The Big Story: Obfuscating the narrative
When it was announced that Prime Minister Narendra Modi would address the nation on New Year’s eve, most viewers expected a thorough report card on demonetisation. They hoped that he would answer the key questions on its implementation that have been dogging his government since the policy came into effect on November 9. Instead, what the nation got on December 31 was a speech that was a mixture of Budget address and election rally.
While the prime minister praised Indians for their patience in calmly bearing the burden of demonetisation, he completely failed to acknowledge the intense pain that has resulted from his decision to scrap Rs 500 and Rs 1,000 notes overnight.
Modi asked banks to focus on the poor and the middle-class, arguing that demonetisation has brought more money into the banking system than ever before. But he failed to offer any data to support this contention. There is still confusion on how much black money was present in the the economy. If the government did not have a proper estimate, how can anyone judge the success of demonetisation, a policy marketed as the ultimate solution to the black money problem? Other basic information remains unavailable. How much cash was deposited into banks between November 9 and December 30? This lack of transparently has led to the suspicion that the policy may not have worked as well as the government believed it would.
Most importantly, Modi failed to tell the country when exactly the severe cash crunch that is crippling the economy would be resolved.
Prime Minister Modi noted in his speech that only 24 lakh Indians have declared incomes of over Rs 10 lakh. By bringing this information to the heart of the demonetisation discourse, Modi has clearly given an signal to the Income Tax department, which will be under pressure to increase this figure substantially in the coming years. This brings along with it the dangers of arbitrary action, something the department was efficiently used for by its political bosses during the “license raj” days of the 1970s.
Modi used his speech to announce new housing schemes for the poor, which included 4% rebate on interest for loans up to Rs 9 lakh. Given that those living below the poverty line can hardly afford to take a loan of that size, the incentive of interest rebate looks like a cosmetic touch up at best.
Then there was the announcement of Rs 6,000 stipend per month for pregnant women, a promise made back in 2013 under the National Food Security Act but left unimplemented by the government for the last three years. There is no reason to believe that a government that has treated statutory guarantees so casually will implement other new schemes vigourously.
The underlying idea in announcing these schemes was to show that the black money recovered and brought into the banks was being used purposefully for India’s poorer sections. But in effect, these announcements to little assuage the fears of the tens of thousands whose livelihoods have been devastated by Modi’s ill-timed and poorly implemented demonetisation policy.
The Big Scroll: Scroll.in on the day’s big story
Shoaib Daniyal on why Modi new year speech was like a Band Aid trying to plug a dam.
M Rajshekhar reports on the effects of demonetisation on three towns on the Tamil Nadu-Karnataka border.
- In The Hindu, AK Verma on why political parties fighting the Uttar Pradesh elections have to provide more clarity on their policies and positions.
- Tavleen Singh says in the Indian Express that an uninspiring Opposition has helped Prime Minister Modi get away with bad governance. But he may run out of luck in 2017 if real reforms are not initiated.
- In the New York Times, Nicholas Kristof weighs in on the failures of the media in 2016 and the need to focus on the substantial rather than the frivolous.
Dhirendra K Jha on why Akhilesh Yadav’s coup in the Samajwadi Party could lead to larger, secular alliance with the Congress.
“The first indication of this became visible moment the junior Yadav was made the party’s national president – a position held by his father for decades – at a meeting of about 5,000 Samajwadi Party leaders in Lucknow on Thursday. He received a congratulatory message from a senior leader of the Congress soon after.”
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