Author Archives: Lila

Modi Retracts DeMo Jail Penalty Day After Proclaiming It

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Any reputation for efficient management that Modi might have acquired has been permanently destroyed by the demonetization fiasco, which whiplashes between tragedy and farce.

Economic Times:

A day after approving an ordinance regarding punishment for those holding old notes in possession, government officials on Thursday clarified that keeping demonetised notes will not land you in jail, according to a PTI report. It also said that the minimum fine for holding old notes beyond March 31 will be Rs 10,000. “
[Lila: Down from 50,000 or 5x the value of the illegal notes.]

Govt Circulates “Green Shoots” and “Vaccination” memes

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In 2009, shortly after the colossal tax-payer-footed bank bail-out of  September 2008, the globalist media began to circulate a pernicious and fraudulent meme: the bail-out had worked, the economy was reviving.

I deconstructed this “green shoots” meme as a type of “verbal pandemic” at some length in this LRC piece.

Just a couple of weeks earlier, I had  deconstructed a literal pandemic – swine flu – as overblown and most likely a scare tactic in search of an audience.

The use of these memes is one of the prime ways in which the globalist cabal herds public consciousness in a predetermined direction.  Their use is a definitive signal that an elite psychological operation is in progress.

It is thus crucial to understanding what is going on when, post demonetization, the Indian government floats both these memes – “green shoots” and “vaccination.”

The effect of the memes is to connect financial bail-outs at tax-payer expense to public health crises mandating police-state measures.

In the leading organ of the globalist left in India, The Hindu, we find the following piece referencing Modi finance minister, Arun Jaitley:

Jaitley Sees Green Shoots After Demonetization (December 30, 2016).

Mr. Jaitley cited an upward trend in revenue collections and green shoots in several sectors such as life insurance, mutual funds, aviation, and petroleum.”

That the phrase is not a casual or accidental usage but a deliberate meme can be verified from its usage in previous years, also by Mr. Jaitley:

In the  2014 budget speech:

Finance Minister Arun Jaitley presented the Narendra Modi government’s first budget. Here are the highlights:

1. Two years of sub-five per cent growth has led to challenges to the economy

2. Green shoots of recovery seen in global economy.”

In 2015, almost to the year and once again in the Hindu, Jaitley saw green shoots:

‘Green shoots’

Jaitley said there are two indicators that can be termed as ‘green shoots.’ First, bad debts (non-performing assets) of banks have declined to 5.2 per cent as of March-end 2015 from 5.64 per cent at the end of December 2014.

Second, indirect tax collections grew by 46.2 per cent in April to ?47,747 crore, with excise duty collection logging over 112 per cent growth.”

A further indication that Jaitley’s usage of the meme is intentional and part of a psychological operation is the fact that  he has previously directly linked “green shoots” to the “war on terror”- another globalist propaganda term:

[Note: Terming the war on terror a propaganda term does not deny the existence of terrorism. It simply suggests that the way terrorism is described is misleading and propagandistic.]

“…if you see occasional green shoots or signs of recovery, that proves to be patchy at times and then it is overtaken by certain geopolitical factors which create global instability. What the ISIS has been doing in the last few months across the world, itself poses a new danger to civilisation and therefore it’s impact on global economy cannot be understated,” Jaitley said at an ASSOCHAM event here.”

The linking of demonetization to vaccination completes the resemblance of the Modi project to the Obama bail-outs:

Demonetisation is an effective anti-scam vaccine for corruption and black money and remonetisation is a part of anti-corruption strategy of the Government for the benefit of the common man as per the 2014 mandate, Information & Broadcasting  Minister Venkaiah Naidu said on Thursday. He highlighted the key ‘Achievements of the Government’ during the past two and half years.”

World-wide vaccination programs are a pet project of the Gates Foundation, the charitable arm of Microsoft mega-billionaire, Bill Gates, a prominent part of the globalist cabal.

As I’ve blogged here, the Gates Foundation representative in India, Nachiket Mor, was on the cabal on the RBI that pushed through demonetization on November 8 hurriedly, circumventing RBI rules and RBI officials. The Gates Foundation is behind both the “financial inclusion” program that has the stated goal of roping all Indians into debt and credit issued by the central bank via digital payment networks and the “clean India” project, which aims to link health in India to globalist initiatives actually intended to control and diminish population growth.

