We’ve all heard by now how the disaster of demonetization has pushed India’s economy into a tailspin. To add to the woes, there was the “hasty GST”, which started out as yet another Rajiv Gandhi dream, and then was put in place on July 1, 2017, merely 7 years after Dr. Manmohan Singh’s government set April 1, 2010 as the deadline for implementing it.
As Modi has found out the hard way, you can’t rush big things. You have to space them out like the Gareebi Hatao promise from 1971. Or the Sardar Sarovar dam, for which Nehru laid the foundation stone in 1961, but work didn’t even begin until 1987.
Among the many disasters caused by Modi, I thought I would set the record straight by writing about a topic that has been discussed very little : the adverse impact of demonetization and GST outside our borders, specifically on China.
The following event went largely unnoticed, although it came so close on the heels of Modi’s now infamous decision to demonetize Rs 500 and Rs 1000 currency notes on Nov 8, 2016.
I feel it is my national duty to speak up now, albeit a few months late. Or else all Indians and Chinese will have to again see Gareebi from close quarters … something they have never done since Indira/India Gandhi removed it in 1971.
As you can see in this Bloomberg video, the exports of India’s peers have sadly been in sync with India’s, showing the depth of the pain caused by Modi’s surprise move.
While China was still reeling under the impact of demonetization, the second blow came in the form of “hasty GST”. Within a few months, the mounting economic and financial risks became too much and the Chinese had to face an insulting downgrade for international rating agencies.
For the Chinese, it was most likely the Modi-Xi meeting at the BRICS summit that became the straw that broke the camel’s back, leading to the downgrade.
One more ominous sign was when the difficult economic situation forced the Chinese government to abandon development projects, such as a road in Doklam.
As a result of this demonetization induced slowdown, the Chinese government has had to undertake several diversionary measures to take public attention away from the economic situation.
For those who might be interested in participating, the Popular Front of India (PFI) and the CPI(M) will be organizing tonight a #NotInMyName candlelight march from JNU to Xinjiang. An eminent ex-Vice President is expected to join as well on a journey to go back to his roots.
This outrage is only the latest in a series of measures that the Chinese government has had to take to focus majority anger away from the economy towards a perceived internal enemy. When the real story, of course, is that Modi sarkar is turning a blind eye to the suffering of young job seekers.
For the Chinese, the need for finding an internal enemy in Uyghur Muslims is further increased by the fact that Modi sarkar is failing both on the domestic and the international front. Pro-BJP outlets such as Global Times are now reduced to begging the Chinese public to “properly understand” disputes and remain “cool minded” when dealing with neighbors instead of reacting emotionally.
Just read the dovish words… almost mocking the Chinese public for demanding a “tougher stance”, asking them to observe “patience” and “somber judgement” instead.
Compare it to the fire breathing Global Times from 2 months ago and you know how deeply the hurt of demonetization has crippled the dragon.
We must stand up NOW and demand that there be an end to this organized loot and legalized plunder by the government. For this, we have to put back in place the 97.5% top income tax rate that the wise Dr. Manmohan Singh put in place during the 70s when he was Chief Economic Adviser to the Finance Ministry. You can look around on Youtube for his remarkably prescient speech where he explained how a 97.5% income tax rate has the potential to add as much as 2% to India’s GDP growth.
I don’t want to sound too nationalist for fear of being seen as intolerant, but I must say that if you do not speak up now, you will be failing your national duty. And for what it’s worth, you will be failing your international duty as well.
Abhishek Banerjee is a math lover who may or not be an Assistant Professor at IISc Bangalore.