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Demonetization: Ruling LDF in Kerala to organize protest against currency ban

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The abrupt demonetization move by the Modi government on November 08 ostensibly to track black and fake money in circulation without any proper plan to save the common people has made the common people go mad. While making this important announcement the Modi government obviously refused to take both people and the Parliament into confidence, thereby causing additional existential worries to common people.

Parliament is turmoil over the issue but neither PM Modi o not the ruling BJP is worried about the negative consequences of the seemingly ill-fated move.

The ruling CPM-led LDF in India’s Kerala state will organize a ‘human chain’ across the state on 29 December as part of its plans to intensify protests against hardships faced by people due to the strange demonetization scheme of the Modi’s BJP government. The protest is meant to force the Modi government to withdraw the currency ban announced on 8 November and compensate the people for their loss of revenues and suffering following the demonetization announcement in midnight by PM Narendra Modi.

The ‘human chain’ would be formed from northern district Kasargod to state capital in the south, Thiruvananthapuram, LDF convener Vaikom Viswan said.”Not only party workers and sympathizers but everybody who share the same sentiments on the issue can participate in the human-chain protest,” he said.

Before organizing the ‘human chain’, the front would conduct conventions in all panchayats across the state on 20 and 22 December to create awareness among people about the drawbacks of abrupt withdrawing high denomination notes. Party volunteers would also conduct house visits at the booth level on 27 and 28 December in this regard. Alleging that only corporates have benefited from the demonetization, Viswan said the decision to withdraw currency was taken by the Centre with “political motives.”

CPM party held the PM Modi “singularly responsible” for the “mess” in the economy due to demonetization and it has renewed its contempt notice against him for ignoring Parliament and continuously making policy statements outside Parliament and “running away” from a debate in the House.

Referring to Modi’s 8 November demonetization announcement, CPM leader Sitaram Yechury MP said, “The Prime Minister is singularly responsible for the entire mess in our economy and the harm it caused to common people because it was his announcement, as his personal decision and not that of the Union Cabinet. Let him be accountable to the House. Why is he running away from Parliament?” Observing that Modi was not present in Rajya Sabha when questions on the PMO were listed to be answered, he said, “The Prime Minister avoids coming to the House, but continuously makes policy statements outside in public speeches. He is continuously violating parliamentary norms and practices.” Parliamentary democracy is derailed.

Yechury added: “Even today, there was clear violation as the waiver of service tax on credit and debit card transactions was made outside Parliament. No tax proposal can be made anywhere else but in Parliament,” Yechury said, adding that the Consolidated Fund of India “will now get less service tax receipts because of the Prime Minister’s proposal”. “That is why it is contempt of Parliament. It is completely against the norms and traditions of Parliament. I have renewed my contempt notice today and urged the Upper House (Rajya Sabha) Chairman Hamid Ansari to consider it and give his ruling. A meeting of the Privileges Committee has been called,” he told a press conference in New Delhi.

Referring to Finance Minister Arun Jaitley’s statement that there was no rule to make the PM sit through any debate in Parliament, the CPM General Secretary said there are precedents when the then Prime Minister Manmohan Singh sat through two debates on the 2G spectrum allocation scam and the coal scam and replied to it.

“But here this Prime Minister is running away from debate,” he alleged. He said the demand for a Joint Parliamentary Committee to go into “all aspects” of effects of demonetization including “the deaths of over 100 people”, the “harassment” caused to the public and “several” BJP leaders allegedly being caught with large amounts of cash, has been supported by several major Opposition parties in Parliament.

The CPM leader said the demonetization move, according to Modi, had the objectives of fighting blackmoney, corruption and counterfeit. However, now the Reserve Bank of India says 82 per cent of the value of currency notes withdrawn have come back to the banking system, totaling about Rs 11.86 lakh crore and the old notes can be exchanged till 30 December. “At this rate, more notes than the value of counterfeit currency have been deposited and become legal in the banking system. So the PM has successfully converted black money into white and legalized counterfeit currency. None of his objectives have been achieved,” Yechury said, adding it “reveals a deliberate attempt to legalize counterfeit money and convert black money into white”.

