanuman Madhi area and arrested two persons with fake currency notes of Rs 2,000 with face value of Rs 26 lakh, and of Rs 500 with face value of Rs 10,000,” Rajkot Commissioner of Police Anupam Singh Gehlot told mediapersons here.
The arrested persons were identified as Hruday Jagani and Lakshman Chauhan, both hailing from Ahmedabad, he said.
The notes were kept inside the speaker box of the car in which they were travelling, Gehlot said.
He said a high quality colour printing machine was also seized from their possession which was used to print the currency notes.
The cover of notes’ bundles bore the tag and seal of a public sector bank to make them look like original, he said.
“Hruday used to work as a printer and has a sound technical know-how of printing and cutting notes with perfection so that they look like original,” Gehlot said.
“The mastermind was identified as one Jignesh Shah, who is a land broker in Ahmedabad. Jignesh would find customers looking to exchange their old currency notes, and would order printing of notes after he struck a deal with his customers,” the senior police officer said.
A search is on to nab Shah.
He said the accused might have supplied several such notes since demonetisation came into effect on November 9.
“They would bring such notes into circulation in different ways. They’d hide duplicate notes in the bundle of original notes so that it was supplied easily, and would earn around Rs 15,000-20,000 on supply of Rs 2 lakh,” Gehlot said.
“Another modus operandi was to hide blank notes below the Rs 2,000 lookalike duplicate notes,” he said.
Gehlot said ever since demonetisation came into effect, around Rs 2 crore worth of old notes and Rs 70 lakh of new notes were seized from Rajkot alone.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Two persons were arrested on Monday with counterfeit currency in the denominations of newly introduced Rs 2,000 and Rs 500, having a face value of Rs 26,10,000, police said.”Acting on a tip-off, the city crime branch sleuths intercepted a car at Hanuman Madhi area and arrested two persons with fake currency notes of Rs 2,000 with face value of Rs 26 lakh, and of Rs 500 with face value of Rs 10,000,” Rajkot Commissioner of Police Anupam Singh Gehlot told mediapersons here.The arrested persons were identified as Hruday Jagani and Lakshman Chauhan, both hailing from Ahmedabad, he said.The notes were kept inside the speaker box of the car in which they were travelling, Gehlot said.He said a high quality colour printing machine was also seized from their possession which was used to print the currency notes.The cover of notes’ bundles bore the tag and seal of a public sector bank to make them look like original, he said.”Hruday used to work as a printer and has a sound technical know-how of printing and cutting notes with perfection so that they look like original,” Gehlot said.”The mastermind was identified as one Jignesh Shah, who is a land broker in Ahmedabad. Jignesh would find customers looking to exchange their old currency notes, and would order printing of notes after he struck a deal with his customers,” the senior police officer said.A search is on to nab Shah.He said the accused might have supplied several such notes since demonetisation came into effect on November 9.”They would bring such notes into circulation in different ways. They’d hide duplicate notes in the bundle of original notes so that it was supplied easily, and would earn around Rs 15,000-20,000 on supply of Rs 2 lakh,” Gehlot said.”Another modus operandi was to hide blank notes below the Rs 2,000 lookalike duplicate notes,” he said.Gehlot said ever since demonetisation came into effect, around Rs 2 crore worth of old notes and Rs 70 lakh of new notes were seized from Rajkot alone.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Dinanath Bhargava, a co-artist in the team that sketched the national emblem ‘Lion Capital of Ashoka’ and decorated the pages of the Constitution’s manuscript, died at the age of 89 in Indore.Bhargava was suffering from cardiac ailments since the past decade.His daughter-in-law Sapekshi Bhargava said that he breathed his last on Saturday. “He is survived by four children including two sons,” she added.Born on November 1, 1927 at Multai in Betul district of Madhya Pradesh, Bhargava was chosen by noted painter Nandlal Bose, then the Principal of Kala Bhavan Shanti Niketan, in the group for designing the pages of the Indian Constitution’s manuscript.Bhargava was pursuing a 3-year Diploma in Fine Arts at Shanti Niketan at that time.The national emblem of India was adapted by the Government of India on 26th January 1950.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Congress MP Ashok Chavan has approached the Bombay High Court challenging a decision of Maharashtra Governor C Vidyasagar Rao granting sanction to CBI to prosecute him in the Adarsh housing society scam.In February this year, Governor Rao had granted sanction to the CBI to prosecute Chavan for offences under IPC sections 120 (b)(criminal conspiracy) and 420 (cheating and under various provisions of the Prevention of Corruption Act, in the Adarsh Cooperative Housing Society case.The CBI had accused the former state Chief Minister of approving additional floor space index for Adarsh society in return for two flats for his relatives. He was also charged with illegally approving, as the then Revenue Minister, allotment of 40 per cent of the flats to civilians.Chavan, in his petition filed recently, challenged the sanction order and said it was “arbitrary, illegal and unjust” and passed without “proper application of mind” and with “malafide intentions”.The petition, which came up for hearing on December 22, was then adjourned. It will now come up for hearing before a division bench of the high court on January 23, 2017.Earlier, Chavan was forced to step down from the post of the Chief Minister in November 2010 after the allegations emerged against him.While the CBI named him as an accused in its FIR, in December 2013 the then Governor K Sankaranarayanan had refused permission to it to prosecute Chavan in the scam, leaving the central probe agency with no choice but to close the case against him.However, in March last year, the high court dismissed a plea made by Chavan, who is the sitting Lok Sabha MP from Nanded, seeking deletion of his name from the case, as the Governor had refused to grant sanction.Following this, the CBI re-approached the Governor seeking sanction, which was granted in February this year.
Prime Minister Narendra Modi on Sunday wished the nation on Christmas and said it was a day of service and compassion.
“I wish you all a Merry Christmas. It is the day when people should serve with compassion,” Modi said in his monthly radio addres ‘Mann Ki Baat’.
Modi said Jesus not only did serve the poor but he “has also appreciated the service done by poor, this is real empowerment”. Lucky draw schemes for digital payments
He announced lucky draw schemes for people who use digital payment methods including e-banking, mobile banking and e-wallets.
In his monthly radio address to the nation ‘Mann Ki Baat’, Modi on the occasion of Christmas said 15,000 people who use digital payment modes will be given a reward of Rs 1,000 each by a lucky draw. This amount will be transferred to their accounts.
File image of PM Narendra Modi. PTI
“This scheme will last for 100 days (from Sunday). As such lakhs of people will get crores of rupees,” Modi said.
The Prime Minister said there will be one big draw every week with winning price in lakhs.
“On the occasion of Ambedkar Jayanti — April 14 2017 — we will be conducting a bumper draw in which the winning price will be in crores.”
Thanks people for enduring demonetisation ‘pain’
Modi thanked people for enduring the “pain” caused by the government’s November 8 decision to spike 500 and 1,000 rupee notes that has caused an unprecedented cash crunch across the country.
