PM's speech proves note ban failed to achieve its objectives

At the turn of the year, Prime Minister Narendra Modi vowed to stand by honest Indians. In his address, he also promised to isolate the dishonest among them. His 50-day long demonetisation move was also supposed to do this. Yet, he was not in a position to identify the dishonest, who are obviously far too fewer than the throngs that swelled the bank queues until the other day.

Demonetisation has virtually failed to achieve its objectives. Its broad sweep had put the shrewd and slippery suspects among a vast sea of people where the chances of former’s finding a cover or getting lost have been quite high; and, thus, they remain elusive and safe from the clutches of the law at the end of the demonetisation drive. It may take months of sifting through crores of bank transactions by both tax officials and bank staff to narrow down upon and identify them. And even then, the findings may at best bring out a fraction of their actual misdeeds.

Thus, the bland fiat to demonetise higher value currency of Rs 500 and Rs 1,000 has turned out to be an opportunity rather than a threat to the unscrupulous and hardened tax evaders. Often their money has safely landed up in their bank accounts through the period of demonetisation. The reason behind such impunity lies in the old story that invariably tells that the law scares mostly the law abiding and it seldom deters potential violators.

The prime minister himself somewhat acknowledged this when he said in his address on the new year’s eve, “I wish to share some information with you which will either make you laugh or angry. According to information with the government, there are only 24 lakh people in India who accept that their annual income is more than 10 lakh rupees. Can we digest this? Look at the big bungalows and big cars around you. Do you not feel that for the good of the country, this movement for honesty needs to be further strengthened?”

So, far from being a 50-day affair, the battle against black money has to be a much longer process. This also tells that taint can be stuck not only upon cash but its tar can also conspicuously be on cars, bungalows and many other similar high value possessions though missing the government’s attention before and, thus, escaping Modi’s `cleansing rite’ for the time being.

Yet, such large scale impunity does not come without the complicity of those who are tasked with enforcing the law under successive governments. The political class forming one government after the other both at the Centre and in the states has for long prospered by bending rules, offering favours, raising an army of middlemen and cronies and giving birth to a new genre of wealth under what is called crony capitalism. Thus, money has been passing from honest hands to dishonest and the blessings and patronage for this have been coming from higher echelons of power and influence that cut across political, social, ideological and religious divides.

Seen in this backdrop, the task to unearth black money and make quick recoveries should be put in the command of a committee of present and former judges of the Supreme Court and high courts. And they should be assisted by a team of investigators of their choice from the law enforcement agencies of the government. A special investigation team headed by a retired Supreme Court judge M B Shah is already in place. It was formed in the wake of outcry against illicit wealth stashed by Indians in foreign banks and other tax havens.

So far, the Committee has given five interim reports where it has also suggested ways and means of curbing black money. Either the mandate, powers and size of this committee should be widened or a new committee be formed with economists and experts also on board to look into the entire gamut of issues related to black money and to suggest precise steps for its recovery without causing the kind of disruption that marked the just concluded 50-day long demonetisation exercise.

Bypassing RBI
Critics of Modi’s move have pointed out bypassing of Reserve Bank, experts, economists and Parliament through the Cabinet  decision to scrap old currency notes. But ideally, this should have been referred to Justice Shah Committee by the government for his opinion at least and to keep him in the loop before being put before the Cabinet and finally resorted to tackle black money so that it could have become part of the overall strategy to fight the menace that the committee has been dealing with ever since the present government took over.

Moreover, Modi had come to power riding the anti-corruption wave that was built up around creating the quasi-judicial institution of Lokpal or a public ombudsman. Sadly, the central government is yet to appoint Lokpal. In the absence of an institutional mechanism and efforts to devise and put them in place, the battle against corruption generating black money has generally been becoming a bravado instead of gaining teeth and substance.

This also reminds of and adds to the shabby way the government has been treating the issues related to the autonomy, independence and sphere of work of judiciary and semi-judicial bodies. Merrily running its own writ in an exclusive brand hunting way as borne out by the move to demonetise higher denomination currency notes that finally failed to yield any substantial amount of black money has given way to political blame game among parties.

This has not only wasted the last winter session of Parliament but also badly hurt the possibility of a broad consensus for taking the country into a new era of honesty, accountability and transparency despite this being so much aspired by the prime minister in his address at the beginning of new year.

(The writer is a Delhi-based independent journalist)
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