By Garga Chatterjee
Among other things, the whole 500-1000 Indian Taka note ban or demontisation fiasco in the Indian Union has exposed the deep destruction of the Indian Union’s institutional structures that have set in during the present regime. This is not to say that such assaults have not happened before. After all, the declared Emergency of the 1970s was a Congress(I) operation and not a BJP one. But we live in these times and hence what happens in these times are more consequential and cannot be papered over by simple invoking crimes by others in the past.
Without going into the rights and wrongs of demonetization, which may be a matter of political opinion as well as partisan affiliation and loyalty, some facts are indisputable. Tens of lakhs of the poorest of people have lost their jobs as evidenced by reports from the All India Manufacturer’s Association, a huge spike in the demand for 100-day work scheme in rural areas and most starkly by the train-loads of Hindi area people making the reverse journey from urban centres to their own villages. Thousands of manufacturing and trading units have been closed down. States like West Bengal, where the unorganized sector is disproportionately larger and hence more dependent on cash based transactions, have been hugely hit. For people like me with stable high paying jobs, it is a mess. For people with low paying temporary work in the unorganized sector and farmers and farm-hands, it is a disaster. No amount of 24X7 propaganda about black money hoarding demons having sleepless nights and militant insurgents losing their sacks of cash can reverse the permanent damage and value loss that the Indian Union economy has suffered, some states much more than others.
But what has also taken a hit is the faith of people in institutions. The Reserve Bank of India is an autonomous organization that is in charge of monetary policy in the Indian Union. By manner of law, it is the Reserve Bank of India that has issued the notification that demonetized the Rs 500 and 1000 currency notes, making them worthless pieces of paper overnight. And the Reserve Bank of India governor Urjit Patel has been extremely reticent about the data based on which this decision was taken, the process in which this was taken and how this demonetization has progressed. There are various news reports that indicate that almost all of the demonetized cash value has been deposited back to the banks – something that the Reserve Bank of India has neither confirmed nor denied, thus creating an intelligence agency like shroud of secrecy over facts that should be in the public domain. These are facts that every citizen of the Indian Union has a right to know – because it is in the name of their sovereignty that the Indian Union and its constitutional structure exist. The Reserve Bank of India is not a divinely ordained institution. It has been instituted by the citizenry to carry out specific functions and it is answerable to them.
Some facts are on the table about the process in which the demonetization decision was taken. On November 16th, freshly after the 8th November announcement by Narendra Modi, Union Cabinet minister Piyush Goyal declared in the upper house of the parliament that the decision was taken the by Reserve Bank of India board, in its autonomous jurisdiction over monetary policy. This has been directly contradicted in the 7 page note submitted by the Reserve Bank of India to the Parliament’s Department Related Committee of Finance, where it is clearly mentioned that the Reserve Bank of India acted on the “advice” of the Union government on November 7th who asked it to ‘consider’ doing a note ban. Reserve Bank agreed the very next day and by evening Narendra Modi was on television! They are so contradictory that it points to one shocking inference– either we have Cabinet Ministers of the Union government lying in the parliament or we have the Reserve Bank of India governor lying to members of parliament and to the people. So whose idea was the demonetization decision? The huge erosion of faith in the autonomy of the Reserve Bank was evidenced by the letter sent by employees of the Reserve Bank to its Governor Urjit Patel, asking him to protect the autonomy of the central bank. Things are extremely grim. The states have been hugely affected by the demonetization and leaders like Mamata Banerjee and Arvind Kejriwal who stand for protecting the federal structure of the Indian Union have channelized the huge public discontent and suffering in the form of massive protests. But none of this has mattered. Because the states don’t matter to the central bank’s functioning, but unsolicited “advice” from the Union government does. This episode should also call for a relook at the constitution of the Reserve Bank of India, with an aim to federalize it, so that state government nominees are part of the board, to protect the states from the whims of a coterie sitting in New Delhi implemented through a spineless Reserve Bank of India leadership.
What we have is a pattern, where a set of technocratic and unelected bodies like the Niti Ayog and a small coterie around Narendra Modi are holding the whole republic at ransom, destroying institution after institution with their whims and diktats. Arun Shourie, a veteran stalwart of the 1970s anti-Emergency struggle best described the current state of affairs, that “it’s a Decentralised Emergency”, being implanted from Delhi by a “pyramidal Mafia State.’
Source: The Imphal Press
