Swarajya Logo
Swarajya Logo
Politics States Economy Society Business Culture Infra Defence World Books Ideas Science Technology Heritage Archives Legal Movies Sports
  • Our Views
    Politics States Economy Society Business Culture Infra Defence World Books Ideas Science Technology Heritage Archives Legal Movies Sports
  • Magazine
  • Store

About Swarajya

Swarajya is a publication by Kovai Media Private Limited.

Swarajya - a big tent for liberal right of centre discourse that reaches out, engages and caters to the new India.

editor@swarajyamag.com

Useful Links

  • About Us
  • Subscriptions Support
  • Editorial Philosophy
  • Press Kit
  • Privacy Policy
  • Terms of Use
  • Code of Conduct
  • Plagiarism Policy
  • Refund & Cancellation Policy

Useful Links

  • About Us
  • Subscriptions Support
  • Editorial Philosophy
  • Press Kit
  • Privacy Policy
  • Terms of Use
  • Code of Conduct
  • Plagiarism Policy
  • Refund & Cancellation Policy

Participate

  • Contact Us
  • Write for us
  • Style Guide
  • Jobs

Stay Connected

  • Artboard 2 Copy 6Created with Sketch.
    Artboard 2 Copy 10Created with Sketch.
    Artboard 2 Copy 7Created with Sketch.
    Artboard 2 Copy 9Created with Sketch.
  • Andriod Logo
  • IOS Logo

Economy

DeMo Review: Why ‘Formalisation Of Economy’ Argument Won’t Cut Much Ice For Long

S MurlidharanWednesday, September 5, 2018 1:17 pm IST
Customers exchange old notes for new ones in New Delhi following the government’s decision to ban Rs 500 and Rs 1,000 notes. (DOMINIQUE FAGET/AFP/GettyImages)
Customers exchange old notes for new ones in New Delhi following the government’s decision to ban Rs 500 and Rs 1,000 notes. (DOMINIQUE FAGET/AFP/GettyImages)
Customers exchange old notes for new ones in New Delhi following the government’s decision to ban Rs 500 and Rs 1,000 notes. (DOMINIQUE FAGET/AFP/GettyImages)
  • Why the government cannot be seen to be buying time forever.
  • Jayant Sinha, the Minister of State for Civil Aviation, told a TV channel a moving story. A poor person from his Hazaribagh constituency told him with a touch of proud defiance: "so what if demonetisation inconvenienced me for days together; if I lost a goat, the crooks lost a buffalo, didn’t they?" People gloat when the other person loses both his eyes even in the face of they themselves losing one. They gloat even more when the other person is a wicked crook.

    Now the question is did they (the crooks) lose their buffalo? The Narendra Modi government seems to be taking heart from the fact that both direct and indirect tax collections have gone up post demonetisation (DeMo) and goods and services tax (GST), as a result of the formalisation effect the twin back-to-back measures have had on the economy. Therefore, failure to nab crooks’ black money doesn’t matter.

    To be sure, several objectives were listed when Prime Minister Modi announced to the nation as it listened to him with nervous excitement. But nobody can deny the primary objective was to neutralise black money, rightly deduced to be stashed away in high denomination notes – Rs 500 and Rs 1,000.

    Now, for Finance Minister Arun Jaitley and his officials to say that the main achievement of the cataclysmic exercise was formalisation of the economy doesn’t simply wash. Anticipating intense questioning by the discerning on the deafening silence on the main objective, Jaitley said as many as 1.8 million depositors of the demonetised notes into banks are under scrutiny. Well, the government cannot be seen to be buying time forever.

    Both during the demonetisation period when the deposit counters were open as well as during the operation of Pradhan Mantri Garib Kalyan Yojana (PMGKY) under which one could get away with a hefty tax of 50 per cent provided he put a further 25 per cent in a four-year fixed deposit sans interest, the government kept on admonishing the depositors – "our banking-IT software is capable of catching dubious deposits". But neither the PMGKY nor the admonition was taken seriously, with crooks blithely flocking to banks and depositing their ill-gotten wealth.

    Abhishek Manu Singhvi, the lawyer-cum-Congress-spokesperson, rightly points out that even if the dubious accounts are caught and assessments made, it will take almost 30 years for the assessments to take finality given the fact that appeals go right up to Supreme Court of India starting with commissioner (appeals).

    In the event, the government has had to settle for the second best argument – formalisation of the economy instead of denuding the crooks of their ill-gotten wealth through demonetisation. While talking heads may agree sagely with the formalisation argument if not alibi, those who sweated it out are bound to wonder whether their sacrifices were well worth it at the end of the day.

    Arun Shourie, the National Democratic Alliance-I disinvestments minister in the Atal Bihari Vajpayee government, has called demonetisation a giant amnesty scheme. Less charitable remarks have bordered on the slanderous – official money laundering scheme. Call it whatever, the truth is honest persons feel betrayed and shortchanged by amnesty and quasi-amnesty schemes. More so when stern and solemn anti-tax evasion measures are allowed to degenerate into amnesty schemes willy-nilly thanks to shoddy implementation and less than painstaking attention to nitty-gritty.