“I congratulate people for not only enduring pain but also for giving appropriate answers to those who were trying to mislead them,” Modi said in his monthly radio address to the nation ‘Mann Ki Baat’.
The Prime Minister said people faced hardships and inconvenience but “answered back those who publicly tried to mislead them”.
The move to recall 86 percent of the total currency in circulation was ostensibly aimed at to curb corruption and black money in the country.
However, it has led to people in large number queuing up to withdraw or deposit cash in overcrowded banks and ATMs.
Lauds India’s sportsmen, sportswomen
He also lauded the country’s sportsmen and sportswoman who have “made us proud”.
Modi praised the Indian cricket team for its performance in a recently concluded Test series against England. “It has been phenomenal this year, congratulate the team for beating England 4-0.”
He also congratulated the junior hockey team of India for winning the hockey World Cup. “After 15 years, our junior hockey team has won the world cup. I congratulate all the young players.”
“Our sportsmen and sportswomen have made us proud,” Modi said in his monthly radio address Mann Ki Baat.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>The Bharatiya Janata Party (BJP) has asked the Congress vice president Rahul Gandhi to stop threatening Prime Minister Narendra Modi and show respect for democracy and the people’s mandate.”Rahul Gandhi is the most affected by the announcement made on 8th November, as the Congress and corruption have a strong association, and this association is breaking away due to demonetization,” said BJP leader Shrikant Sharma.”Rahul Gandhi is fighting for his existence as where there is cash, there is commission, and where there is commission, there is Congress. So, Rahul Gandhi’s quivering is relevant.” he added.Accusing Rahul Gandhi of double standards, Sharma said that he speaks on corruption, but is himself out on bail on a corruption charge and shares the stage with a chief minister who is also involved in corruption.”The Prime Minister has started a initiative against the black money to resolve the current problems of the country and people of this country are standing like stone besides him. Rahul Gandhi seems distraught and, therefore, is making these baseless statements,” he said.Sharma warned that if Rahul continues in this vein, the Congress presence in parliament could dip further from the current 44 seats it has.
No leader in India and perhaps no other political figure in any modern democracy could have survived the demonetisation crisis for seven weeks as Narendra Modi has.
If one is looking for evidence of his talents as a mass leader, it has been on display in this entire period. Let us look at it and appreciate it, because we are in the presence of a true master.
We have a few clues that the currency exchange crisis may not have been fully anticipated y the government. The first clue is Modi’s initial announcement where he made some predictions on a return to normalcy that were incorrect. The second is that he continued on a scheduled visit to Japan, at the time when the extent to which the note shortage would affect the economy was just being realised. By the time he returned from Japan it was clear that the queues were not going to disappear quickly.
His initial announcement was so powerful and energetic that it carried popular opinion. The media was fully on his side and a nervous Congress lacking in confidence also announced support for the move. Only two grassroots leaders, Mamata Banerjee and Arvind Kejriwal, recognised the danger and opposed it. Modi was in fact able to recruit large parts of the population on his side, probably including millions who did not vote for him, but who did not mind the inconvenience because they anticipated major change.
File image of Narendra Modi. AP
It is difficult to imagine the Manmohan Singh government producing this kind of euphoria in either the media or the middle class urban population if it had chosen to demonetise. The reaction would likely have been the opposite: resentment at being made to go through the trouble. And if it had carried on for seven weeks there would have been extreme anger.
Perhaps that anger is building now when it is clear that the disturbance is going to stay for months, but for Modi to have sustained it even for this length of time is remarkable.
The second demonstration of his talent was how quickly he grasped that the negative consequence of the policy was bigger than anticipated. Immediately on his return from Japan he made a couple of speeches in which he did two things. First he said to Indians that he meant well and that he had sacrificed his family life for his mission. The uncharacteristically emotional moment of that speech, when he briefly broke down, may also have been the moment when he acknowledged to himself that the issue was out of hand. Second, he said that normalcy would not return before 50 days. With this second move, he bought himself time and space to recalibrate his strategy. Once again, he got the media on his side and the discourse over the immediate problems that people were facing was diverted.
Now Modi could have waited for things to settle on their own, but he chose instead to voluntarily offer a time-frame before being pressed on it by the Opposition.
It is this comment on 50 days of inconvenience that allowed him the freedom to think of how to re-position demonetisation. As some publications have noted, there was no reference to a digital economy in his initial announcement, which was limited to black money, counterfeit currency amd terrorism. It is after his return from Japan and those speeches that suddenly the discourse shifted and it shifted because of Modi’s talent and credibility. One can picture him thinking about it alone. The opposition said this was a shifting of goalposts, but they should understand that this is not a university debate. So long as Modi can convince large parts of the population that the policy is good and the inconvenience will ultimately be beneficial, he will continue to do so. The specific benefits of the policy are unimportant to politics.
Proof of this appeared when the Bharatiya Janata Party continued its electoral successes across India even a month after demonetisation, including in Punjab where it is in power and suffering anti-incumbency. There is actually no opposition to Modi at the moment and he is still in full control of the narrative, which is astonishing because it has affected every single Indian negatively.
The Congress had the opportunity to exploit mass inconvenience but it has so far been unable to.
Many people are hesistant to publicly voice their dislike of demonetisation because they are afraid that they will be abused.
No other Indian leader, and few politicians in democratic politics anywhere could have achieved what Modi has since 8 November. Perhaps this will change in 2017 when the medium term effects of demonetisation are on display in the second salary cycle after 8 November.