Gates has run afoul of Indian activists multiple times over his “negligent” vaccination programs:

…the World Health Organization, the Gates Foundation and two organizations funded by them, PATH (Program for Appropriate Technology in Health) and GAVI (Global Alliance for Vaccines and Immunization), have found themselves under fire, after a writ of petition originally submitted to the Supreme Court of India, by Kalpana Mehta, Nalini Bhanot and Dr. Rukmini Rao in 2012, was finally heard by the courts.

The petitioners submitting the petition stated:

“BMGF, PATH and WHO were criminally negligent trialing the vaccines on a vulnerable, uneducated and under-informed population school administrators, students and their parents who were not provided informed consent or advised of potential adverse effects or required to be monitored post-vaccination.” [2]

The Gates Foundation’s emphasis on vaccines followed on an original emphasis on birth-control, and, counter-intuitively, stems from it:

Bill’s dad had set up a dinner at Seattle’s posh Columbia Tower Club with the Program for Appropriate Technology in Health (PATH). While the meeting started with birth control—among other efforts, PATH taught Chinese condom makers to test their products before shipping them—Gates began consuming data that startled him. In society after society, he saw, when the mortality rate falls—specifically, below 10 deaths per 1,000 people—the birth rate follows, and population growth stabilizes. “It goes against common sense,” Gates says. Most parents don’t choose to have eight children because they want to have big families, it turns out, but because they know many of their children will die.

“If a mother and father know their child is going to live to adulthood, they start to naturally reduce their population size,”?says Melinda.

In terms of giving, Gates did a 180-degree turn. Rather than prevent births, he would aim his billions at saving the kids already born. “We moved pretty heavily into vaccines once we understood that,” says Gates.”

and

More heavily than anyone ever had—even John D. Rockefeller, whose Rockefeller Institute for Medical Research pushed many key discoveries in 20th-century virology—he changed the global dialogue when it came to ­vaccines, which a decade ago had ­become controversial because of now-­disproved autism fears.

[Lila: We should not perhaps be too sanguine about autism fears being  “now-disproved” ]

The first Gates vaccine donation, $100 million, ­directed at the United Nations and ­administered by PATH, focused on getting existing vaccines to kids. To celebrate the gift, Bill and Melinda hosted a dinner for vaccine experts at their 66,000-square-foot home on Lake Washington. After Gates asked his guests, “What could you do if you had even more money?” the room exploded with new ideas. That’s when he decided to blow up his original foundation and, in 1999, reconstitute it as the Bill & Melinda Gates Foundation, endowed with $21 billion, instantly making it one of the largest charities in the world. The endowment is now $36 billion, with $25 billion given away.”

Most tellingly, the route the Gates Foundation took to finance its projects was the notorious one of “public-private partnerships” – where risks and some of the costs are absorbed by the public sector, while the private partner takes all the profits by using the government as its marketing wing:

Drug companies wanted to immunize kids in, say, Afghanistan, but couldn’t count on demand that would be large and predictable enough to cover their costs. They faced the unappetizing choice of being humane or profitable.

So back in 1999 Gates traveled to Bellagio, Italy to hammer out a solution, along with Unicef, the World Bank, the UN, various pharmas and aid groups. The result was the Global Alliance for Vaccines & Immunisation, now called the GAVI Alliance, which Gates ultimately backed with a $2.5 billion pledge and personal will, exhibiting the tough-guy tactics, when necessary, that earned Microsoft the fear of its rivals and enmity of U.S. antitrust regulators.”

The final picture we are left with is of demonetization as a thoroughly globalist program underway in India, complete with calibrated propaganda terms from both the incumbent government (“green shoots”) and the opposition (“1 percent and 99 percent).

 

 

 

 

 

 

Modi Revives Iconography Of Delhi/Hindi Empire

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A fascinating and insightful look at the imagery and numerals on the new currency notes:

Reserve Bank of India has put up the designs of the new 500 and 2000 notes on its website. They confirm what many feared – that this design overhaul will be used to push certain iconographies that suit the incumbent BJP government. The difference between the old design and the new seem to be centered on three things: Hindi, Delhi and Narendra Modi.