    The Modi government is perceived as honest despite the opposition’s desperate attempt to tarnish its image. Nothing has given the opposition a more potent tool in this regard than the official statistic that as much as 99.3 per cent of the demonetised currency notes have found their way back into the banking system. Khoda pahad, nikla chuha (dug a mountain to reveal a mouse, literally) is its taunt. It might assume a vicious edge in days to come unless the Modi government successfully completes the assessment of some of the major dubious depositors of the demonetised notes. Jewellers, petrol bunks and dubious hospitals are alleged to have played a no mean handmaiden role.

    The government would redeem itself partially in the eyes of the poor, who were taken in by its lofty claim of neutralising black money. This would require a quick but not a hasty job of assessment, not worrying about the final outcome on appeal for the nonce.

    Tags
    Narendra Modi
    Jayant Sinha
    Supreme Court of India
    arun jaitley
    Atal Bihari Vajpayee
    Arun Shourie
    GST
    Demonetisation
    Currency Notes
    Pradhan Mantri Garib Kalyan Yojana
    Formalisation

    Comments ↓

    An Appeal...


     

    Dear Reader,

     

    As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

     

    Our business model is you and your subscription.  And in challenging times like these, we need your support now more than ever.

     

    We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

     

    Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

    Get Swarajya in your inbox.


    Magazine


    Swarajya Magazine Cover Image
    Merchandise

    Merchandise


      Politics

      Modi's Pasmanda Outreach: PM Pledges More Health, Education Welfare Schemes For Muslims In Telangana

      Modi's Pasmanda Outreach: PM Pledges More Health, Education Welfare Schemes For Muslims In Telangana

      Bhuvan Krishna
      2h

      Cabinet Approves Free Ration For Next 5 Years, 16th Finance Commission, Drones To Women SHGs, Rs 24,100 Crore For Tribals

      Bhuvan Krishna
      3h

      Telangana: Congress MLA Feroz Khan Booked For Allegedly Offering Rs 1 Lakh To Voter Ahead Of Assembly Elections

      Bhuvan Krishna
      4h

      Economy

      In A First, Market Capitalisation Of BSE-Listed Companies Surpasses $4 Trillion Mark

      In A First, Market Capitalisation Of BSE-Listed Companies Surpasses $4 Trillion Mark

      Nayan Dwivedi
      5h

      Automobile Retail Sales Hit Record 3.793 Million Units This Festive Season, Surging 19 Per Cent YoY: FADA Report

      Nayan Dwivedi
      1d

      Public Sector Is Finally Beginning To Shine Under Modi's Ministrations

      R Jagannathan
      2d

      Defence

      Indian Navy's Ships Get Indigenous Firepower Boost: MoD Inks Contract Worth Rs 2,956 Crore For 16 Super Rapid Guns

      Indian Navy's Ships Get Indigenous Firepower Boost: MoD Inks Contract Worth Rs 2,956 Crore For 16 Super Rapid Guns

      Ujjwal Shrotryia
      3h

      Defence Ministry Set To Greenlight Proposals Worth More Than Rs 1.3 Lakh Crore For Acquiring 97 Tejas And Upgrading Sukhoi Fighter Jets

      Ujjwal Shrotryia
      5h

      Indian Navy's Second Indigenous Aircraft Carrier Proposal Gains Traction; Defence Acquisition Council To Take It Up Tomorrow

      Ujjwal Shrotryia
      7h

      World

      COP28 In Dubai: What To Expect As Global Leaders Set To Meet And Assess Climate Action Progress

      COP28 In Dubai: What To Expect As Global Leaders Set To Meet And Assess Climate Action Progress

      Nayan Dwivedi
      1h

      India Sets Up High-Level Enquiry Panel After US Shares Inputs On Nexus of Terrorists, Organised Criminals And Gun Runners

      Swarajya Staff
      4h

      Indian Professionals To Benefit Most As US Set To Launch New Plan For Work Visas In December

      Swarajya Staff
      6h

      Culture

      Kashi Tamil Sangamam 2023 To Be Held From 17 December To 30 December, Registration Portal Launched By IIT Madras

      Kashi Tamil Sangamam 2023 To Be Held From 17 December To 30 December, Registration Portal Launched By IIT Madras

      S Rajesh
      6h

      M P N Ponnusamy: A Nagaswara Legend Passes Away Almost Unsung

      K Balakumar
      1d

      Streamlined Repatriation: India-US Deal To Fast-Track Return Of Stolen Antiquities

      Swarajya Staff
      2d
      States

      infrastructure


      Amit Mishra
      1

      BHEL To Collaborate With EDF France On Jaitapur Plant Even As Nuclear Liability Issues Remain Unresolved

      2 Mins Read
      V Bhagya Subhashini
      2

      Mumbai Coastal Road's Promenade: One Kilometre Pilot Stretch Set To Launch In December

      2 Mins Read
      V Bhagya Subhashini
      3

      India's First Bullet Train Station In Mumbai Marks 15 Per Cent Work Completion, To Be Ready By 2027

      2 Mins Read
      Amit Mishra
      4

      Kerala: Third Chinese Ship Carrying Crane Docks At Vizhinjam International Seaport

      2 Mins Read