Referring to French queen Marie Antoinette’s infamous quote ‘if you don’t have bread, have cake’, he said the PM Modi has become “Modi Antoinette as he is saying ‘if you don’t have paper money, use plastic money'” when 98 per cent of Indian economy is cash economy. Even in the USA which has the reach of banking system and internet network is vast, 46 per cent of the economy runs on cash, he said, adding Modi has been “talking of a cashless economy and probably living in something like a fool’s paradise”.

Meanwhile, many cash lords with huge sum of unaccounted money and gold reserves have been booed across the nation, though not everyone fraud is targeted by the government. A lot of crores of cash and gold have been taken away by the officals from the famous Reddy gang of Andhra Pradesh/Telengana in Chennai with strong political links and patronage. The Central Bureau of Investigation (CBI) has arrested a senior special assistant of the Reserve Bank of India in Bengaluru for alleged involvement in a currency exchange racket, Media reports said nine men were arrested in connection with alleged exchange of Rs 1.50 crore worth of banned currency notes.

The government had on 24 November stopped over-the-counter exchange of old currency notes at bank counters, but continues the facility at RBI windows until 30 December. There has been suspicion that old notes are being exchanged at a premium, helping the black money holders to whiten their ill-gotten wealth. The rich people use the poor for exchanging their black money with white ones from banks   by paying them some money. A report in The Times of India said the arrested RBI official and others were exchanging the notes at a 15-30 percent commission for exchanging the notes. While arresting some, however, the government seems to let others to continue to enjoy the exchange business, increasing their illegal wealth.

The Bangalore incident is another proof that illegal exchange of old notes is rampant despite the government and its investigative agencies keeping a hawk’s eye on all such activities after the demonetization of Rs 500 and Rs 1,000 notes on 8 November. A report in The Economic Times , however, said the premium for such illegal exchange of old notes have fallen drastically now and the money changers are even ready to pay an interest to black money holders in return for a one-year lock-in.

This reversal of trend, according to an economist quoted in the report, indicates that the black money has already entered into the system. Another reason being spoken about is that holders have found new ways to convert their black money into white.

Over years of practice allowed by the government, blackmoney has become an insuperable part of currency system of India. The debate on whether demonetization is a boon or blunder for 125 crore Indians is turning intense with former finance minister P Chidambaram and noted economist Jagdish Bhagwati joining with their views and allegations. Chidambaram said PM Narendra Modi’s currency ban is the biggest scam of the year and an “absurd, thoughtless move” that must be probed while Bhagwati has said demonetization is a “courageous and substantive economic reform that, despite the significant transition costs, has the potential to generate large future benefits”. But Bhagwati, like Modi and other BJP leaders, is drawing a clear political line and has not explained the “benefits” of suffering by the people of India. He is just confusing the affected masses of India.

Bhagwati’s argument, that the currency ban will check counterfeit notes “with the new notes being much less prone to counterfeiting” doesn’t have much support of evidence on the ground since there are already reports that fake Rs 2,000 notes are in circulation. Given the past experience, it is just a matter of time before fake notes enter the scene again in a major way. Bhagwati’s optimistic views on the currency ban is a booster dose to the Narendra Modi-government currently struggling to face criticism on the massive, overnight currency ban

Chidambaram’s allegation that currency ban is a scam with an ill-intent has generated debate in the media and the former FM has asked some right, pointed questions. For instance, Chidambaram questions the large-scale leakage of new Rs 2,000 notes to hoarders at a time when new currency is scarce even at bank branches. The incidents of new Rs 2,000 note bundles surfacing across the country to the tune of crores of rupees point to major lapses in implementation by the Modi government. These instances must be investigated and the likely involvement of bank officials needs to be probed.

Chidambaram is bang on when he says what calculations went to the government decision of setting the Rs 24,000 weekly withdrawal limit from bank branches when enough isn’t cash available. Similarly, his point that blanket ban on district cooperative banks has hurt the farmers is true given the experience in rural areas, especially in states like Kerala where cooperative sector plays a key role. The Modi government owes an explanation on these and has faced severe criticism for lack of planning, in turn, causing difficulties to public.

Chidambaram defending the Congress’ opposition strategy in Parliament — the PM should be present and speak on the issue—isn’t an unreasonable demand. Given the critical nature of demonetization for India’s economy and the hardships it has caused to its common people. There is no excuse for PM Modi or BJP for not taking the Parliament into confidence, stating the objectives, progress and rationale of the demonetization scheme.

