The Modi government’s decision to push through the demonetisation exercise was blamed on a nefarious nexus between the Finance Ministry and the US government, keen to push a cashless economic experiment in a ‘region’ to see the feasibility of reducing cash transactions in the economies of Asia-Africa-South America and provide the American big finance capital a great opportunity to extract huge super-profits from transaction charges.
It was not surprising to see that the US government came out openly to support the demonetisation exercise of the Modi government at a time when the entire country was reeling under the weight of cash crunch and the opposition was out on the streets protesting against the anti-people measure of the government.
While the US government was all praises for the Modi government’s move, the former Treasury Secretary of the US, Lawrence Summers, who once recommended the abolishment of the higher denomination currency notes from circulation in the US, wrote in a blog post, which was cited by Bloomberg: “We strongly suspect that those with the largest amount of ill-gotten gain do not hold their wealth in cash but instead have long since converted it into foreign exchange, gold, bitcoin or some other store of value, …So it is petty fortunes, not the hugest and most problematic ones, that are being targeted.”
But there was a bigger game going on behind the scenes, an article by Norbert Haering on Global Research used facts and data, including suspicious press releases that were deleted from the USAID website, to prove the allegations that the Modi government took such a political risk of jeopardising the entire economy of the country by starting the demonetisation exercise only after it got a carrot from the US government and the big monopoly and finance capital of the West.
Despite tall talks of “surgical strike against black money” the information regarding the demonetisation exercise of the Rs. 500 and Rs. 1000, which happened to be 86 per cent of the cash in circulation prior to 8th November 2016, was leaked by the BJP leaders to the real black money hoarders and money launderers back in April 2016, when they got their unaccounted cash in big denominations converted into smaller denominations or got them stashed in real estate, gold, bullion, Forex, stocks, and bonds.
Over years the plan to bring more people in the banking system was a concern for the public sector and private banks of India, who are owned indirectly by the big foreign monopoly and finance capital. Despite the increase of private stakes in the public banks and adoption of a pro-corporate outlook, the banking sector failed to penetrate in the hinterlands and couldn’t bring the majority of the people in the banking net.
When Narendra Modi started his high pitched dramatic election campaign in 2014, which focused on the perception management of various socio-economic groups of the Hindu community regarding the BJP, he made implicit claims of bringing black money stashed in tax havens abroad and make the people “beneficial” from such inbound wealth.
During the same campaign, he twisted his words to assure the poor people indirectly that if the Modi government is elected to power it will distribute the ill-gotten wealth of the rich and notorious among the poor.
A classical socialist claim was then made by the far-right extremist, which hoodwinked a lot of people in believing that they will get Rs. 15 lacs each in their bank accounts and thus, when Modi government brought the Jan Dhan bank account schemes for the poor, a lot of people opted for opening up bank accounts.
As per rough estimates from Bloomberg, nearly 97 per cent of the demonetised currency returned to the banking system and there is still a window open until 31st March to deposit the money at RBI branches at its sole discretion. Though the RBI and the Finance Ministry refused to accept the claim but also refused to divulge any figures.
So if we accept the figures of Bloomberg and consider 97 per cent of the demonetised Rs. 15.4 trillion, i.e. Rs. 14.93 trillion, entering the banking system with a capping on cash withdrawal in a country where 97 per cent of the transactions happen over cash, then it doesn’t need special mention that the entire economy of the country is going through a tough time as only 25 per cent of the demonetised cash is replenished by the RBI until the beginning of December 2016. The figure could have gone up, however, it still looks impossible to reach to the pre-8th November stage.
We can see these banks, both public and privately owned, are sitting on huge pile of money that cannot be accessed once by the owners of the money. The cash rationing has left the bank transactions open through other channels like cheque or online transfers limited to a certain section of the society only.
In this case, the banks have pushed, along with e-wallet companies like PayTM, online transactions instead of cash and on their behalf, the government of India is not only spending billions from the public exchequer behind the futile “cashless economy” project.
Even if one has heard the New Year’s eve lecture of Narendra Modi, they could have easily assessed that the government is announcing tax sops to small and medium enterprises if they adopt cashless transaction practices and the government is also going to waste a lot of people’s money in paying service charge and commission to the e-wallet companies.
Now the banks and payment gateways are charging a very small amount depending on the amount of the transaction, however, as the signals are getting stronger, it seems like as soon as the Uttar Pradesh and other assembly elections get over, the banks and the payment gateways may increase their charges and commission to accumulate more profit from the country of 1.2 billion people.
Most of the Indian public sector banks were privatised since the beginning of the new millennia and most of the banks have stakes of corporations that are virtually owned by the foreign monopoly and finance capital. Over years the private banks in India too got their lion’s share of investment routed through different dummy and proxy investors by the foreign monopoly and finance capital of the US and its allies.
Big corporations, both Indian and foreign origin, took huge loans from the public sector banks and stopped repaying them. Their close connections with the ruling parties like the BJP and the Congress prohibits the banks from chasing them for the recovery of the loans as a bank would chase a farmer unable to repay his or her debts.
A report published by the Indian Express in 2016 showed that the public sector banks wrote off more than Rs. 130,000 crore of loans as bad debts, which according to the economic analysts, benefited the big corporate houses the most.
Now when nearly Rs. 14.93 trillion was deposited in the banking system within 30th December and as the banks are in no hurry to remove the cash withdrawal restrictions, the corporate sharks are again drooling for huge amount of loans and as the Finance Ministry and the RBI are in sync to reduce the interest rates in the new fiscal year, it’s anticipated that many corporate houses will get share of the pie as loans that they will never have to repay, thanks to the appeasement policies of the Modi government.
While the banking business in the public and private sector along with the e-wallet business shows sign of the boom in the forthcoming days, the investors, mostly foreign corporations owned by the US-based billionaires, will soon enjoy higher ROI thanks to the commission charges levied on transaction and withdrawal.
As the allegation of the US involvement in Modi’s demonetisation exercise became very clear with the evidence and proof presented by Haering in the article, the news became popular after it went through several social media groups and networks. The government of India and its “fringe” outposts managed by the RSS, kept denying any such link between the US government’s unit USAID and the demonetisation exercise.
Even though the Modi government and the entire toady mainstream media remained mum on the issue of the role that the USAID played in influencing the decision of demonetisation exercise, the report published in Global Research became viral and many media outlets started publishing reports by taking inputs from the article.
Still, the news of the US role in Modi’s demonetisation exercise is not known to many people, especially the common people who live outside the intellectual discourses of economic and political analysts and who are continuously fed manufactured news by the corporate media to ensure any ferment against the demonetisation exercise is not formed under any circumstances.
It becomes imperative for the free and critical media to highlight the plight of the economy of India in the hands of the Modi regime and expose the BJP government’s tie-up with the USAID and other institutions of the US government including the CIA, on whose direction and command the government is adopting anti-India and anti-national policies.