For now, it must be acknowledged that so far, the prime minister has shown that he is where he is not because of luck but pure talent at bringing public opinion to his side and keeping it there.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Around 50 days after he climbed a 100-ft high mobile tower near Punjab Chief Minister, Prakash Singh Badal’s residence in Chandigarh to demand a government job, Deepak Kumar, 35, an elementary school teacher from Fazilka in Punjab finally called off his protest and got down from the tower after he was given the appointment letter on Saturday.Kumar, 35, had climbed the tower in Sector 3, Chandigarh on November 3, along with another teacher, Rakesh, 31, from Gurdaspur and had been atop the tower ever since. Both the teachers had passed the Teachers Eligibility Test (TET) conducted by the state government to fill posts of elementary teachers for Class 1 to 5, but were not shortlisted for the jobs.Over 300 such teachers under the banner and ETT Pass Unemployed Teachers Union had been protesting in various parts of Punjab, including Bathinda and Jalalabad demanding jobs. However, the government asserted that TET was an eligibility test and did not guarantee a job. The posts which are left vacant are those of reserved categories including that of ex-servicemen quota and freedom fighters, but the protesting teachers demanded that the seats be de-reserved and they should be hired.As others continued the sit-in protest on ground, Kumar sustained on a minimal supply of food and water on the tower, and bore the winter chill as temperatures dropped during the night. He sat determined, not to get down until he was given the appointment letter. Various attempts by the police to convince him to get down had failed to deter him.On Saturday morning, when the government issued a joining letter, he agreed to climb down.”Deepak has called off the protest after he was given an appointment letter by the government. But, there has been no decision on the other 360 teachers who are still waiting for jobs. We have decided to continue our sit-in protest till our demands are met,” said ETT Union President, Amarjit Singh Kamboj from Bathinda. The teachers have been demanding that all the candidates who had qualified the TET during 2011-16 be given government jobs.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Prime Minister Narendra Modi on Saturday said that after the deadline of 50 days (from November 8 when demonetization was announced), inconvenience faced by honest people would mitigate and trouble would increase for the dishonest.The war against black money will not be called off until victory is achieved, he said. But he offered the dishonest a chance. “There is still some time left and they can still bring themselves into the mainstream of honest ones,” he said. Though the government does not want to destroy such people, it cannot spare them if they loot the common man’s money, Modi said. The Prime Minister was addressing a public rally at the MMRDA ground here after laying the foundation stone for the Arabian sea memorial of Chhatrapati Shivaji Maharaj. The recent local body elections in Maharashtra, where BJP has emerged as the largest party, prove that people are with the demonetization drive, he said. He said 125 crore people backed his decision. “There are very powerful people, who have enjoyed many benefits in the last seven decades, trying to defeat the demonetization drive. But the country cannot be defeated by such people,” he said.“Some people thought that they can escape by convincing bankers, but those who tried this route not only endangered their future but also that of the bankers,” he said. These people will have to ultimately bow down before 125 crore Indians who would not tolerate dishonesty anymore, he said. He said that 125 crore Indians have now become the baton holders of the war against black money and that is the reason why this war will not stop, he said.
The key takeaway from Prime Minister Narendra Modi’s speech at the National Institute of Securities Markets (NISM) campus near Mumbai on Saturday is his reiteration that the NDA-government doesn’t think that demonetisation is an accident.
The government is willing to pursue it till the end irrespective of the difficulties it may face in dealing with the after effects of this massively disruptive exercise and what the critics say. “Let me make one thing very clear: This Government will continue to follow sound and prudent economic policies, to ensure that India has a bright future in the long run. We will not take decisions for short term political point scoring. We will not shy away from taking difficult decisions, if those decisions are in the interest of the country. Demonetisation is an example. It has short-term pain, but will bring long-term gain,” Modi said at the inaugratin of the NISM campus.
Narendra Modi. PTI
This is a clear message to his political opponents and critics that the government wouldn’t go back from what it has begun on 8 November. PM Modi’s comment comes not long after severe criticism on demonetisation from known global names such as Steve Forbes called it an “immoral and sickening move” and “a massive theft of people’s property” and Wall Street Journal, which dubbed demonetisation “India’s bizarre war on cash” and essentially cautioned the government that it shouldn’t force cashless transactions on its people.
Modi has faced criticism at home as well. But, his speech on Saturday tells us that the prime minister isn’t perturbed with any of these. He is willing to risk the after effects of the note ban including a severe cash crunch that is persisting even after a month and half of the currency ban, negative impacts on the economy and reported job losses in the informal sector, as well as signs of public patience diminishing faster than in the initial days.
As the prime minister said in his speech, the government is willing to face the risks and is betting big on the long-term gains of the demonetisation. The prime minister’s statement isn’t difficult to understand given that he has invested too much of personal and political goodwill in the decision to pull out 86 percent of currency in one go on 8 November. There is no going back from this decision since it can become the admission of a political defeat.
Since 8 November, the note ban has been presented as a bold, personal political move to the public by the prime minister rather than as an economic reform originating from the government or the central bank, Reserve Bank of India. But, the other side of this is that by not admitting the serious flaws in the implementation of a well-intentioned move and harping on a 50-day deadline to end the pain of demonetisation, the PM is also running a risk of inviting more public anger should he fails to keep his promise of 50-days and keep ignoring the ground realities.
The fact is that there is still considerable pain on the ground which might last very well beyond the “short-term”. No one, including RBI, seems to have a clear idea of how long will the cash crunch last. Till now, the RBI has managed to infuse only a fraction of the Rs 15.4 lakh crore currency demonetised by the scheme. It might take a few more months before things turn normal. As Indiaspend points out in this article, Modi’s 50-days deadline is likely to fail. Here, instead of repeating that the pain is only for short-term, the prime minister would have done well if he admitted that the impact of currency ban will probably last longer than the government had initially anticipated, thus giving a realistic assessment of the current situation. Such a move would have helped him gain more public support.
In his speech Modi also touched upon some crucial, but long-discussed, issues concerning capital market reforms such as deepening the municipal corporate market, routing long-term funds from the bond market to fund long-gestation infrastructure projects and ways to translate the growth in capital markets to gains for rural India. The remark on deepening the municipal bond markets should be seen in the backdrop of government’s smart city programme, which requires large revenue sources one of which is tapping the municipal bond market.
Modi also hinted at tweaking laws concerning gains from capital market gains. “Those who profit from financial markets must make a fair contribution to nation-building through taxes. For various reasons, the contribution of tax from those who make money on the markets has been low. To some extent, it may be due to illegal activities and fraud. To stop this, SEBI has to be extremely vigilant. To some extent, the low contribution of taxes may also be due to the structure of our tax laws. Low or zero tax rate is given to certain types of financial income.”
Similarly, the mention on reinventing the derivative product segment to benefit farmers is a message to the market regulator, SEBI to think of ways of working on new products. “People say that derivatives can be used by farmers for reducing their risks. But in practice, hardly any farmer in India uses derivatives. That is the fact. Unless and until we make the commodity markets directly useful to farmers, they are just a costly ornament in our economy, not a useful tool…SEBI should work for closer linkages between spot markets like e-NAM and derivatives markets to benefit farmers,” Modi said.
The prime minister yet again made it clear his idea of reforms when he said that his “aim is to make India a developed country in one generation”. In other words, what this means is that his government believes in massive disruptions to bring about large changes in the country rather than following the method of gradual transformation. It tells us that one should expect more big bang announcements in the remaining two and half years of his tenure. For sure, demonetisation wouldn’t be the last surprise.
