Modi-Mao Bhai-Bhai: Dose of Zedong Inciting Jan Dhan A/c Holders?

Modi inciting people in the name of Jan Dhan reminds one of Mao bringing misery to the masses, writes Abheek Barman.

How many times do you need to say “brothers and sisters” or “bhaiyon aur behno” as Prime Minister Narendra Modi did during his speech in Moradabad, Uttar Pradesh on 3 December? How many tropes do you need to justify a policy that could sink an otherwise healthy economy into recession?

The Reserve Bank of India (RBI), India’s central bank, normally the most sedate forecaster of growth, now pegs it at 7.1 percent – well below earlier estimates. The reason, as RBI and other commercial banks know, is a massive dryout of liquidity from India’s financial system – announced by Modi personally on TV all over India, at 8 PM on 8/11 and implemented from midnight thereafter – which could cripple an otherwise healthy economy.

Also Read: Note Ban’s Grim Outcome: Cash Crunch to Last Six More Months

Justifying Note Ban

Three weeks or a bit later, as the magnitude of the economic disaster began to dawn on Modi, he spoke in UP. Apart from the brotherhood and sisterhood part, what did he say?

“We had to stand in queue to buy sugar. We had to stand in queue to buy kerosene. We had to stand in queue to buy wheat. Thanks to those who ruled for 60 years, this country was wasting away in queues,” said Modi.

A Gujarati baniya, this gentleman said, "What I have done is to start a queue to end all queues."

Modi went on to tell poor villagers, holders of Jan Dhan (JD), earlier called regional rural bank (RRB) accounts, “Not to pay back any of the cash deposited in your accounts after 9 November.” Implicit in this was several things.

Also Read: Note Ban: Weak Imported Security Threads In Rs 2,000 & 500 Notes

‘Proxy’ Conspiracy Theory

Most of these JD or RRB accounts, administered by state-owned banks, were idle: rural India is under-banked and more than 80 percent of all bank branches or automated teller machines (ATMs) are in large cities. But between 9 November and 23 November, these JD accounts saw a surge in deposits. From Rs 45,636.61 crore on 9 November, holdings in JD grew 63 percent to Rs 74,321.55 crore.

Modi assumes that all this is cash deposited by ‘proxies’ to the poor, only to be recycled later into the economy. Where is the evidence to support his assertion? If there is no evidence, then what Modi proposes is financial anarchy.

If the ‘proxy’ conspiracy theory is true – it might well be – today, what Modi asks India’s rural poor to do, is to forcibly expropriate money that was never theirs in the first place, but were with landholders or moneylenders who pick up the slack in under-banked
rural India.

Also Read: Note Ban: Rs 200, NOT Rs 2,000 Notes Would’ve Ensured Cash Flow

Exhorting People to Steal

So, stealing from the relatively rich villager is official policy now. The next logical step is for a rural uprising – class war. Mao Zedong would rise from his grave and applaud.

After all, the Great Helmsman who steered China into economic catastrophe from 1949 to 1978, wrote, “Revolution is not a dinner party, or doing embroidery. A revolution is an insurrection, an act of violence by which one class overthrows another.”

So, we have to see Modi, a baniya, through the red lenses of Mao. And like Mao, his decision has upended the economy and led to misery for millions.

Across India, the Modi sarkar’s overnight scrapping of currency notes with a face value of Rs 500 and Rs 1,000 has chewed up persondays of productive work as people as diverse as household help and salaried professionals queue up for meagre, government-mandated rations of currency.

Also Read: ‘Extinguished Cash’ Now Meaningless to Judge Modi’s Demonetisation

Botched-Up Plan

Former finance minister Palaniappan Chidambaram reckons it will take India’s creaky note-printing agencies at least seven months – beginning 4 September, when former RBI boss Raghuram Rajan was kicked out by the Modi government – to replace the cash withdrawn from circulation. So that is April 2017 – much longer than Modi’s self declared 30 December deadline.

Others reckon the pain will last longer, maybe for 18 months or more.

Whatever the time limit, Modi’s ‘50 day’ schedule till 30 December is fast running down. As are the ostensible reasons behind this massive – and completely unexpected – demonetisation exercise.

Many reasons have been trotted out, from taking cash out of the hands of terrorists to taking ‘black’ money out of the coffers of India’s small middle class – but Modi’s new jargon, enunciated in UP, is revolutionary. In a sense that would warm the heart of Comrade Mao Zedong. Comrade Mao inflicted much pain on his fellow Chinese. He also left them with his words of wisdom.

“Long distance running is particularly good training in perseverance,” wrote Mao. Long distance queues at banks and ATMs, Modi will have us believe, are good for our moral and physical fibre.

Since 9 November, economists, analysts and policy wonks have struggled to understand the underlying motive of the Great DeMo, which has paralysed a nation of 1.33 billion people. Is ignorance bliss? Recall Chairman Mao: “To read too many books is harmful.”

(The writer is a Delhi-based senior journalist. He can be reached @AbheekBarman. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)

Also Read: Modi’s Current Challenge: Dealing with the DEMON in Demonetisation