Aditya Sinha: Banking on middle-class patriotism

Across the nation people are queuing up outside banks like this one in Amritsar to withdraw cash or exchange old currency for new PicAFPTill Tuesday night there was approximately Rs 17 lakh crore in circulation of which about Rs 14 lakh crore was in 1000500 denominations The Reserve Bank of India has printed 40 per cent more currency since 2011 higher than the Asian average of 30 per cent something was fishy Prime Minister Narendra Modi attributed this to black money but also added terrorism and counterfeiting to the mix Terrorist financing officials estimate is to the order of Rs 150200 crore The counterfeiting estimates range from Rs 2500 crore as a parliamentary committee was informed in 2012 to Rs 400 crore by the National Investigation Agency NIA last year Terrorism and counterfeiting account for less than a drop in the bucket we can safely assume Modi referenced these reasons to consolidate middleclass support for demonetisationIncome Tax IT data estimates cash to form just six per cent of black money widely believed to be the currency for real estate transactions electoral financing and all levels of corruption Corrupt civil servants will hopefully be caught since November 9 people depositing more than Rs 25 lakh cash at banks have already been served IT notices The IT website will first of all show you on your PANbased profile how much cash you have deposited since demonetisationAllegations regarding electoral financing have been thrown about There is nothing surprising if the ruling party alerted its moneybags in UP which has an election early next year or in Punjab or Goa Such are the perks of being in power If the BJP is caught redhanded thatrsquos another matter Supporting an opposition party is no reason to whine that the BJP has hoodwinked everyone elseReal estate transactions where land rather than builtup property is boughtsold are most heavily skewed towards undocumented cash A real estate broker once revealed that cash received by sellers was often shown as agricultural income which is not taxed Thus it seems logical that some sort of broadening of the tax base should have accompanied demonetisation However only a lunatic would tax agricultural income before the UP Assembly election No one in India will ever provoke agrarian Indiarsquos ire by taxing itI was also told that laundering through a clutch of lossshowing dummy companies or through rural banking accounts will be used by New Yearrsquos Brokerage for laundering your money is at 25 per centThe real estate market has been in the doldrums for the past five years at least No one is buying because of absurdly high prices the market has favoured cashflush investors over endusers It has become desperate in Gurgaon on Delhirsquos outskirts which is akin to Indiarsquos Shanghai all glassandsteel and miles away from interior China or Bihar Distress sales on Sohna Road had reduced one propertyrsquos price from Rs 14 crore to Rs 90 lakh Everyone was earlier expecting in a yearrsquos time a 25 per cent correction in prices With demonetisation the recovery is now pushed back to early 2019Middleclass Indians standing for hours in queues outside of banks overwhelmingly support demonetisation not so much the poor It is like Swachh Bharat or the surgical strike across the Line of Control in Kashmir and the middleclass bleats about the need to ldquoclean up the systemrdquo One fellow then turned and spit on a shoprsquos shutter we stood in front of Those who did complain about having to queue to access their own hardearned money were chided by others who reasoned that if jawans could guard our borders we should not complain about banking inconvenience which is no longer predicted to be ldquo34 daysrdquo but an eternityspanning 21 days by the finance minister himself ldquoIrsquom not being paid to stand in linerdquo one youngster sullenly replied ldquoJawans get a salaryrdquoThe queues should tell you what the statistics earlier stated that most of our cash is not black but from the undocumented society We are not ready to become a credit society like America If the cash printed grew by 40 per cent it is more likely proof of a lsquotrickle downrsquo economic effect rather than of traders sewing notes into their mattressesOur daily domestic help was in tears She returned her Rs 3000 salary and asked my wife to change it for her even though she had an Aadhar card and even though most banks seem to have a separate queue for women My wife agreedLike the surgical strike or Swacch Bharat there will never be much concrete evidence of whether demonetisation did what it intended Yet the middleclass will continue to bleat their approval and if someone demands evidence they will be shouted down After all if democracy is to be lsquocleaned uprsquo then dissent requires a surgical strike Now pardon me I have to go stand in queueAcross the nation people are queuing up outside banks like this one in Amritsar to withdraw cash or exchange old currency for new PicAFPSenior journalist Aditya Sinha is a contributor to the recently published anthology House Spirit Drinking in India He tweets autumnshade Send your feedback to mailbagmiddaycom