<!– /11440465/Dna_Article_Middle_300x250_BTF –> The Income Tax department said it has detected undisclosed income of Rs 47.74 crore after surveys were conducted at half-a-dozen bullion traders and jewellers in the city following surge in their sales post demonetization. Officials said the operations were carried out after the investigation wing of the department here got inputs that these traders dealing in the yellow metal and precious stones recorded sales much higher than that in the same period last year.”Apart from receipts in RTGS (funds transfer system through bank) in their (traders) accounts, there were huge cash deposits. On verification of cash sales, it was found that more of these transactions were done in October-November this year and all cash transactions were kept below the Rs 2 lakh threshold and without any details regarding the customer to whom the sale was made.”We suspect this was apparently done to avoid Tax Deducted at Source (TDS) and mandatory quoting of purchasers’ PAN. Huge cash deposits in bank accounts after demonetisation have been noticed in these cases. It is found that some of these jewellers have back-dated the bills and even paid VAT to to give the transactions a colour of genuineness,” they said.Officials added in some cases, it was found that the sales had been “suppressed” previous years too. “Further investigations are on to verify the genuineness of RTGS received in their account. Some of the jewellers are found to have not filed the returns of income also for the past several years. The surveys have resulted in detection of undisclosed income of Rs 47.74 crore,” they said. In an another case in Anekal village of the city, the taxman seized a total cash of Rs 1.15 crore, with Rs 1.07 crore in new notes, from a transporter who was indulging in illegal conversion of old currency.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>DMK patriarch M Karunanidhi was discharged from a private hospital here after a week-long treatment for breathing difficulty caused by throat and lung infections, with doctors advising him complete rest.The course of antibiotics for the 93-year-old DMK chief has been completed and he has “recovered well” from breathing difficulty due to throat and lung infections, Executive Director of Kauvery Hospital Dr S Aravindan said.Karunanidhi was hospitalised on the night of December 15. The next day, he underwent tracheostomy to optimise breathing and the hospital had declared him as being stable.Dr Aravindan, in a statement today, said, “Doctors have advised him complete rest and restriction of visitors.” He said Karunanidhi needs tracheostomy tube for a few more weeks and added that medical and nursing care would continue to be provided at his home by the hospital.The DMK patriarch was given a warm welcome by senior party leaders and cadres when he arrived at his Gopalapuram residence. Earlier soon after his hospitalisation, there was a marked improvement in his condition and he even watched Rajinikanth blockbuster “Batcha” on his laptop.Congress vice-president Rahul Gandhi, former Union Minister P Chidambaram, AIADMK leaders M Thambidurai and D Jayakumar, among several other leaders, had visited him during his hospitalisation.Karunanidhi was in the same hospital between December 1 and 7 for drug allergy treatment.On October 25, DMK had announced that Karunanidhi was suffering from allergy “caused by a medicine he has been using” and advised rest by doctors. Though active for his age, the veteran DMK leader is not seen regularly in public and has been reacting to key issues and developments through his statements.The DMK general council meet scheduled for December 20, where party treasurer M K Stalin was expected to be declared working president, had to be cancelled in view of Karunanidhi’s hospitalisation.The DMK chief also had to skip campaigning for the November 19 polls to three constituencies in Tamil Nadu and instead appealed to voters through a statement to vote for his party.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>The Centre on Friday reviewed the situation in Manipur in the wake of the crippling economic blockade of a highway, with Union Minister Kiren Rijiju asking the state government to end the “worrisome” conditions that have triggered a “humanitarian crisis”.At a high level meeting attended by the Union Minister of State for Home Rijiju, Chief Minister O Ibobi Singh and senior officials of the central and Manipur governments, the situation in the state was discussed threadbare.Rijiju, who is on a day-long trip to Manipur as a central emissary, stressed that the Manipur government must discharge is “constitutional duties” by ending the blockade and bring back normalcy in state.The blockade on National Highway 2 by United Naga Council (UNC) has been continuing since November 1 crippling normal life in the landlocked state.The UNC has been protesting against the creation of seven new districts in the state.”This is a humanitarian crisis. We want that the Manipur government end the blockade as early as possible. Whatever assistance from the central government is required, we will give,” Rijiju said.”There is a constitutional duty of the state government to bring back normalcy and they should ensure that there is no blockade along the highway,” he told PTI.The Minister of State for Home Affairs, said the ground situation in Manipur continues to be worrisome and the Central government wants that law and order prevail in the state.”I will talk to the state government and will try to find out a solution,” he said.Rijiju said the prices of essential commodities have gone up due to the economic blockade and people have been suffering a lot.So we want the problem to resolves as early as possible, he added.Home Minister Rajnath Singh had on Thursday told Manipur Chief Minister that there has been extremely distressing situation caused by the continuous blockade of National Highway-2, which has caused an acute shortage of essential and other goods in Manipur and breakdown of law and order.The landlocked state has been experiencing severe hardship in supply of essential items since November 1 after United Naga Council (UNC) imposed an indefinite economic blockade on the two national highways that serve as lifeline for the state.
WASHINGTON U.S. consumer spending increased modestly in November as household incomes failed to rise for the first time in nine months, suggesting the economy slowed in the fourth quarter after growing briskly in the prior period.But the economy remains on solid footing, with other data on Thursday showing new orders for U.S.-manufactured capital goods rising last month amid demand for machinery and primary metals, indicating that some of the oil-related drag on business spending was fading.And while the number of Americans applying for unemployment aid hit a six-month high last week, it remained below a level that is associated with labor market strength. The Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.2 percent after increasing 0.4 percent in October. When adjusted for inflation, consumer spending edged up 0.1 percent last month after a similar gain in October. But the moderation in consumer spending is likely to be temporary against the backdrop of a labor market that is near full employment and consumer confidence that is at cycle highs.Still, last month’s modest gain in consumption, coming on the heels of weak industrial production and housing starts in November, implied gross domestic product growth estimates for the fourth quarter, currently around a 2.6 percent rate, could be trimmed.The Commerce Department said in another report on Thursday that the economy grew at a 3.5 percent annual rate in the third quarter instead of the previously reported 3.2 percent pace. That was the strongest growth rate since the third quarter of 2014 and followed the second quarter’s anemic 1.4 percent pace. The upward revision reflected stronger growth in consumer spending, business investment in structures and intellectual property products than previously estimated, underscoring the economy’s solid fundamentals, which contributed to the Federal Reserve raising interest rates last week.The U.S. central bank lifted its benchmark overnight interest rate by 25 basis points to a range of 0.50 percent to 0.75 percent, also encouraged by a sturdy labor market. The Fed forecast three rate hikes in 2017.The dollar was trading lower against a basket of currencies. U.S. government bonds fell as did stocks on Wall Street.
Slower consumer spending last month held back inflation. The personal consumption expenditures (PCE) price index, excluding food and energy, was unchanged after edging up 0.1 percent inOctober. That lowered the year-on-year increase in the core PCE price index to 1.6 percent, the smallest gain since July. The core PCE index increased 1.8 percent in October, which was the biggest gain since July 2014. The core PCE is the Federal Reserve’s preferred inflation measure and is running below its 2 percent target.INCOME FLAT Consumer spending last month was restrained by a 0.6 percent drop in purchases of long-lasting manufactured goods such as automobiles. Spending on services rose 0.3 percent.