The new currency notes introduce numerals in Devanagri script, the present script of Hindi. This was not the case in earlier version of the currency notes. Is it the case that the government thinks that only Hindi people should be able to read the numerals in a script they are familiar with while the rest of us, the non-Hindi majority, would not need to read numerals in our languages? Was there any complaint from any quarter than the stand-alone Arabic (or Hindu-Arabic as it is sometimes called) numerals in English script were not being able to do the job? Why was there no Hindi-Devanagri numeral before this? May be because it is actually unconstitutional and in contravention of a Presidential order. Article 343 of the Constitution of the Indian union states in no uncertain terms that, ““[t]he form of numerals to be used for the official purposes of the union shall be the international form of Indian numerals”. The only modification to this comes in the form of the 1960 Presidential order, which allows for “the use of Devanagari numerals, in addition to the international numerals, in the Hindi publications of the Central Ministries depending upon the public intended to be addressed and the subject-matter of the publication. For scientific, technical and statistical publications… the international numerals should be adopted uniformly in all publications”.

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The present Government of India and the Reserve Bank of India should explain how all-India currency bank-notes fall within the category of “Hindi publications of the Central Ministries” and how does the choice of Devanagari satisfy the clause of “depending upon the public intended to be addressed”. Does the Government of India, and RBI exist to serve only Hindi speakers? They might believe so. But non-Hindi linguistic groups are bound to Hindi people and to each other, only by the compact of the constitution and not by the Hindi imperialist whims or ideologies of the union government and its agencies. …..

A proportion of the currency notes could have had numerals in Devanagari, a proportion could have had Bangla, a proportion could have had Tamil and so on, based on population proportion of citizens using those languages. This is the model of the Euro, where it is a single currency, but there are specific variants to accommodate the diverse stake-holders. But doing that or even the present usage of Devanagari would need a constitutional amendment. The BJP, in its efforts to impose Hindi, is reopening the wounds of 1965 anti-Hindi imposition struggles that have not been forgotten by non-Hindi peoples. In this regard, the British had done a much better job, where numerals all many South Asian languages were given equal footing in font size, vis-à-vis English. Thus English, Hindi, Urdu, Bangla, Tamil, Telugu, Kannada, etc all had same font size numerals on bank notes as evidenced in the 10-rupee currency note of 1910.

The new notes also have the new Indian currency sign. That sign, derived from the “R” letter in Devanagari, was not chosen with the consent of the people. In my language Bangla and also in Assamese, the word for the currency unit is Taka or Toka. That starts with “T”. How can then the “R” sound be a general stand-in for all of us? And how did this get into the new currency note? How would have “R” people felt if a symbol for “T” sound were used instead? How is the sound of the currency name for Hindi people more important than the sound for Bengali or Assamese people? One might argue that it is called Rupees in English and that has R. That too is without consent of non-Hindi people and is a term handed down by the British. In Bengal, almost everyone grows up calling their currency as Taka, same as what they call it in Bangladesh.

GOI 1

Such words are not categories of nationalism but words of everyday use. By downplaying them, a whole people are classified as second class. While English is a foreign language for all, Hindi is also a foreign language for all non-Hindi people……. In a diverse, federal Union of States, like the Indian Union, the legendary Tamil Nadu leader and Chief Minister had laid down a principle that every citizen must share advantages and disadvantages equally. The usage of Hindi/Devanagari violates this fundamental principle of peaceful coexistence and cooperation as it is not equidistant from all stake-holders and give undue advantage to those for whom this is the mother-tongue and standard script. English provides that equal distance. The Indian union itself is the product of coordination and cross-linking of disparate ethno-linguistic nationalities mediated by English knowing elites of their respective groups. Most trans-linguistic discussions on political issues in the Indian union happen in English.

Thirdly, the actual proportion of area or real-estate on the currency note that is given to Devanagari vis-à-vis other language scripts has gone up. This is a very serious affair. The relative space and size of Devanagari-Hindi things vis-a-vis our non-Hindi mother tongues reflects exactly what New Delhi thinks of the rest of us vis-a-vis Hindi. And there is a temporal pattern to it that has gone from equality to inequality…… This marginalisation of non-Hindi languages has continued unabashed. The equal proportion to all South Asian languages in the 1917 bank note as well as the 1940 bank note was replaced by a currency series that continued for the longest time after the 1947 transfer of power that privileged Hindi over everything else. 1947 sadly marks the watershed year for the loss of status for non-Hindi languages. … The pace of that has visibly quickened with a militant edge under the present BJP regime in New Delhi.

