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.
Philippines Growth to Remain Strong Despite Global Uncertainty
The World Bank maintains its 6.7 percent growth forecast for 2018 and 2019 despite rising global uncertainty. Considering recent economic data, the composition of expected growth was revised as compared to the April edition of the World Bank Philippines Economic Update.
Given recent fiscal trends, government consumption growth was revised upwards, while private consumption growth is expected to expand at 5.9 percent in 2018 and 6.2 percent in 2019.
Investment growth was slightly upgraded due to higher public capital outlays, including increased infrastructure spending. Overall, it is anticipated that real GDP growth will increase towards the end of 2018 and into the first half of 2019 with higher election-related public spending.
“The government’s ability to carry out its investment spending agenda will determine if the Philippines can achieve its growth target of 6.5-7.5 percent over the medium term,” said Birgit Hansl, World Bank Lead Economist for the Philippines. “In addition, higher private investment levels will be critical to sustain the economy’s growth momentum as capacity constraints become more binding.”
Exports, a key driver of growth for the Philippines economy, are projected to moderate in the coming years as global growth is expected to decelerate.
The World Bank’s June 2018 Global Economic Prospects projected a gradual global slowdown over the next two years, predicated on moderately higher commodity prices, strong but gradually moderating global demand, and incremental tightening of global financing conditions. Uncertainty around global growth conditions has risen, with the possibility of trade and other policy shocks emerging from major economies.
New Programme Aims to Improve Infrastructure Procurement Capacity in Africa
The Africa Infrastructure Fellowship Programme (AIFP) was today announced by Jean-Baptiste Lemoyne, Minister of State attached to France’s Minister for Europe and Foreign Affairs.
The World Economic Forum, the Global Infrastructure Hub and the private investment firm Meridiam have partnered to create the Africa Infrastructure Fellowship Programme (AIFP), an initiative to help African governments strengthen internal procurement capability by training and retaining key officials in procurement agencies, with the aim of attracting greater private-sector investment to Africa.
The components of the programme will be tailored to the needs of each country but, at its core, the AIFP will be made up of the following elements:
- Three-day introduction to infrastructure procurement and networking with peers (provided by GI Hub)
- Tutoring and examination through the Multilateral Development Banks’ Private Public Partnerships certification course
- Two-week intensive course in infrastructure procurement (provided by selected universities)
- Two-month placement in a private-sector company’s infrastructure team
- Ongoing support for 12 months following the programme, including twice-yearly AIFP-related events hosted by the GI Hub
“It is important to emphasize that this project is in line with the mission of the Forum, to improve the state of the world. It is necessary to highlight the importance of jointly solving the challenges that surround the development of infrastructure at the global level,” said Denise Burnet, Head of Event Management and Member of the Executive Committee at the World Economic Forum.
Chris Heathcote, Chief Executive Officer of the Global Infrastructure Hub, said that, despite ongoing efforts, attracting private-sector investment into Africa remains a major challenge, and is a barrier to achieving the UN Sustainable Development Goals.
“In order to meet the UN SDGs and the demands of accelerating economic and population growth in the African continent, we forecast that these countries will need to spend $7.6 trillion to 2040. Our analysis forecasts that the continent will invest $4.3 trillion based on current trends, exposing an investment gap of $3.3 trillion, or 43%. Investors will only invest in countries where market conditions are favourable, and it’s our goal through this initiative to assist in creating an environment that is conducive to private-sector investment in infrastructure,” said Heathcote.
Thierry Déau, Chief Executive Officer of Meridiam, added: “As long-term investors, we are convinced that key success factors to projects rely on excellent synergies between the private and public sector. We chose to accompany the AIFP initiative, convinced that this agile organization based on strong commitments of stakeholders is the perfect tool to accelerate the deployment of sustainable infrastructure in Africa.”
Africa has the highest population growth globally, and a number of its countries rank highly in terms of economic growth; and yet these countries also have the lowest growth in infrastructure stock.
The AIFP will be a six-month capability-building programme that will give participants a robust understanding of procurement, governance and the role of the private sector in infrastructure projects. The programme will provide participants with a mix of theoretical and practical training, opportunities to work within major private-sector companies, and lead to the establishment of a strong network of infrastructure practitioners across Africa.
How ICT is transforming and making our societies more resilient
Together with the International Telecommunication Union (ITU) and other partners, the United Nations Industrial Development Organization (UNIDO) has organized a side event at the UN High-level Political Forum on Sustainable Development (HLPF) to explore how information and communication technology (ICT) is transforming and making our societies more resilient.
The HLPF, which runs through to 18 July, brings together more than a thousand government, business and civil society leaders. The Forum, which meets annually under the auspices of ECOSOC, is a platform for the exchange of experiences in the implementation of the Sustainable Development Goals (SDGs), identifying gaps and lessons learned.
A selected multi-stakeholder panel at the side event, “ICT enabling the transformation towards sustainable and resilient societies”, included government, business and the UN. Participants discussed how digital technologies are improving productivity and competitiveness, pointing out that recent studies confirm that digitalization has immense potential that could deliver around $100 trillion in value to business and society over the next decade. It was also noted that digital solutions have the potential to enhance resource optimization and efficiency in water and energy consumption.
Providing a UN perspective, UNIDO’s Takeshi Nagasawa said, “The sustainable energy transition and Industry 4.0 share important characteristics that can be interconnected to pursue a sustainable energy transition. Such integrated approaches could be guided by the SDGs, which provide important target setting for energy, climate change and industry,” adding that UNIDO has “the capability and relevant portfolio to foster Industry 4.0 across all stages of industrial development.”
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