Personal income was flat last month after increasing0.5 percent in October. Wages and salaries fell 0.1 percent. With consumer spending outpacing incomes, savings fell to $780.9 billion, the lowest level since May 2015, from $809.1 billion in October. While consumer spending might be cooling, there are signs that business investment is perking up after a prolonged slump.In a third report, the Commerce Department said non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, increased 0.9 percent after gaining 0.2 percent in October. A collapse in oil prices last year, together with a surge in the dollar, pressured manufacturing. Much of the impact has been through weak business spending on equipment, which has contracted for four consecutive quarters.
With oil prices hovering above $50 per barrel, manufacturing, which accounts for 12 percent of the U.S. economy, is starting to show signs of life. Gas and oil well drilling has risen over the last several months.Economists expect business spending to rebound in 2017, driven in part by president-elect Donald Trump’s perceived business-friendly policies.The incoming Trump administration has promised to slash taxes, remove some regulations and increase infrastructure spending. But manufacturing gains are likely to be limited by renewed dollar strength in the wake of Trump’s victory.Since Trump’s Nov.8 election victory, the dollar has increased 4.4 percent against the currencies of the United States’ main trading partner on concerns that the business mogul’s policy agenda could fan inflation.Last month, shipments of core capital goods rose 0.2 percent after falling 0.3 percent in October. Core capital goods shipments are used to calculate equipment spending in thegovernment’s GDP measurement.A third report from the Labor Department showed initial claims for state unemployment benefits increased 21,000 to a seasonally adjusted 275,000 for the week ended Dec. 17, the highest since June.Despite the increase, it was the 94th straight week that claims were below 300,000, a threshold associated with a healthy labor market. That is the longest stretch since 1970, when the labor market was much smaller. Claims tend to be volatile around this time of the year because of different timings of the various holidays. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, increased 6,000 to 263,750 last week. (Reporting by Lucia Mutikani; Editing by Andrea Ricci)
This story has not been edited by Firstpost staff and is generated by auto-feed.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Damage to India’s economic growth is likely to be bigger than the RBI’s estimates, as there could be a sharper slowdown in the near-term as cash shortage is likely to extend into the first quarter of next year, says a Nomura report.”We concur with the RBI’s view that the impact of demonetization is likely to be transitory. However, with the cash shortage spilling over into Q1 2017, our leading indicators are pointing to a sharper slowdown in near-term growth,” the Japanese financial services major said in a research note.Nomura further said, “As such, we expect the growth damage to be larger than the RBI’s estimates”.The report also said November’s CPI readings suggest that demonetization contributed 25-30 bps to the fall in headline CPI inflation via lower perishable item prices, slightly more than the RBI’s estimate of 10-15 bps, and most core inflation measures eased by 20 bps in November.”In this backdrop, and barring any major global disruption, we believe growth and inflation readings will be supportive of policy easing,” it said.Nomura expects the RBI to cut the repo rate by 25 bps to 6 per cent in February and stay on hold thereafter, once the transitory effects start to fade.On December 7, RBI kept interest rates unchanged despite calls for lowering it while it slashed the economic growth projection by half a per cent to 7.1 in the first policy review post demonetization.The next monetary policy meet is on February 8.
It has been more than a month since the Narendra Modi government decided to demonetise high-denomination notes of Rs 500 and Rs 1,000 and even though queues outside banks and ATMs might have shortened from how they used to be, income tax officials have been busy with several high-profile seizures of cash and gold. Some of the seizures reflect poorly on the government — in a few instances new currency notes were seized as well which in turn raises questions about the BJP government’s decision.
Since 8 November, the Income Tax department has detected Over Rs 3,185 crore of undisclosed income, while seizing Rs 86 crore worth of new notes, as part of its country-wide operations against black money hoarders. Official sources said the taxman carried out a total of 677 search, survey and enquiry operations under the provisions of the Income Tax Act since the note ban was declared on 8 November, even as the department has issued over 3,100 notices to various entities on charges of tax evasion and hawala-like dealings.
The I-T department, they said, has also seized cash and jewellery worth over Rs 428 crore during the same period.
Representational image. PTI
The agency has also referred over 220 cases to its sister agencies like the CBI and the Enforcement Directorate (ED) to probe other financial crimes like money laundering, disproportionate assets and corruption as part of their legal mandate.
Here are some of the biggest raids conducted by tax sleuths since the high-profile cleanup of the Indian economy began:
Kolkata businessman raided
Kolkata businessman Parasmal Lodha was arrested by the Enforcement Directorate for allegedly converting over Rs 25 crore in demonetised currency notes into new ones, reports News18. According to the report, Lodha has links with industrialist J Shekhar Reddy, who was arrested along with his associate K Srinivasulu on Wednesday.
Chennai airport raid
In the latest development, the Directorate of Revenue Intelligence busted a hawala gang and seized Rs 1.34 Crore in Rs 2000 notes & $ 7000 from five persons in early morning hours, near Chennai airport, reported ANI.
Tamil Nadu chief secretary, his son under taxmen scanner
The house and office of Tamil Nadu chief secretary P Rama Mohana Rao was on Wednesday searched by Income Tax officials who claimed to have recovered Rs 30 lakh cash in new notes and five kgs of gold besides getting “disclosure” about Rs five crore of unaccounted income.
On Thursday, tax sleuths raided his son, Vivek Rao’s office in Chennai. Sources told NDTV that the taxmen are probing the source of funding for the six companies that Rao established in 2012.
Continuing raids in Chennai
On 20 November, taxmen raided the premises of a prominent engineering college after reports arose of the owner depositing Rs eight crore in unaccounted cash in the accounts of employees. IT officials later found that the amount was deposited in over 400 bank accounts.
According to TheIndian Express, on 8 December, the IT department busted a money exchange racket in the Tamil Nadu capital, seizing Rs 90 crore in cash, of which 70 crore were in new notes, along with 100 kgs of gold.
The Income Tax officials on Monday seized demonetised currency notes worth Rs 10 crore and a few kilogrammes of diamond and gold jewellery during a raid in the house and showroom of a jeweller in Chennai.
BJP leader arrested with new notes
On 6 December, the Special Task Force arrested former West Bengal BJP leader Mahesh Sharma, after Rs 33 Lakh in form of Rs 2,000 notes was confiscated from him.
New notes found in ‘secret chamber’
In a surprise raid at a hawala operator’s residence in Hubballi led to the Karnataka and Goa taxmen unearthing Rs 5.7 crore in new cash, The Times of India reported. The stash of new cash, interestingly, was found in a secret chamber in the bathroom.
Post note ban Rs 30 crore seized in Maharashtra excluding Mumbai
Post demonetisation of Rs 500 and Rs 1,000 notes, the Income Tax department seized about Rs 30 crore in cash, including Rs 12.32 crore in new bills, from Maharashtra, excluding Mumbai.
