More than 150 citizens, including Prabhat Patnaik, Nayantara Sahgal, Prashant Bhushan, Jayati Ghosh, Anand Patwardhan, Syeda Hameed, M K Raina, Vivan Sundaram, Pamela Philipose, and Justice (retd.) Chandru Krishnaswami have come out strongly against the PM’s decision to demonetize Rs. 500 and Rs. 1000 notes. The attached statement raises questions on the efficacy of demonetisation in eliminating black money and counterfeits while plunging the entire country into chaos. At the same time, related developments call into question the PM’s will to truly tackle corruption and pursue accountability of the powerful corrupt.The common person has been beggared and is struggling to meet even basic necessities. 22 persons have died as a result of the chaos and crisis that the demonetisation has brought. The situation is likely to deteriorate as people’s patience wears thin over the days and therefore, a rollback or the very least suspension of demonetisation has been demanded.
We, the undersigned, support all efforts to stop corruption, stamp out black money and counterfeit currency, and act against funding that helps creates unrest in the country be it through terrorism or creating divisions and hatred among people. However, the decision to de-monetize Rs. 500 and Rs. 1000 notes is misconceived and will not address the problem of black money for the following reasons:
- If it is the Government’s case that high value denomination currency is used to hoard black money, then the decision to reissue new Rs 500 and Rs 1000 notes does not make sense. Issuing even higher value Rs 2000 note is completely inexplicable and puzzling.
- Black money is generated through evasion of taxes on income from lawful ac- tivities and money generated from illegal activities. In the absence of steps to curb the generation of black money, demonetization is a futile exercise, as it proved to be in 1978.
- In the last 5 years, IT raids have found that only 5-6% of black money is kept in hard cash. Moreover, those who have amassed sizable black money are equipped to find ways around demonetization by converting their existing cash to bullion, gold jewellery, real estate and foreign currencies through brokers and middle-men. In fact, organized middle-men and touts have already emerged to convert black money into white for a commission.
- As per The Indian Statistical Institute, Kolkata study done on behalf of the National Investigation Agency (NIA), Rs 400 crores worth of fake currency is in circulation in the Indian economy. This is only .028% of Rs 14,180 billion worth currency demonetised in Rs 500 and Rs 1000 notes
- Experts including a former RBI Governor and the current Chief Economist of the World Bank have spoken against demonetization.
- 86% of currency in circulation is in Rs 500 and Rs 1000 notes. 97% of all transactions by volume are done in cash. Summary demonetization has created chaos all over the country with people unable to purchase daily essentials and, in many cases, life-saving goods and services. 5 persons, including one infant, have died as a direct result of the impact of demonetization
- Only about 30% of the Indian population has access to the banking system as per data compiled by the banking division of the finance ministry. Moreover, the distribution of banks is highly skewed with a third of all bank branches in only 60 Tier 1 and Tier 2 cities/towns. Consequently, people in rural India who often also suffer from inadequate information have become the worst vic- tims of demonetisation.
- Reports have started coming in of digital payment systems unable to keep up with the new volume of transactions with credit and debit card servers also going down.
- All currency has value only because of the inherent trust in the banking system. Summary demonetization has shaken this trust and will likely impact India’s economy well beyond the initial and widespread chaos.
It is evident that demonetisation will not achieve its stated intent of eliminating black money but has thrown the entire country’s economic system in disarray. Related developments also call into question Government’s intentions and need clarification:
- Rs 1.14 lakh crore of bad debts has been waived by Government banks in the last 3 years. At the same time, loans worth lakhs of crores of rupees are still outstanding. Why has the Government not made public the names of the beneficiaries of the waiver and the names of the big defaulters, both individuals and corporations?
- A key campaign promise was to bring back black money stashed abroad and deposit Rs 15 lakh each from the proceeds in the account of every citizen. Why has the Government not made public the names held by it of Indian account holders in offshore banks?
- Were BJP leaders and friends given prior information about the impending demonetisation so that they could take pre-emptive measures to safeguard their assets? [The WB unit of the BJP is reported to have deposited a total of Rs 3 crore in Rs 500 and Rs 1000 notes in its bank accounts in the days and hours before the announcement of the demonetisation. A BJP leader posted pictures of wads of Rs 2000 notes much in advance of the demonetisation. A digital payments company printed a full page advertisement lauding demonetisation in a newspaper on the morning following the announcement at 8 pm on November 8, 2016.]
- Why did the Government announce that cash deposits higher than Rs 2.5 lakh will be scrutinised against the tax return with 200% penalty for any tax eva- sion? [This appears to be intended to dissuade people from depositing money so that the Government can claim success of demonetisation and forewarn people to split their deposits among different accounts and different depositors.]
- All conversions can be done only after filling a form and attaching ID proof. This has led to major harassment of poor and illiterate people and those who do not have an identity card.
