Is demonetization the answer to terrorism and corruption?

Submitted by admin on Mon, 2016-12-05 16:51

Statement by Lok Raj Sangathan on Demonitisation on 5th December 2016.

Since November 9th, crores of our people are facing enormous hardship, forced to stand in serpentine queues and unable to buy even day-to-day necessities. It is estimated that the denominations demonetized – i.e. the 500 and 1000 rupee notes – constitute 86% of money in circulation., The sudden removal of this much cash in circulation has caused untold misery to  workers, peasants, street vendors, shopkeepers and others.  Life has come to a near standstill in many economic sectors. Especially in those sectors where workers are paid daily or weekly wages in cash, such as the garment, diamond, ceramic and other sectors, workers have been forced to go back to their villages until the situation returns to normal. Farmers are unable to sell their crops or buy seeds and fertilizers for the rabi season.   India has among the lowest percentage of people who have bank accounts. Bank workers have been burdened with extraordinary workload and enormous tension. Skirmishes and violence have been reported from many places.

The move has been severely criticized by several sections of people. Why crores of people have to suffer for days together for retrieving back money stowed away in cash by a few has been questioned. It has also been pointed out that most black money has already been converted to other assets such as land, investments, stocks and shares and the present exercise may be futile. Others have pointed out that this exercise will only benefit big financial e-commerce and e-wallet companies, who have been eyeing the vast Indian market.
But what has been the most worrying issue is the justification given by the Prime Minister that "Terrorism is a frightening threat. So many have lost their lives because of it. But have you ever thought about how these terrorists get their money? Enemies from across the border run their operations using fake currency notes. This has been going on for years."

By presenting the move for demonetization as an anti-terrorist activity, and enjoining people of the country to support this move as a move against threats to the security of the country, the Prime Minister and the government have tried to befuddle the issue of the source of terrorism.

It is a known fact that the US and its intelligence agencies are the biggest sponsors and financiers of armed terrorist groups in many countries.  Such groups are financed through questionable methods and shady organisations. The US has set up such operations in all those countries where it has strategic interests and has labelled all those who oppose its hegemonic moves as “terrorists” and “fundamentalists”. Lakhs of innocent people have been victims of such “anti-terrorist” operations by the US in Afghanistan, Iraq, Syria, Ukraine and other countries.

Several reports have also pointed out how the moves of the Indian and Pakistani governments to establish peace across the border have been scuttled time and again by terrorist activities, funded by external agencies. This keeps India and Pakistan at loggerheads and forever dependent on arms imports. Various forces are calling for a break with US military and intelligence ties. This is a good proposal as the source of terrorism is widely known to be US. Efforts should be made by all concerned to mobilise public opinion around this proposal.
The present exercise to demonetise cannot be a “decisive step” against terrorism as the government claims. If the aim is to establish friendship between the people of India and Pakistan and bring normalcy to the situation in Kashmir, then the Indian government has to take decisive steps against any foreign interference in the region. It has to create conditions for peaceful talks with Pakistan and bring normalcy to Kashmir by withdrawing the army to the barracks. These will be decisive steps against terrorism, not just the removal of certain currency denominations.

The impression is also being created by the government that if people are forced to transact digitally, then this will lead to economic growth and reduction in poverty. This is a very unscientific observation since the gap between the rick and the poor is most stark in economically advanced countries of North America and Europe. A highly advanced digital economy has not been able to prevent the severe crisis that has beset these countries since 2008 and has led to massive unemployment and bankruptcy of people.

Every advance in technology is a welcome step provided the orientation of economy is changed from pandering to private greed to fulfilling basic necessities of people. The priority of the government should be to ensure food, drinking water, sanitation, clothing shelter, health care and education for all. Our country has enough resources to enable all members of society to live a dignified life. Is the PM willing to make this as the first priority in this demonetization exercise? Will the government be bold enough to pass laws that will guarantee basic necessities for all?  

The present exercise is meant to be a demonstrative attempt to eliminate corruption. But the fact that no action is being taken against those who have accumulated billions of rupees by their control over the land, natural resources and labour of the people belies this claim. The quantum of non-performing assets in Indian banks has been estimated at 6.5 lakh crores. Several public sector banks were on the verge of bankruptcy this year. The present demonetisation exercise which is funnelling the hard earned money of people into bank accounts is expected to recapitalise the banks and postpone their bankruptcy for some more time.

Authoritative sources have pointed out that an estimated Rs 30,000 crores were spent in the recent parliamentary elections, in which the BJP won a majority. It is well known that Indian elections are funded by the biggest monopolies and business houses so that the party of their preferred choice is elected. The 2G scam revealed how ministers are appointed by big business houses to do their bidding. The present demonetisation exercise will not end the domination of money power in elections.

There is no doubt that in a society where people are completely politically marginalised, economic decisions will not benefit them. Only in a new political process where the people have a right to select and elect their candidates, where elected representatives act as servants of the people and render periodic accounts, where people can recall representatives when they do not act in the interests of people, where they have the right to initiate laws which benefit people, and where they are fully involved in decision-making, efforts to eliminate corruption and terrorism can succeed.

Instead of having illusions about the present demonetisation efforts that they will drive economic growth and benefit the poor, we should continue to build samitis in our workplaces and places of residence as fighting organs and actively struggle to bring about a fundamental transformation in the present political process.

An immediate task that we need to take up is to expose this anti-people action of the government, due to which millions of people have been put to severe hardship. We should expose the lie that the demonetisation exercise will somehow eliminate terrorism and corruption. We demand that the Indian government should revoke all military ties with the US and cooperate with other countries of the region to establish friendly relations. We demand that right to their hard-earned money is restored to the people and they be allowed to withdraw the money they need without hassle from their bank accounts. We demand that severe action be taken against business houses which have defaulted in repaying their loans to banks. We demand that all loan waivers, tax concessions and exemptions to big business houses and monopolies are immediately withdrawn by the government. We demand the elimination of money power in elections and state funding of the electoral process. We demand that the government should give utmost priority to fulfilling the basic necessities of people.

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