GOI2

Thus, in RBI issued currency notes, Hindi-Devanagari words are big and are supposed to carry information. Non-Hindi language scripts are progressively smaller and are basically decoration with no practical use except for non-Hindi citizens to console themselves that “diversity” is alive, though certainly not kicking. …..Hindi mother tongue people form about 25 percent of the Indian population – that number too is arrived at after counting various linguistically non-Hindi languages as Hindi, because New Delhi orders so according to its political agenda.

Fourthly, the new currency notes do not have all the scripts of all the languages recognised in the VIII Schedule of the Constitution. Santhali is an example of an VIII Schedule language with its own Olchiki script that remains unrepresented in the currency note. Sanskrit with less than 20000 self-reported speakers is represented while Santhali with nearly 70 lakh speakers is not. The same goes for Meiteilon (Manipuri), which is an VIII Schedule language with its own script. The new currency note was an opportunity to include Santhali and Meiteilon but clearly Hindi and its expansion is the only driving force in the linguistic changes. People should know that the Indian union government considers languages to be a security issue! Which is why language groups and their scripts have to have their official stamp of recognition and approval from the Union Home Ministry.

…..As we speak, the union government is forcing small linguistic groups to adopt Devanagari as their official script and withholding recognition if they don’t agree. Thus, we find the absurd situation where speakers of Bodo, whose territorial homelands are not connected to any Hindi region, have been forced to adopt Devanagari. Thus, Hindi majority bureaucrats in the union government are killing the autonomous choice of a linguistic group in deciding their own future. And the government is shameless enough to celebrate International Mother Language Day.

The old currency notes tried to avoid location-based political symbolism except for the Parliament House in the denomination of 50 that arguably is for all. However, the Red Fort of Delhi in the new 500 denomination touches a raw nerve for many. The Red Fort was the political headquarters of the Mughal Empire for a long time.

[Lila: To me, this is more proof that Modi is actually posturing when he engages in sabre-rattling about Islam. One notices that he is quite obsequious to the Saudi ruling class…..the NWO uses Islam as a proxy for its own goals, witness the use of Islamic migrants to spearhead a movement to deconstruct European culture.]

Indian union came into existence in 1947. It is not a successor state to the Mughal Empire. The Red Fort is a sign of pre-British Delhi-based imperialism, signifying the power of imperial invaders who attacked the countries of Bengalis, Marathis, Axomiya, Odiyas and many others. Our ancestors resisted such invasions but Delhi won by brute power. Imperial Delhi ruled by posting mostly Hindi/Urdu speaking military people in our homelands…….

The use of the “Swachh Bharat Abhiyan” (Clean India expedition) logo accompanied byits Hindi slogan in Devanagari script crosses all limits of propriety. Never before has a government put one of its own schemes on something as non-partisan and common as a currency note. This mischief would basically result in an advertisement of the present government for all times to come, till these currency notes are withdrawn. This is certainly not illegal but not all shameless things aren’t illegal. This starts a very unhealthy precedent. Now, nothing stops any later day union government to use currency notes as their pet scheme advertising billboards. The abuse started earlier during the Congress regime with the use of the face of MK Gandhi, who was associated with a particular party that is still in business and were opposed by other parties who are also still in business.

Narendra Modi announced the new currency notes after the 500-1000 demonetisation announcement. His address was in Hindi, without any subtitles and then in English, with Hindi subtitles. So, the union government does care whether Hindi speakers comprehend the English speech but doesn’t care whether the majority of the citizens, that is, non-Hindi-English speakers understand anything at all. This imperial attitude, that treats a majority of the citizens as second class, was furthered by all PSU (that is New Delhi controlled) banks that mostly did not care to print any information for the public in their mother tongues. Last heard, the new currency notes do not match the structural specifications of the ATM machines all over. Since the top-down imposition of currency notes by New Delhi is sacred, all the ATM machines have to be structurally changed to match and fit what New Delhi has produced. “

Petition For Inquiry Into Death of Former TN Chief

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Many of us in Tamil Nadu have been wondering about the death of former Chief Minister, the hugely popular but autocratic ex-film star and dancer, Jayalalitha.

Known as Amma, the charismatic leader had been arrested on “disproportionate assets” charges at the time she was admitted to hospital for dehydration.

She seemed to have got better but was suddenly sent back to ICU for a cardiac arrest, to which she eventually succumbed.

