New Delhi, 10 Nov 2016: The Social Democratic Party of India (SDPI) has termed the demonetization of Rs.500 and Rs.1000 notes by the NDA Government to contain the Black Money menace will hit the common and ordinary man most. The so-called “surgical strikes” is like hitting him below the belt while the real sharks are sitting tight on their black money stashed away abroad or in bullion/real estate. The strikes are bound to trap only the small fry. Moreover, the move may have an adverse impact on the economy, given that about 40% of the economy is driven by small- and medium-sized enterprises that largely run on cash transactions, the party said
SDPI national president A. Sayeed in a statement has said that it welcomes any crackdown on black money and corruption. However, without “Surgical strikes” against the wealthiest will only prove counterproductive in the long run. The huge black money holders may not even possess 500/1000 notes. They may have dollars, gold, property in India abroad etc. They are least affected by demonetization. The inflation will keep an upward trend and the economic disparity will keep growing. The government is not able to clarify the questions regarding effectiveness of this measure. More so, people are unable to understand why Rs.2000 note is being started, while Rs.500 note will be back again. You are in no way stopping the high value notes which will keep on encouraging the black money. Why the government is not going digital currency and transactions?
Sayeed said the demonetization move has caused inconvenience to farmers, the poor in villages, ordinary shopkeepers, small and medium businesses and the housewives alike who keep cash at home. It will also sound the death knell for small businessmen. The Corporate grip on the economy will further strengthen. The Middle and upper Middle Class will suffer. Banking Sector and the Government will benefit. The understanding between Corporate Sector, Banking Sector and the Political Hierarchy and mutual distribution of benefits is hitting the masses in a big way. The sectors which fall in between are being successively targeted by the same trio. The latest step by the Government will strangulate this middle group, he added. This “emergency measure”, however, is in line with the numerous other measures being currently pursued by the Modi government which has embarked on an undeclared “Emergency”: it is as fatuous as it is against the people.
Sayeed recalled that this is not the first time that such demonetization of currency notes has occurred in India. In January 1946, the 1000 and 10000 rupee notes were demonetized; and in 1978 the Morarji Desai government had demonetized 1000, 5000 and 10000 rupee notes from the midnight of January 16. But even in 1978, let alone in 1946, this had caused no hardships for the ordinary people, since most of them had scarcely ever seen such a note, let alone possesses one. (Even in 1978 Rs.1000 was a lot of money and common people hardly saw notes of 1000-rupee denomination). But that move of the Morarji Desai government, even though it did not impinge on common people, did not end the scourge of “black money” either. The Modi government’s move, while equally ineffective in countering “black money”, has the added flaw of impinging severely on common people.
He lamented that “Black Money” which primarily means unaccounted money hidden to avoid the taxes, does not involve the accumulation of money by the Corporate through extremely high pricing of their products compared to the cost of production. The move seems to be a clever one to stuff banks with funds from public as most of them are on the verge of collapse because of reckless bad loans to big corporates. Curbing black money is a lame excuse as new higher denominations will create black money more swiftly.
It is regrettable and deplorable.
Sayeed said that the cause of the black money in our country is the nexus between politics and unaccounted money. Now, so long as electoral reforms are not initiated as suggested by the Election Commission of India which had pin-pointed it to short-circuit that nexus curb on black money cannot be achieved. Somehow the black marketers in our country are ingenious than laws and politics and politicians are complicit in this. According to an estimate only 2 percent of unaccounted money (which by several estimates accounts for about 30 t0 50 percent of our 2 trillion economy) is in the form of currency. The remaining is d and real estate. The large unorganised sector will definitely, over time, come up with ways and means of converting this miniscule portion of their wealth into more acceptable forms.