Sub:- (i)- GOI repeatedly saying bank-deposits will increase through de-monetization (ii)- GOI facing credibility crises about abolition of black money & utilization of deposits (iii)- Abolition of black money expectedly becoming difficult due to reports of conversion through touts (iv)- The way de-monetization being enforced nothing less than squeezing & extracting blood of helpless economically humble predominant majority of India (v)- Banks unable to loan further as Rs ~ 6 Trillion is lost by banks (mostly PSUs) in NPAs (vi)- GOI is allegedly trying to get bank-deposits through de-monetization to give loans to big businessman / industrialists (vii)- GOI need not squeeze & extract blood of Indians in order to give loans to allegedly favorite Ambanis, Adanis, Essar, GSPC etc
In addition to abolition of black money, counterfeit currency and terrorist funding the increase in bank-deposits (with attended increase in economic activities and tax collection) is also being given by government of India (GOI) as the objective of present de-monetization of Rs 500 and 1,000 notes. As far illegal way of doing it by demanding ID of bearers of these notes it is mentioned at http://www.alwihdainfo.com/Open-petiton-to-Supreme-Court-to-stop-immense-fraud-by-GOI-RBI-during-demonetization_a44526.html .
As far counterfeit currency, for its abolition the GOI does not require to torture the Indians the way it is doing during the process of replacing the de-monetized currency (in which 6 persons have already died, many violent clashes took place across India, distress looting of shops and hours of queuing up before banks and ATMs, many times in futility). Rather normal replacement of bank notes in a period of a month or two would have served this purpose. As far terrorist funding, the former Finance Minister Chidambaram has rightly said in a press conference that it is overly exaggerated (hence does not warrant such oppressive de-monetization).
Regarding abolition of black money Chidambaram again rightly said that its efficacy / utility shall be judged (A) - By the ease with which demonetized currency will be replaced without inconvenience / harassment. On this count this program has already failed (B)- when GOI will publish the data about total de-monetized money, total de-monetized money deposited in banks, total black money recovered (by way of tax, penalty and forfeiture), total de-monetized money destroyed by its holder etc, hence we should wait up to first quarter of 2017.
But the way reports are appearing in media about touts converting black money into white by using people [especially youth (even women, in this age of huge unemployment) to convert (even by depositing in their Jandhan Yojana Bank Accounts) the amount of Rupees below two hundred fifty thousand (legally permissible limit without inviting any provision of Income Tax Act), - it is now any body’s guess that what will be fate of this black-money abolition program.
But what is most disturbing is the report which has appeared in social media quoting https://goo.gl/xFdr3u that - [with Rs. 6 Trillion as the NPA (Non-Performing Assets) or bad debt the banking system is not in a position to oblige the big corporate houses who are ALSO the major source of election funding for the politicians . One of the major hurdles in the path of bank funding and rescheduling of NPAs was the former RBI governor Raghuram Rajan. He was shown the door and replaced by someone who has, in past, been the President of business development in Reliance Industries and has also worked with Gujarat State Petroleum Corporation Limited (GSPC). The GSPC is a PSU floated by the govt of Gujarat which is under a heavy debt of the PSU banks to the tune of approximately Rs. 20,000 crore. A series of reports prepared by the Comptroller and Auditor General (CAG) of India has claimed that GSPC consistently misused its funds and allegedly favored private companies in the Adani, Reliance and Essar Groups, among others while the present PM Modi was the CM of Gujarat. Steeped in debt, the Gandhinagar-based GSPC is reportedly was sought to be bailed out through a “strategic partnership” with the Oil and Natural Gas Corporation (ONGC)].
There is nothing wrong if GSPC, Adanis, Ambanis / Reliance, Essar Groups are given loans by banks and other financial institutions (especially PSUs) if they are not defaulters about earlier loans. But even then if their financing is done by GOI by said squeezing & extracting the blood of Indians then it is a matter of great public concern.
Therefore in view of above mentioned it will restore the credibility of GOI about on-going de-monetization program if GOI gives a categorical assurance to the people of India that the bank-deposits gained out of current de-monetization will be given neither to any favorite businessman / industrialist of the present government and its party nor to any defaulter of NPAs
Hem Raj Jain
(Author of ‘Betrayal of Americanism’)