The unexpected relapse and the secrecy around her end have fueled speculation about foul play only aggravated by the BJP government’s shockingly militarized tax raid on the TN chief secretary whom she had directly appointed. Now, cases have been filed to open an inquiry into her death:

The former Tamil Nadu chief minister died on December 5 and not satisfied with the authorities view about the cause of death, a petition was filed in Chennai High Court by AIADMK cadre seeking 3 member bench to investigate Jayalalithaa’s death. The petition is to be heard tomorrow. Jayalalithaa, popularly known as “Amma” among her supporters, breathed her last at Chennai’s Apollo Hospitals on December 5 where she was admitted on September 22 with fever and dehydration. Last week too, Chennai-based NGO, filed a Public interest Litigation (PIL) in the Supreme Court that raised doubt over the circumstances in which Jayalalithaa died.”

Defects In New Notes Enable Counterfeiting

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The new $500 rupee notes are reportedly defective:

In its hurry to meet the demand for new notes, the Reserve Bank of India has made major errors which can have serious consequences for the demonetisation exercise. The gaffe — RBI has printed two variants of the new Rs 500 notes.

According to a report in The Times of India, the newspaper has seen at least three case studies where the new Rs 500 note varied from each other. According to one customer quoted in the report, Gandhi’s face has a more than visible shadow. Apart from this, he has pointed to alignment issues with the national emblem and also serial numbers.

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Reuters

Representational image. Reuters

Another Mumbai resident has told the newspaper that the colours of the notes he got were different. The report has cited one more such instance of variation.

Meanwhile, a RBI spokesperson has termed them as “printing defects” that have propped up because of “the current rush”. She has also said people can still freely use it for transactions or even return it to the central bank.

One thing is for sure: the same note with different features would mean confusion for the common man. It will be easy for the ‘experts’ in counterfeiting to cash in on this confusion.

How is the common man to know whether the Rs 500 note he has is indeed original or fake? It has to be remembered that the fake note circulation has been rampant in India despite the RBI’s frequent notifications on how to detect such notes.

Clearly, the awareness level among the general public about the security features of currency notes is very low. Notes with slight variations in features will only add to the confusion about the features.

Announcing the decision to withdraw Rs 500 and Rs 1,000 notes and issue new ones on 8 November, the prime minister had said that the move was aimed at destroying the counterfeit racket, ending terror funding and also stop black money generation.

If the haste has resulted in errors that will only facilitate counterfeiting, then it will kill the very objective of the demonetisation exercise.

[Lila: I beg to differ. It is very clear to me that the objective of demonetization was to attack and destroy the cash economy and facilitate further such attacks, requiring more and more digitalization and police state measures.]

Interestingly, the RBI had published on its site the security features of the new Rs 500 notes before the notes came into circulation.

It will be better for the RBI to find some practical solution to the problem before any damage is done.”

The defects in the news notes, added to the introduction of Rs 2000 note, as well as reports of new types of black markets emerging in relation to the note-ban, substantiate my theory that note-bandhi is a weapon OF the counterfeiters and of the black money of the global cabal.

It is intended to be used against economic and political opponents SELECTIVELY.

Thus, income tax raids have become a tool to crush selective mafias.

Most fascinatingly, THE ENEMY IS THE HINDU. 

This underscores once again that the elevation of Hindi and Delhi is an elevation (by the global corporatists behind Modi) of language and location, but not of Hindu religion and culture.

It is an elevation of the middle-class Hindi- speaking constituency of the BJP , not of Hinduism.

The ban on notes was intended to crush the black money channels of the political and economic competitors of the globalists.

But, it was also intended, it seems, to facilitate money-laundering and counterfeiting by the current government and its friends, hence the repeated back-tracking and confusion; the defective counterfeit detection machinery; the pressure placed on the banking system.

We saw the same sort of selectivity during the 2008 economic collapse in the US.

At the time, what the major media termed a bail-out and transfer of toxic assets turned out to be a form of inter-bank cannibalism, with the tax-payer footing the bill.

Something similar is at work here.

I firmly believe that the notes being inserted now will be counterfeited and that will compound the confusion about numbers coming from the RBI.

The chaos will make the insertion of excess notes very easy.

We could then have massive inflation, despite inflation-targeting policies on paper.

This will be more economic and financial war…terror…brought to the aam admi in India.