The cash was seized during 57 surveys and search operation carried out since the decommissioning of the old Rs 500 and Rs 1,000 notes, I-T department said in a release in Mumbai.
CBI raid at Hyderabad post offices
The CBI conducted surprise raids after the note ban. During one such search at the Himayatnagar Post office, the invetigation agency found Rs 40 lakh. The raid took place on reports of irregularites in phasing out of old currency notes.
Bahubali producer raided in Hyderabad
The IT department raided the residences and offices of the producers of the multi-lingual blockbuster Bahubali, Business Standard reported. Shobu Yarlagadda and Prasad Devineni, the two producers, were at the recieving end of the taxmen, as Rs 60 crore worth of new notes were found during the raids.
G Janardhan reddy under IT scanner
On 21 November, within days after G Janardhan Reddy’s daughter’s lavish wedding grabbed headlines for its splendour, Income Tax Department raided the mining baron’s offices in Bellari.
A team of five I-T Department officials raided the former BJP lawmaker’s Obulapuram Mining Company (OMC) offices.
NGO linked to Pakistan singer raided
On November 18, Delhi police and the IT department raided the offices of a NGO, Routes of Roots, run by the managers of eminent Pakistani singer Shafqat Amanat Ali Khan, after it recieved reports of illegal conversion of black money.
IT raids in Chandigarh college
The Enforcement Directorate on Monday seized Rs 50 lakh cash, including Rs 46.80 lakh in new notes, after raids at the premises of an educational institute’s owner. Acting on a tip-off, the ED sleuths swooped down on the premises of the owner of Swami Devi Dyal Group of Institutes in Chandigarh.
Over two crores seized from Meerut engineer
Cash worth more than Rs 2.67 crore in both old and new notes, and 30 kilograms of silver were seized from an engineer, working in the irrigation department, by the Income tax sleuths on Tuesday.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>The Army and police on Thursday cordoned off Hajin village of Bandipora, Jammu and Kashmir early this morning.They suspect the presence of terrorists in the area.Two terrorists and an Army jawan were killed earlier on November 25 in the ongoing encounter between terrorists and security forces in Bandipora.Since the surgical strike on terrorist launch pads in PoK on September 29, there have been a staggering 286 incidents of firing and shelling along the LoC and the International Border (IB) in Jammu and Kashmir by Pakistani troops, which have resulted in the death of 26 people, including 14 security personnel.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Congress leader Sajjan Kumar was granted anticipatory bail in a 1984 anti-Sikh riots case on Wednesday by a Delhi court which directed him to cooperate in the probe and not influence witnesses. Additional Session Judge Vikas Dhull, while granting relief to the former MP on a personal bond of Rs 1 lakh and a surety of the like amount, also ordered that he will not leave the country without the court’s permission.The court had reserved its order on Wednesday after hearing the arguments of counsel for both the parties in two cases filed against Kumar falling in the jurisdiction of Janakpuri and Vikaspuri police stations in West Delhi. The complaint in Janakpuri pertains to the killing of two Sikhs, Sohan Singh and his son-in-law Avtar Singh, on November 1, 1984 and in the other where a Sikh Gurcharan Singh was burnt on November 2, 1984 in the jurisdiction of Vikaspuri Police Station.As per the complaint, Gurcharan, who was half burnt, remained bed-ridden for 29 years. He died three years ago. Seeking anticipatory bail for Kumar, his counsel had argued that his name had appeared in this case after 32 years and the case was politically motivated.Opposing the plea, senior advocate HS Phoolka, appearing for the complainants, had argued that the allegations against Kumar were very serious and he was a very influential person. The prosecutor, appearing for SIT, had also said that Kumar was not cooperating in the investigation and his custodial interrogation was required. The court was told that Kumar was summoned twice by the Special Investigation Team (SIT) but he had appeared only once.
<!– /11440465/Dna_Article_Middle_300x250_BTF –> Rahul Gandhi alleged that Narendra Modi as Gujarat Chief Minister had taken money from Sahara and Birla groups and demanded an independent inquiry into it, a charge BJP rejected as an attempt to divert attention from the AgustaWestland probe in which the names of Congress leaders and the “family” were coming up. Addressing a rally here in the prime Minister’s home state, he alleged that in the I-T records there are notings of Sahara officials’ claims that they had paid 9 times to Modi between October, 2013 and February, 2014.Gandhi said the documents in this regard were with IT department which had raided the company when Modi was Gujarat Chief Minister.Similarly, as per documents with Income Tax department, the Birla group also paid Rs 12 crore to Modi when he was Chief Minister.Wondering as to why there has been no probe in the matter so far, Gandhi demanded an independent inquiry. Last week, Gandhi claimed that he had evidence of “personal corruption” of Prime Minister but he was being prevented from speaking in the Lok Sabha because it would cause an earthquake.Reacting to Gandhi’s allegations, Union minister Ravi Shankar Prasad said in New Delhi that the charges are “baseless, false, shameful and mala fide” and an attempt to divert attention from the AgustaWestland probe as names of Congress leaders and the “family” are coming up.Party spokesperson G V L Narasimha Rao said Gandhi was immature and was just indulging in bluff and bluster because people are not taking him seriously.”People of India have stopped taking him seriously. Rahul Gandhi is just bluff and bluster. There is no substance in what he says. He is just showing his and his party’s incompetence,” he said.Gandhi said he was raising the issue on behalf of the country which needs answers over the questions raised against the Prime Minister.”PM Modi takes bribes and then shamelessly foists Demonetisation on Indians under the garb of ‘fighting Black Money,” Congress tweeted after the rally quoting its Vice-President Rahul Gandhi.”Rahulji asks if Modiji received this money from Sahara or not? If this document is with Income Tax, will Modi now investigate it?,” tweeted party chief spokesperson Randeep Surjewala. He was quoted saying by ANI that according to these records, Rs 2.5 crore was given to PM Modi on 30 October 2013, Rs 5 crore on 12 November 2013, Rs 2.5 crore on 27 Nov 2013, and Rs 5 crore on 29 November 2013. Entries showed Rs 5cr given to PM Modi on 6 Dec ’13; Rs 5cr on 19 Dec ’13; Rs 5cr on 13 Jan ’14;Rs 5cr on 28 Jan ’14;Rs 5cr 22 Feb ’14.” NGO Common Cause had filed a PIL on the issue in the Supreme Court and a bench headed by CJI-designate Justice J S Khehar last week had refused to take up the matter saying there was no evidence but only allegations against the Prime Minister. The bench then asked lawyer Prashant Bhushan to provide evidence before it could decide on whether it could admit the petition.Gandhi alleged that the I-T records show Sahara officials’ claims of having paid Rs 40 crore to Modi on various dates between October, 2013 and February, 2014.”You (Modi) did not allow me to speak in Parliament. I did not know why you did not wanted to face me in the House. I tell you the reason. Any business entity keeps record of its transactions. On November 2014, Income Tax department conducted raids on Sahara, a very large corporate house,” he said.”During that raid, I-T department found some documents, which are on record. I want to share with you the contents of those documents. There were several entries in those documents, which I am reading out before you,” he said.He then alleged that another record suggests that Birla Group gave Rs 12 crore to ‘Gujarat Chief Minister’.”This record is with I-T department since last 2.5 years.I-T even recommended to conduct an inquiry in this issue. I want to ask you why no such inquiry was done? We want to know whether it is true that money was given to you nine times by Sahara?” Rahul asked.”You doubted the honesty of citizens, their hard-earned income, and made them stand in the queues. Now, on behalf of citizens, I am asking you whether the information is true or not. And if it is true, then when you will set up an inquiry,” said Gandhi. With inputs from PTI