Bhagwati notes that “around 80 percent of the currency in higher denominations has now been deposited back into bank accounts. Since individual deposits will now be matched with their tax returns and unaccounted deposits will be taxed, this will yield a windfall for the government, permitting large increases in social expenditures.” But this is something many other economists have questioned cautioning one should wait and watch as to how much of the unaccounted deposits the tax department is able to recover ultimately. For instance, take a look at what another world-renowned economist and former RBI governor, Raghuram Rajan, said on demonetization. “Black money hoarders find ways to divide their hoard into many smaller pieces. You find that people who haven’t thought of a way to convert black to white, throw it into the coffins or hundi in some temples. I think there are ways around demonetization. It is not that easy to flush out the black money.”

The Modi government could have introduced the demonization without harming the common peole and helping the rich and corporate lords.

While it is a fact that the demonetization has nudged several hesitant people to start using electronic payment tools, the idea of using large scale demonetization (sucking out 86 percent of currency by value all of a sudden), is contested by experts, who have been saying that such a push should have happened over a period of few years, rather than through a shock-treatment such as this putting lives at difficulty. Also, India needs to have strong laws to ensure customers and common people are protected in the event of losing money while making payment through mobile or laptop. As of now, that isn’t the case.

Chidambaram has raised certain important points on demonetization. His posers expose the government’s implementation flaws and immediate challenges on making the transition process smooth to end the cash-crunch.

PM Modi’s shock therapy has caught the common people unaware and hence they have no idea about the move and how to go about, while for the rich and corporate lords money is not at all a problem.

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Finance

PM Kishida Outlines Vision for a New Form of Capitalism

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Image source: Wikipedia

Japanese Prime Minister Kishida Fumio called for a new form of liberal democratic capitalism, balancing economic growth and distribution, in a special address to business, government and civil society leaders taking part in the World Economic Forum’s virtual event, the Davos Agenda 2022.

“A key focus of my administration will be the revitalization of Japan through a new form a capitalism,” he said. Unfettered state capitalism without adequate checks and balances produces problems such as widening income gaps, rural-urban disparities and social tensions, he added.

Kishida emphasized that the time has come for “historic economic and social transformations”. He said Japan will pioneer a new form of public-private partnership, with leaders of government, industry and labour all working together to develop paradigm-shifting policies. “There has been an overreliance on competition and self-regulation to constrain the excesses of market forces,” he added. “This must change.”

These reforms will build on emerging strength shown by Japan’s economy. However, he reiterated that current policies are not sufficient to ensure that growth is sustainable and inclusive.

The prime minister called for Japan to lead the world in green transformation. He said investment in green technology “will be more than doubled” and become an engine of growth. He also announced that a carbon pricing system will be introduced as soon as possible and Japan will continue to support the Asian emissions trading market.

“Japan remains committed to the Paris Agreement and will achieve carbon neutrality by 2050,” he said. Private and public sector leadership will work tightly together on the demand and the supply side to support the transformation. One focus for Japan’s clean energy strategy is to reform the energy sector, which accounts for more than 80% of greenhouse gas emissions. Smart grids, upgraded power and distribution networks as well as low-carbon energy sources like solar and wind energy are all part of the solution, he said.

Another important pillar for Japan’s transformation is digitization. “While Japan has traditionally lagged in digital uptake, COVID-19 has given Japan a chance to leap-frog its digitization efforts,” Kishida said. To support this, the government will invest heavily in next-generation networks, optical fibre and 5G-related infrastructure – extending it to 90% of the population over two years.

Kishida also laid out plans for increased corporate disclosure to encourage investment in human capital. “Investment in people is often regarded as a cost, but it is a source of medium to long-term corporate value,” he said.

The prime minister pointed out that Japan continues to take a cautious approach to COVID-19, with borders closed until the end of February. “Changes will be made to border policies as more data comes in,” he said. The government is taking a realistic view and he stressed that a zero-tolerance policy towards COVID-19 is neither possible nor appropriate.

Klaus Schwab, the World Economic Forum’s Founder and Executive Chairman, thanked Japan for taking an active part in collaborative global efforts to combat shared challenges. “The capabilities of the Fourth Industrial Revolution open up new possibilities and opportunities,” Schwab said. “The future will be much greener, more digital and human-centred.”