List of NGO’s banned in India

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From Karmayog.org:

Blacklisted NGOs

The 600 non-governmental organizations banned by the government up to March this year were funded by the Council for Advancement of People’s Action and Rural Technology, which works as a liaison between the government and NGOs. The council formulates projects and selects NGOs that can implement them. It also funds projects proposed by NGOs in different states, to take care of various development-related tasks. The blacklisted NGOs will not be allowed to start functioning again.

Andhra Pradesh (175), Bihar (123), Tamil Nadu(71), Uttar Pradesh (69) and Rajasthan (31) are the top five states where the blacklisted NGOs are based. Karnataka (22), West Bengal (21), Delhi(21), Haryana (20), Orissa (19) and Maharashtra (19) are in the top 10 states.

The full list of Blacklisted NGOs is at Map & State wise List of Blacklisted NGOs .”

I have a mixed to positive reaction to this. On one hand, a lot of NGO’s are certainly subversive agents of the globalist cabal.  I also question why they should direct government policies and projects.

On the other hand, a blanket banning of NGO’s seems to thrown the baby out with the bath-water.

Again, there is need for looking at things on a case-by-case basis, instead of going in for broad, sweeping policies that damage the good actors along with the bad.

In addition, top-down NGO’s seem to be a kind of contradiction in terms. The whole point of being non-governmental is missed when the NGOs act WITH the central government, rather than independently of them, or at least, only with local governments.

 

2004 McKinsey Report: Indian Informal Economy Dangerous

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The roots of DeMo are deep in the globalization project.

The outsourcing agency responsible for the opening up of the Indian economy to Western interests, often in the most predatory fashion, was McKinsey and it was McKinsey that was bent on regulating and taxing the informal sector in India as far back as 2004.

Most tellingly, one of the reasons it gave for the need to introduce a Goods & Services Tax was the information such a tax would give on those businesses.

In business, information is money. Taxes thus become a way to subject rival businesses to surveillance and theft. The GST is next on Narendra Modi’s agenda, proving once again that the whole demonetization scheme is nothing more than the next step in the globalist project.

As a 2004 McKinsey report titled The Hidden Dangers of the Informal Economy put it pithily, “Informal companies evade fiscal and regulatory obligations, including value-added taxes, income taxes, labor market obligations (such as social-security taxes and minimum-wage requirements) and product market regulations (including quality standards, copyrights, and intellectual-property laws).” So far, governments in India have turned a blind eye to these illegalities, not least because they were worried about the consequences on employment and on the economy if they decided to enforce the rules. But it seems the present government not only wants to change that policy, but also wants to force the pace of change.

It is, of course, a laudable objective and the decision to force it through is a bold move. The big question though is: will it work? The McKinsey report is very critical of the informal sector, because its avoidance of regulation and taxes gives it an unfair advantage over firms in the formal economy, who are unable to increase their market share despite being far more productive and efficient. The report wants governments to start enforcing the rules against the informal firms, so that the formal sector benefits.

Significantly, it says value-added tax is a good place to start, since it enables the government to gain information about the informal firms and then go after them. It’s no surprise then that the government is trying to push through a comprehensive goods & services tax (GST). And that’s not the only place where the government seems to be heeding McKinsey’s advice—the report also says, “Another way of improving enforcement is for governments to partner with payments providers such as banks and credit card companies to increase the number of monetary transactions accurately recorded by the collections system and thus to raise the quality of the data available to tax enforcers.” The government’s push to a digital economy is precisely on these lines.

The expectation is that the short-term pain will lead to long-term gain. The benefits are expected to come from more tax revenue collected, which can then be used by the government to provide sops for the masses. The coming budget, for instance, is expected to echo this approach. The benefits are also expected as more firms join the formal economy, with access to funds and technology. The hope is that informal businesses will transform themselves from being the dirty underbelly of Indian capitalism into respectable, tax-paying, suited and booted members of a sleek, productive and bourgeois modern India.

Will the audacious gamble succeed? The McKinsey report didn’t think that informal firms could change so easily. It pointed out that informal businesses tend to structure their supplier and customer relationships in ways that make it difficult to go above board later, that customers of an informal firm come to expect very low prices, and many would go elsewhere if it transformed itself into a formal company and had to raise them. Indeed, the report said, “The idea that informal businesses might grow and join the formal economy is therefore a myth.”