- What is the cost of demonetisation? [It has been estimated that the cost of re- placing currency in circulation with new Rs 500 and Rs 2000 notes will be Rs 20,000 crore. Besides, far greater losses will be incurred by markets predominantly run on cash and the participants (wholesale markets, retail stores, street-vendors, transportation etc) and in lost productivity.]
- Even if the Government was intent on demonetisation, why was it not implemented after careful planning: new notes printed, arrangements made for dis- tribution, ATMs recalibrated etc? [It has been seen that banks are running out of cash within hours of opening and most ATMs are still non-functional.]
- We are all concerned about the use of money power in elections. Why hasn’t the Government proposed state funding of elections? Why is the BJP resolutely against transparency in its own funding by refusing to come under the Right to Information Act?
The summary way demonetisation has been effected is leading to a riot like situation in the country. We demand that the Government ensure that common people have immediate access to enough money to pay for their daily needs and health emergencies. Failing which, we demand the rollback of demonetisation or suspension of de- monetisation to enable the common person to make adequate arrangements for daily needs and for more orderly phasing out of the old notes. The role of the Government is to undertake honest tax administration and not to treat the common person like a criminal making him/her stand in line and filling forms to access his/her own legitimate money
T M Krishna
Dr. Anand Teltumbde
Chandru Krishnswami, Justice (Retd.)
A longer list of signatories is reproduced below (in alphabetical order)-
A R Vasavi, Academic, Karnataka
Aanchal Kapur, KRITI Team
Abha Bhaiya, SANGAT South Asian Feminist Network
Abha Dev Habib, Dept. of Physics, Miranda House, Delhi University Abhilash B
Akhil Katyal, Poet and Academic, Delhi
Anjali Bhardwaj, Co-convener, NCPRI
Ashalatha Sidbatula, Mahila Kisaan Manch (MAKAAM)
Ashish Ranjan and Kamayani Swami, Jan Jagran Shakti Sangathan, Bihar Ashok Lal
B Durga Bhavani
B Syama Sundari
B. P. Sahu
Bela Bhatia, Activist
Bhaskar Prabhu, Mahiti Adhikar Manch, Maharashtra
C A Naralanan
Chandana Dey, Academic
Chander Uday Singh
D N Jha
Dinesh Mohan, Academic
Donthi Narasimha Reddy, Senior Activist, Handloom Workers Group Dunu Roy, Hazard Centre, Delhi
Gabriele Dietrich, Penn Urimay Iyyakam, Madurai and NAPM-TN,
Jaya Lakshmi, Grameena Mahila Okkuta
K Laxminarayana, Hyderabad Central University
Karnataka Janaarogya Chaluvali
Kathyayani Chamraj, CIVIC, Bangalore
Kiran Kumar Vissa, Rythu Swarajya Vedika, AP and Telangana.
Koninika Ray, National Federation of Indian Women
M V Shobhana Warrier
Madhuresh, National Alliance of People’s Movements
Madhuri Krishnaswamy, Jagrit Adivasi Dalit Sangathan, Madhya Pradesh Madhurima Nundy
Manjari Katju, University of Hyderabad
Mary E John, Academic
Mohan Rao, Professor, Centre of Social Medicine and Community Health, JNU Moushumi Basu
Mukul Mangalik, Academic
Paraminder Jeet Singh, IT for Change, Bangalore Pramod Kumar
Prashanto Sen, Advocate, Supreme Court Preeti Sampat, Sociologist, Delhi
Prof. Anandlakshmy, Chennai
Prof. Hargopal, Visiting Professor, NLSIU, Bangalore
Puloma Pal, Mumbai
Renuka Mukerji Agarwala
S. Jeevan Kumar, Human Rights Forum, Telangana and Andhra Pradesh S.G.Vombatkere, NAPM, Mysore
S.Q. Masood Centre for Peace Studies
Sandhya, Independent consultant and Researcher, Delhi
Sanjai Sharma, Human Rights Law Network
Sanjaya Kumar Bohidar
Satish Deshpande, Sociologist, Delhi University
Satya Rai Nagpaul, Mumbai
Shaikh Ghulam Rasool, RTI Activist, Jammu and Kashmir
Soma KP, Independent Feminist Activist and Researcher
Sudha Goparaju, Independent Researcher and MAKAAM.
Suhas Kolhekar, NAPM, Maharashtra
Sumandro Chattopadhyaya, Centre for Internet and Society, Delhi
Suvrat Raju, International Centre for Theoretical Sciences, Tata Institute of Funda- mental Research.
Taru Dalmia, Singer and Musician
Uma Shankari, NAPM
Usha Seethalakshmi, Independent Researcher, Hyderabad and MAKAAM.
Vasanth Kannabiran, Activist and Writer
Vasavi Kiro, Co-convenor NAMHHR, Ex-member Jharkhand State Commission for Women
Vimala Morthala, Independent Social Activist and Writer, Telangana
(and many more…)
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