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Environment

In Jamaica, farmers struggle to contend with a changing climate

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Althea Spencer harvests her tomato crop. Dwindling rainfall in central Jamaica has made farming a challenge. Photo: UNEP / Thomas Gordon-Martin

It’s 9 am and the rural district of Mount Airy in central Jamaica is already sweltering. As cars trundle along the region’s unpaved roads, chocolate-brown dust clouds burst from behind their back wheels. 

It is here, 50km west of Kingston and 500 meters above sea level, that the Mount Airy Farmers group are having a morning meeting. There are around two dozen people and they all say the same thing; they’re struggling to keep their plots productive amid dwindling rainfall, a byproduct of climate change.

“The weather here’s a lot drier for longer these days,” says Althea Spencer, the treasurer of the Mount Airy Farmers group, which is based in Northern Clarendon. “If  you don’t have water, it makes no sense to plant seeds because they will just die.”

The farmers though, have recently gotten some help in their search for water.

Just meters from where they are gathered stands a two-storey shed with a drainpipe on the roof that funnels rainwater into a tall, black tank. It’s one of more than two dozen reservoirs dotted across these mountains. They are part of a project backed by six United Nations (UN) bodies to help Mount Airy’s farmers adapt to climate change.

“This partnership among the UN and with communities is exactly the type of activity needed to address the day-to-day and practical impacts of climate change,” says Vincent Sweeney, Head of the Caribbean Sub-Regional Office at the United Nations Environment Programme (UNEP). “As we look beyond the Glasgow Climate Change Conference, it is vital that we… adapt to the new realities of a warmer planet in order to protect lives and livelihoods in Jamaica and the Caribbean.”

The challenge is not unique to the region. Droughts, floods, and the spread of pests, the byproducts of climate change, are threatening agricultural production around the globe, says the Food and Agriculture Organization. That is potentially disastrous in a world where almost 700 million people go hungry each year.

Small-hold farmers, who work more than 80 per cent of the world‘s farms, in particular, will need support to remain resilient in the face of climate change, say experts.

A country at risk

Farmers in Jamaica, an island nation of 3 million, are especially vulnerable. In 2020, Jamaica became the first Caribbean country to submit a tougher climate action plan to the UN because the country was at risk from rising sea levels, drought and more intense hurricanes, its government said.

In 2018, the Mount Airy farmers enrolled in the United Nations-backed programme that helps build the resilience of communities to threats such as climate change, poverty and water insecurity. It is regarded as the first joint programme of the United Nations  in Jamaica, combining the resources of six agencies, including UNEP.

In Mount Airy, the UN programme has invested in 30 new water harvesting systems. The large, black tanks, which appear across the hilltops like turrets, catch and store rainfall, allowing the farmers to use it evenly via a drip irrigation system. This reduces the emerging threat of longer and more intense dry spells.

The new irrigation system also frees farmers from watering their crops by hand. “Before we got the new system, you had to predict rainfall to put seedlings in,” says Spencer, a rollerball pen tucked neatly into her hair and her feet shifting on the sunbaked earth. “It feels pretty good. It allows me more time to do housework, keep up with my farm records, and I have time to go down to the market.” 

Alongside the tanks sit drums which mix fertilizer with water and spread it evenly among the crops, saving the farmers valuable time. The dissolvable fertilizer is also cheaper than standard fertilizers.

On top of that, the irrigation system improves yields. Spencer now grows and sells more sweet potatoes, peppers and tomatoes than ever before.  

Coupled with the water tanks, the programme has also prioritized education. Seminars are run by the Rural Agricultural Development Authority, a government agency, which aims to broaden the farmer’s knowledge and skills. 

Although it is not unusual for women to farm these lands, Spencer speaks about how the trainings have helped to empower the female members of the group by coming together. “To me, the learnings and the trainings bond us ladies together,” she says. 

A life in the mountains

Back at the gathering of the Mount Airy farmers, the assembled say some prayers and repeat their mantra aloud two times: “We are the Mount Airy Farmers Group our motto is: All grow in fear and failure bearing fruits of confidence and success.”

Spencer, who is in her 40s, is a vocal participant at the meeting and obviously well-liked. She was born in Mount Airy and has been farming these fields most of her life. She has vivid memories of working on her father’s farm as a child. Unable to afford to pay anyone else, he often pulled her out of school to sow and reap the fields.