Many firms in the informal economy would cease to be competitive if they are exposed to the full brunt of taxation and regulations of the formal economy. A 2014 paper by Rafael Porta of the Tuck School of Business and Andrei Shleifer of Harvard University, published in the Journal of Economic Perspectives, concluded thus: “we are skeptical of all policies that might tax or regulate informal firms. Rather than encourage informal firms to become formal, such policies may have the effect of driving them out of business, leading to poverty and destitution of informal workers and entrepreneurs. The recognition of the fundamental fact that informal firms are extremely inefficient recommends extreme caution with policies that impose on them any kind of additional costs.”

In other words, shock therapy such as demonetisation could very well turn out to be counter-productive. Instead, Porta and Shleifer say the cure for informality is economic growth. The evidence shows that informality declines, albeit slowly, with development. An 2009 OECD paper on Informality and Informal Employment also came to the conclusion that policies that make it more difficult for informal firms to carry out their activities and stricter enforcement of laws and regulations “have contributed to increased poverty and vulnerability by pushing already vulnerable groups of people into even more difficult situations.” What the government should instead aim for is expanding the formal sector, by making it easier for firms to operate there. But that is easier said than done and the record of the formal sector in creating jobs has been dismal.

The saving grace is that much of the talk about a transition to a cashless economy will remain just rhetoric. It’s also likely the government will soon realise that forcing the pace of change on the informal economy carries with it huge costs and it will opt instead for less ambitious, less intrusive methods.

Indian Bankers Revolt Against Central Bank

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Indian bankers are demanding the resignation of Urjit Patel, the RBI governor, who has been silent about the extraordinary measures taken on his watch:

“Holding RBI Governor Urjit Patel responsible for ineffective handling of the crisis post the demonetisation drive, All India Bank Employees Association vice-president Vishwas Utagi on Wednesday said that bank unions are adamant about their demand for the former’s resignations as well as lockdown of the apex bank.

Questioning the failure of the RBI as the regulatory system, Utagi said that Patel, who hasn’t uttered a word till now, should resign with immediate effect.

“Since two weeks, the bank employees are working from eight in the morning till midnight including weekends. Still, there are truckloads of work to do. There has been absolutely no cooperation from the RBI’s side,” Utagi told ANI.

“It added to the mess by banning cooperative banks from exchanging old notes or accepting deposits,” he added.

Stating that the present situation is a clear mess, Utagi further said that there have been one million employees at various banks who are working day in and day out in a situation characterised by a shortage of cash counting machines, fake notes detection machines and manpower security personnel.

The All India Bank Employees Association vice-president’s assertion come as a united opposition is cornering the government in Parliament and demanding Prime Minister Narendra Modi to explain the rationale behind imposing such a decision.”

 

Massive Fines and Possible Jail For Holding Old Notes

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This gets worse and worse.

Now, a new RBI (Reserve Bank of India) ordinance (the 61st on this issue) proclaims that people who hang onto the old notes after the deadline of December 30, will be faced with a minimum penalty of Rs. 50,000 (half a lakh or about 735$) – a sum that is enormous in terms of Indian per capita income…..and will be guilty of a crime punishable at the municipal level.

What’s the real reason for this?

Well, since one of the main reasons for this ban was to ensure that Indian banks, especially the State Bank of India (now one of the top 50 largest banks in the world), were sufficiently recapitalized so that the loans could start flowing again. This, after the ratio of non-performing loans (mostly to rich industrialists and developers whom Modi shows not signs of penalizing) rose too high for comfort.

Since most of the money declared illegal has been deposited appropriately, demonstrating that they were all largely legitimate cash holdings, Modi has had to find a way to make this bizarre financial experiment/attack look at least faintly rational.

He also has to make sure any remaining notes do not find their way back into the system and constitute a claim against it.  Penalizing old-note-holders and making their holding itself contraband is the solution, it looks like.

India Cash Lock-Down To Last Into Late 2017

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How is this not economic warfare?

Nilakantha Rath at Livemint:

My latest informal information about the capacity of the four presses is: The two government presses together can print 18 million pieces a day and the two RBI presses can print 43-45 million pieces a day. Let us assume their capacity at 44 million pieces a day. This is significantly smaller than the 100 million pieces per day capacity assumed by former Union finance minister P. Chidambaram. I stick to my estimate.

Let us assume that the printing of the new Rs2,000 notes started in the two RBI presses in Mysuru and Salboni in early September. These two presses together can print 44 million pieces a day. So, if they were to print these every day, except Sundays, then a total of 3.43 billion Rs2,000 notes can be printed in 78 working days, which is 13 working weeks, or three months, from the beginning of September—that is, early December.