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Swaraj India chief Yogendra Yadav told a bank on Tuesday that he “believed” in the assurance made by Prime Minister Narendra Modi and the RBI that demonetized currency could be deposited till December 30, when he deposited his old notes.Yadav said he had not deposited old currency notes because he was waiting for the rush to subside as the deadline for the same was December 30. After the circular was issued on Monday, his wife Madhulika Banerjee went to the UCO bank to deposit old currency notes. “I have made no cash deposit in my account since November 8. I see no reason to offer any special explanation for the same for making the deposit now. I normally like and wait for the queues to end. I was assured by the Prime Minister, the Finance Minister and the RBI that there was no need to rush to the banks and that I had till December 30 for making any deposit. I believed them,” Yadav said in his explanation to the bank.The Swaraj India President also posted this message on Twitter and Facebook which went viral. The government had said on Monday individuals can deposit over Rs 5,000 in old currency bills only once until December 30 and that too after explaining why it has not been done so far.After banning Rs 500 and Rs 1,000 notes on November 8, the government had initially allowed people to deposit the scrapped currency notes in bank accounts till December 30 and there was no limit to the amount that could be deposited. Yadav also lambasted the government and the RBI for regularly changing rules. “On November 12, the Finance Minister says that there is no need to rush as the deadline is December 30. On December 20, the RBI asks why did you take so much of time to deposit old notes. You need an explanation? Currency functions on trust. Such actions will only lead to erosion of trust in institutions,” he said.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Delhi High Court sought the response of Delhi government on Tuesday, on a plea filed by former youth Congress leader Sushil Sharma, who is undergoing life term in the 1995 sensational Tandoor murder case, seeking parole for a period of six months to take care of his ailing parents.Justice Vipin Sanghi issued notice to the government and directed it to respond by January 25 on Sharma’s plea in which he has also challenged the November 28 order of Delhi government rejecting his application for regular parole. In his application, Sharma has claimed that his plea for regular parole was rejected by the government on “false and fictitious” ground and the authorities did not appreciate the fact that he was eligible for grant of parole.”Respondent (state) has failed to appreciate that the petitioner (Sharma) has already undergone more than 20 years in custody and six months have already elapsed from the date of termination of the previous parole,” the application, filed through advocate Amit Sahni, said.Sharma has said that his parole application should have been allowed by the authorities “considering the health and age of his parents” as he is the only son to look after them and has never misused the concession of parole or furlough granted to him earlier.Sharma had shot his wife Naina Sahni with his licensed revolver on the night of July 2, 1995, taken her body to a restaurant, chopped it into pieces and tried to burn them in the restaurant’s oven, leading the case to be popularly called the ‘Tandoor murder case’. The Supreme Court had commuted to life imprisonment the death penalty awarded to Sharma by a trial court in 2003 and upheld by the High Court in 2007, saying the murder was the outcome of “strained personal relationship” and the convict was “not a confirmed criminal”.While reducing the sentence awarded to him, the apex court had said that “life sentence is for the whole of remaining life of Sharma subject to remission granted by the appropriate government under the Code of Criminal Procedure.”
New Delhi: Over Rs 3,185 crore of un-disclosed income has been detected while Rs 86 crore worth new notes have been seized by the Income Tax department as part of its country-wide operations against black money hoarders post the demonetisation of two high value currencies by the government.
Official sources said the taxman carried out a total of 677 search, survey and enquiry operations under the provisions of the Income Tax Act since the note ban was declared on 8 November, even as the department has issued over 3,100 notices to various entities on charges of tax evasion and hawala-like dealings.
Representational image. PTI
The I-T department, they said, has seized cash and jewellery worth over Rs 428 crore during the same period even as the new currency seized (majorly Rs 2000 notes) is valued at about Rs 86 crore.
“The total undisclosed income admitted or detected as part of this action, till 19 December, is more than Rs 3,185 crore,” they said.
The agency has also referred over 220 cases to its sister agencies like the CBI and the Enforcement Directorate (ED) to probe other financial crimes like money laundering, disproportionate assets and corruption as part of their legal mandate.
Officials said various tax offices in the country and it’s policy-making body Central Board of Direct Taxes (CBDT) are also coordinating with banks and their regulator RBI as part of these investigations, being carried out to check tax evasion and illegal profiteering leading to black money.
Meanwhile, the headquarters of these probe agencies have issued orders to all their field formations to deposit the new currency, being seized by their officials in operations, in bank accounts rather than keeping it in strong rooms.
“This way the new currency can come into circulation and help banks dispense it to the public,” they said.
The I-T department has also asked its field formations to coordinate with local police, also making huge cash and jewellery seizures, to understand the complete modus operandi of black money generation post demonetisation.
New Delhi: The United Naga Council (UNC) on Monday urged the Centre for imposition of President’s rule in Manipur where an economic blockade by the organisation snapped two highways connecting the state.
The demand was placed by the UNC before Union Home Minister Rajnath Singh when a delegation of the group met in New delhi.
“We appeal for imposing President’s rule in Manipur as the state government has failed completely on all fronts and law order has deteriorated. Creation of seven new districts is a ploy by the Manipur Chief Minister for electoral gains,” senior UNC leader Adani Mao said at a press conference in New Delhi.
Images from Sunday’s protest against the United Naga Council (UNC)’s indefinite economic blockade. Imphal East: Angry people had set on fire vehicles in Imphal East district but no casualties were reported .PTI
Mao, the former UNC president, who is at present looking after the affairs of the Council after the arrest of its senior leaders, alleged that Chief Minister Okram Ibobi Singh was trying “cheap tricks ahead of polls to hide the government’s incompetency”.
Claiming that violence has taken place in several areas of Manipur, Convener for Joint Naga Civil Societies, Lakpachui Siro, accused the Congress-led state government of disrupting peace by creating seven new districts for “electoral gains” ahead of the assembly elections next year.