That’s a common refrain among many who grew up in Mount Airy – and one the new UN programme is aiming to change. 

“If my father had this harvesting system, would I have gone to school more?” Spencer asks herself. “Yes, probably. But even then, he was always working us. So I’m sure he’d find something for us to do,” she says laughing. 

Spencer welcomes the introduction of the water tanks. However, she says current rainfall patterns mean water sometimes still runs out. “If you don’t manage your water properly, one will run out before you get anywhere,” she says ominously.

Her story may be one of success today, but it shows that living with climate change will require adaptation and continued investment for years to come. UNEP’s 2021 Adaptation Gap Report called for an urgent increase in financing for climate adaptation. It found that adaptation costs in developing countries are five to ten times greater than current public adaptation finance flows, and the adaptation finance gap is widening.

UNEP

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Africa Today

FAO launches $138 million plan to avert hunger crisis in Horn of Africa

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A man collects water from a water tank in Kenya. ©FAO/Patrick Meinhardt

More than $138 million is needed to assist rural communities affected by extended drought in the Horn of Africa, the UN Food and Agriculture Organization (FAO) said on Monday, launching a comprehensive response plan for the region. 

A third consecutive year of poor rains is posing a major threat to food security in countries already facing natural resource limitations and conflict, the COVID-19 pandemic, and locust invasions during 2020-21. 

FAO fears that a large-scale hunger crisis could break out if food-producing rural communities do not receive adequate assistance timed to the needs of the upcoming agricultural seasons. 

Millions at risk 

The bulk of the funding under the FAO Horn of Africa Drought Response Plan, $130 million, is urgently needed by the end of February, to provide critical assistance to highly-vulnerable communities in the three most impacted countries: Ethiopia, Kenya and Somalia 

Projections indicate that some 25.3 million people will face “high acute food insecurity” by the middle of the year.   

Should the scenario materialize, FAO said it would place the Horn of Africa among the world’s largest-scale food crises. 

Now is the time 

“We know from experience that supporting agriculture at moments like this is hugely impactful – that when we act fast and at the right moment to get water, seeds, animal feed, veterinary care, and much needed cash to at-risk rural families, then hunger catastrophes can be averted,” said Rein Paulsen, the agency’s Director of Emergencies and Resilience. 

“Well, the right moment is now. We urgently need to support pastoralists and farms in the Horn, immediately, because the cycle of the seasons waits for no one.”  

Mr. Paulsen warned that the clock is already ticking as the lean season, which just started, has been marked by limited grazing opportunities for pastoralist families whose livestock will need nutritional and veterinary support. 

Meanwhile, families who rely on producing crops will need seeds and other supplies in time for the Gu planting season that begins in March.  

Water and seeds 

The FAO plan targets 1.5 million of the most at-risk rural populations in Ethiopia, Kenya and Somalia. 

For pastoralist families, support will include providing animal feed and nutritional supplements, as well as mobile veterinary health clinics, to keep their livestock healthy and producing milk; transporting water to 10,000 litre collapsible water reservoirs set up in remote areas, and upgrading existing wells to run on solar power. 

Crop-reliant families will receive seeds of drought-tolerant early-maturing varieties of sorghum, maize, cowpea and mung bean, and nutrient-dense vegetables.  The UN agency also aims to arrange for pre-planting land-ploughing services and access to irrigation, as well as training on good agricultural practices. 

Extra income

Cash for work programmes would allow able-bodied households to earn extra income by helping to rehabilitate irrigation canals, boreholes or other agricultural infrastructure.  

Those not able to work due to health or other reasons will receive “unconditional infusions of cash”. FAO said that providing rural families with extra disposable income gives them the means to buy food at market while they wait for their harvests to come in. 

In Somalia, the FAO plan calls for the provision of boats, equipment and training to help coastal communities who do not typically fish, to secure a new and much-needed source of nutrition, building on existing programmes to promote the diversification of livelihoods in the country.   

FAO said if fully funded, the plan would allow for the production of up to 90 million litres of milk and up to 40,000 tonnes of staple food crops in the first part of 2022, putting over one million highly food insecure people on a safe footing, for at least six months. 

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