Factoring demonetization

Is demonetization going to be a factor in the coming assembly elections in some states including Uttar Pradesh and Manipur? This is a major question haunting the political parties and political pundits in the last few days. Many had initially praised the Prime Minister Narendra Modi for his stated mission to weed out black money and corruption, but the implementation part and the fallout arising out of extremely slow replacement of old notes with new notes is taking its toll on the common populace. The opposition parties are up in arms in both Parliament and the streets. Old enemies are coming together to give stiff opposition to demonetization while BJP is trying to defend itself by dubbing the opposing parties as black money hoarders. Both houses of Parliament have not been functioning since it began, due to relentless disruptions by opposition parties over the demonetization issue. Some pundits say, through demonetization Modi is trying to cripple some opposition parties who functions on ‘black money’ and at the same time expand its base to the poorer sections of society by hurting the rich and corrupt. But, it is not yielding the desired result. Reserve Bank of India (RBI) is not doing enough to suitably replace the old notes with new ones to bring normalcy in the market. The bank employees are up in arms against the RBI Governor Urijit Patel even as they continue to be mobbed and harassed by angry customers. Yet, they continue to work on holidays and burns midnight oil to settle the days account for conducting the next day. The patience of the common man is running out and ATMs in fringe states like Manipur dispensing ‘worthless’ Rs 2000 notes are running out of cash quickly. While Prime Minister Narendra Modi’s demonetisation is turning the economy upside down and creating chaos BJP leaders continue to defend him. Yet the question remains, are they really speaking from the heart. The way Modi and Amit Shah functions everyone even within the party is afraid to speak out and faced the guillotine. One thing is sure, PM Narendra Modi is speaking from his heart as he was the one who took the ultimate decision. But, RBI was caught napping as it could not ensure a rapid cash flow in the market to match Modi’s surprise announcement of demonetization of higher value currencies. It has been reported that printing of the new notes began only two months before the announcement of demonetization. And it will take four/five months more to print new Rs 2000 and Rs 500 notes and another few months to print new notes in smaller denominations to adequately replace the old ones which were in circulation earlier. So, the question whether demonetization is going to be factor in the ensuing assembly elections, immediately springs up. Its victory in three of the six states in the recently held by-elections is being touted by the BJP as a vote in favour of demonetization. We have West Bengal CM Mamata Banerjee crying foul of the demonetization move. Yet her party Trinamool Congress won the Coochbehar and Tamluk Lok Sabha seats by a huge margin of nearly five lakh votes and the Monteswar Assembly seat by 1.27 lakh votes. On the other hand West Bengal BJP chief Dilip Ghosh cites the increase in vote share to claim that people have showed their support towards the decision of demonetization. The story of by-elections is that, it usually tends to go the ruling party way. Of the 120 by-elections held since 2014, 84 of them were won by the ruling party. In 2016, the ruling parties were victorious in 20 of them and only 7 of them were won by the opposition side. Tamil Nadu by-elections stand as a case in point, as the ruling party AIADMK has swept the by-elections continuously since 2011. So, one cannot unequivocally say that the by-election victories were an authentication of decision to withdraw the Rs 500 and Rs 1000 currency notes or for that matter any other policy. But, if the present chaotic situation of cash crunch continues to linger for some more months it will certainly have some effect in the ensuing assembly elections, as the poor and the common people are suffering with no hope of relief in the near future.
Leader Writer: Irengbam Arun
Source: Imphal Free Press


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