According to some reports, the design of the new Rs500 note arrived at the Nashik printing press in the beginning of November and printing started soon after. However, within three weeks, RBI found defects in the new note. So, the printing of the new Rs500 notes was shifted to the RBI press in Mysuru. Therefore, there was only one RBI press printing the Rs2,000 note, in Salboni, from around 21 November.

From this day, only one press would have been printing the total of 800 million notes. That would require 10 more days. So, by around 10 December all new Rs2,000 notes, valued at Rs6.86 trillion, should have been printed. And before the end of December they should be available in the market.

But as of today, the total value of new notes put into circulation is said to be just above Rs5 trillion. This implies that, apart from the lag involved in putting out the newly printed notes in the market, printing has been slower than assumed above.

Now let us turn to the new Rs500 notes. Exactly 17.17 billion pieces of these new notes have to be printed. Assuming that the printing of these notes started in the two government presses and the one RBI press from 21 November, the amount printed by 10 December (when the fourth press would also take up this work) should have been 680 million notes (at 40 million per day x 17 working days). From 11 December, printing of the new Rs500 notes could start in all the four presses. The work of printing the remaining 16.49 billion notes should take 266 working days, that is, 45 weeks, which is seven weeks short of a year. So this work will only be over by the first week of December 2017.

There was hope that a significant part of the old notes would not come back to RBI through banks. But the latest data on the return of old notes to banks appears to belie that expectation.

In light of the slower-than-expected flow of the Rs2,000 notes, which should all have been in the market by now or in a few more days, there is reason to doubt the speed of printing assumed in this calculation. We have not taken into account the possibility of breakdown of the old presses in Nashik and Dewas, holidays other than Sundays, and other delay-causing circumstances. There is also the need to print Rs100 notes and even notes of lower denomination.

Even by the end of May 2017, only about half the number of Rs500 notes will have been printed. This means, only a little over Rs9 trillion worth of new notes, in place of the more than Rs15.44 trillion in old notes, will be available in the market. This is about 59% of the total value of high denomination notes taken out of circulation. That surely does not imply any great easing in the cash availability situation by the end of May 2017.

The shortage of currency has caused a loss of income, employment and the ability to spend from one’s income/savings for a wide section of the population. In Mathura and Surat, the country’s two major textile centres, nearly half the powerlooms are closed and many workers have reportedly gone back to their villages. The same is reportedly the case with leather units. Indeed, this is so for a wide range of small industrial units across the country.

There is a shortage of cash with farmers at the beginning of the rabi, or winter crop season. The end of the kharif (summer crop) season has found traders unable to buy different farm products from farmers due to a shortage of cash. And the farmers, with little income in hand, are unable to repay loans. The banks are unable to help. Small traders are struggling to find ways of meeting customer needs without cash. It is difficult to assess the all-round distress in employment and income as well as consumption.

Can digital transactions help? According to the RBI, there were 26.3 million credit cards and 712.4 million debit cards in the country by the end of August this year. This is a sizeable number. But, apart from cards held by offices and shops, there are people with multiple bank accounts who have more than one such card each. Many members of one family would also be having such cards.

But the most important thing is that many cardholders use the cards to withdraw cash from their bank accounts. Think of the long queues at ATMs after 1 December and one will realize the main purpose for which most people use their cards. For the bulk of the non-cardholder population and even for those with cards, cash is very important.

All this will get reflected in a lower gross domestic product (GDP) at the end of this financial year. That situation is not likely to become normal before the middle of the next financial year. The hope of a substantial part of the old currency not returning to banks has been belied. So, no new currency can be borrowed from the RBI by the government in its place. The indirect taxes of the states and the centre are already showing signs of decline. The total budgetary situation does not appear rosy at all.

A cool consideration of the above facts will show us clearly why former prime minister Manmohan Singh called this “strike” “monumental mismanagement”. Whom shall we blame but ourselves!”

Lila: Who is “ourselves”? The hapless population which had nothing to do with it?

The RBI staff, who apparently were shut out of the decision?

The government, which was informed after the fact?

Or was it Modi, a small group of conspirators and the global cabal that bribed and backed those conspirators to implement a black-operation equal to 9-11 that has brought financial and digital dictatorship to India.