“The state government is going to upgrade Sadar Hills and Jiribam regions to full-fledged districts without consulting the Nagas who inhabit the areas. Precious lands, which belong to them, are being snatched away and there are unrest in the state,” he said.
The UNC, which has imposed an economic blockade on NH-2 (Imphal-Dimapur) and NH 37 (Imphal-Jiribam) that serve as lifelines for the landlocked state, said Manipur Chief Minister Okram Ibobi Singh decided to create seven new districts “without consulting” the Nagas who, they said, are the most important stakeholders.
The UNC has demanded immediate release of its President Gaidon Kamei and Publicity Secretary Stephen lamkang who they said have been arrested “arbitrarily”.
The UNC has accused Meiteis of creating unrest in the state by killing innocent people, saying Meiteis are not only torching vehicles, burning down houses and looting Nagas, but also attacking places of worships in the state.
A tripartite talk involving a delegation each from the Manipur government, the UNC and the Ministry of Home Affairs was scheduled to be held in Delhi on November 15 on the current situation of the state but the state government did not send anyone to attend that meeting, Siro said.
In a gazette notification issued on 9 December, the state government announced the creation of seven new districts for administrative convenience, taking the total number of districts in the state to 16.
The decision has sharply divided the state’s three main communities which are Meiteis, Nagas and Kukis. Though Meitei and Kuki groups have welcomed the move, the UNC has been protesting against it.
The UNC claim that the decision would bifurcate ancestral lands of Nagas in Manipur.
The Chief Minister said the move was aimed at addressing a long-standing demand of the majority Meitei community and the minority Kukis.
The ongoing economic blockade by UNC launched on 1 November against the state government’s proposed move to create the new districts of Jiribam and Sadar Hills has resulted in black marketing of essential goods.
Out of the nine districts of Manipur, four districts — Imphal East, Imphal West, Thoubal and Bishenpur — are valley districts, and the five rest — Ukhrul, Senapati, Tamenglong, Chandel and Churachandpur — are hill districts.
The five hill districts are tribal districts. Valley districts are smaller with a high density of population but hill districts are sparsely populated.
On Monday, the situation in Manipur remained tense with violence spreading to Senapati district where miscreants torched two vehicles even as the Chief Minister appealed for peace among different ethnic groups of the state.
Indefinite curfew continues to remain in force in Imphal East district where mobile data services were suspended since Sunday to prevent spread of rumours. This will be in force till December 25.
<!– /11440465/Dna_Article_Middle_300x250_BTF –>Some of the harsher critics of PM Modi and the BJP tend to claim that neither of them have ever read a book. It’s an elitist argument made either by eminent historians or disillusioned veterans who can’t get used to change of guards and appears untrue based on the events proceeding the November 8 announcement because someone out there seems to be a huge Kafka fan.The sheer number of rule changes since November 8 has left all of us feeling a little like the bank cashier Josef K, the protagonist of The Trial, who was unexpectedly arrested by unidentified agents for an unspecified crime and then underwent a trial without knowing his crime. Or maybe sitting somewhere in a dark corner, cashier Josef K’s real-life counterpart is just messing with the rest of us to right the wrongs he faced in a fictional world.So far, the sheer number of rule changes and announcements from the institutions involved in demonetization – the RBI, Finance Ministry and PMO – has made us wonder whether they really had a plan in place. The only reason, this hasn’t descended into complete chaos is the charisma of a Prime Minister who the people of this nation trust to do the right thing. But that doesn’t mean it hasn’t become exasperating. The latest rule change in the great demonetization game (at the time of writing) came in the form of a cryptic circular from the Reserve Bank of India (RBI) on December 19 stated that we’d only be given one opportunity to deposit amounts greater than Rs 5000 before December 30. In the RBI’s own words: “The credit in such cases shall be afforded only after questioning tenderer, on record, in the presence of at least two officials of the bank, as to why this could not be deposited earlier and receiving a satisfactory explanation. The explanation should be kept on record to facilitate an audit trail at a later stage.” In a stroke of one press release, amount under scrutiny was brought down from a staggering Rs 2.5 lakh to a paltry Rs 5000. No matter which way you put it, this sounds a lot like having to explain to two faceless bank officials why one didn’t deposit money before December 30 even though we’d been clearly told we had all the time in the world to deposit our notes. The PM in his November 8 address had clearly stated: “Persons holding old notes of 500 or 1,000 rupees can deposit these notes in their bank or post office accounts from 10th November till close of banking hours on 30th December 2016 without any limit. Thus, you will have 50 days to deposit your notes and there is no need for panic.”In the same vein, Finance Minister Arun Jaitley had said on November 12: “Don’t rush to the banks right now, for exchanging or withdrawing old Rs 500 and Rs 1000 notes as there are massive crowds. Wait for a few days as the scheme is open till December 30.”That we must ‘explain’ our own money to faceless officials is quite worrisome and in some ways, is reminiscent of an era of licence raj when a morally ambiguous official’s arbitrary judgement could mean the difference between getting work done and going home empty-handed. And given the spate of adventurism of bank officials and babus, who’ve proven to be the weakest link in the demonetization drive, what’s to say a person can’t deposit their money or hide their ‘audit trail’ after giving a little under the table.As if that wasn’t enough confusion, Arun Jaitley’s press conference later that night showed that the FinMin and RBI have all the communication skills of a newly married couple as he said: “If they go and deposit with bank any amount of currency no questions are going to be asked to them and therefore the 5000 rupee limit does not apply to them if they go and deposit it once. “But if they are going to go everyday and deposit some currency, same person, that gives rise to suspicion that where is he acquiring this currency from. In that event a person may have something to worry about. Therefore everyone is advised whatever old currency you have please go and deposit it now,” he said. And since there is no scope now for earning any old currency because all exemptions have been waived, it makes sense to go deposit all the holding in one go, Jaitley said. “This is the objective of the order passed today.”Law and IT minister RS Prasad went on to cause further confusion when he said: “They (RBI) have issued something, the government will come with structured response on that.” And this wasn’t just talk as a colleague realised as she had to explain why she had Rs 6,000 to 10 different people. It really leaves you wondering what’s next. Show proof that one has sung the nation anthem with gusto at a movie theatre before depositing the money? Prove that one has shared at least five Facebook posts praising the Indian Army?Politics and policy implementation is about perception and even though the intentions behind demonetization are well-meaning, the implementation has left us all bewildered. In some ways, PM Modi’s November 8 speech now feels a lot like Neo’s address to the machines at the end of The Matrix where he tells them: “You’re afraid of change. I don’t know the future. I didn’t come here to tell you how this is going to end. I came here to tell you how it’s going to begin.” It seems even the institutions involved in demonetization only knew how it was going to begin, and have absolutely no clue how this is going to end.
