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PM Modi does a Vajpayee, launches ‘N-strike’ on Black Money | Latest News & Updates at Daily News & Analysis


Prime Minister Narendra Modi’s ‘surgical strike’ on black money – the scrapping of Rs 500 and Rs 1,000 notes – was kept a highly guarded secret, to the extent that even his senior cabinet ministers were kept out of the loop. The only message to scribes in the late afternoon was to remain in the vicinity of the Capital, as some announcement was in the offing.

The announcement sent the rumour mills into a frenzy. Even minutes before PM’s address, the speculations in the corridors of power was that it would be something about giving a tough message or announcing some punitive action against Pakistan.

On the day before BJP stalwart and PM Modi’s former mentor, LK Advani’s birthday, the secrecy and the impact of the announcement can be matched only by the May 1998 nuclear tests conducted by then PM Atal Behari Vajpayee. Only three people were privy to that decision – Vajpayee, Advani, and George Fernandes.

The first to welcome the prime minister’s announcement was President Pranab Mukherjee, who has also held the finance portfolio in the past. “Welcomed bold step of Government of India which will help unearth unaccounted money counterfeit currency,” the President tweeted. He called upon people not to panic and follow the government guidelines for exchange of Rs 1,000/500 notes, reminding people that all currency notes below Rs 500 will continue as legal tender. In another tweet, he called upon everyone to avail of the opportunity provided by the government to exchange currency notes of Rs 500/1,000 for new legal tender.

The Opposition Congress slammed the government’s move, saying it will only bring despair to people, in the season of festivals and weddings. But Congress spokespersons hastened to add that the party was supportive of efforts to curb black money, but called the steps just “ornamental, knee-jerk and an attempt to divert attention.”

Party chief spokesperson Randeep Singh Surjewala reminded everyone that farmers have just harvested their paddy crop and the sowing season of wheat is about to begin. “The farmer is buying fertilizers and seeds and needs a lot of money. In addition the step will affect housewives preparing for marriages and to celebrate festivals,” he said.

The Congress spokesperson also said small shopkeepers and medium level business persons particularly in rural areas not having access to banking systems will be hit hard. He added that the move has come without adequate preparations, saying that the banking system of the country was not yet ready to absorb the government’s move.

BJP president Amit Shah, however, described the move as a surgical strike against corruption. He said the fight against corruption has now reached a decisive stage. The announcements made by the Prime Minister will emerge successful in rooting out corruption, black money, hawala and the business of fake currency. They will instead help usher in economic prosperity for poor, middle and lower-middle class people.

Post the announcement, what will be watched closely now is the conduct of the upcoming five state assembly elections in Uttar Pradesh (UP), Uttarakhand, Punjab, Goa and Manipur. The unprecedented growth in campaign expenditure has always complicated the formidable task of the Election Commission (EC) to curb the role of ‘money power’ during elections.

Concerted efforts by the EC in the past has dampened a candidate’s ability to spend freely, but not affected a political party’s expenditure, leaving intact the primary source of exorbitant spending. While the candidate expenditure is capped at Rs 70 lakh in most parliamentary constituencies, party expenditure remains unconstrained. According to a study by the Centre for Media Studies, a whopping Rs 30,000 crore was spent during 2014 Lok Sabha polls by the government, political parties and candidates making it the most expensive election in Indian history.

According to official data, the Election Commission of India (ECI) had seized over Rs 217 crore in cash all over the country. Of this, Rs 118 crore was seized in Andhra Pradesh alone, followed by Rs 18.31 crore in Tamil Nadu, Rs 14.40 crore in Maharashtra, Rs. 10.46 crore in Uttar Pradesh and over Rs 4 crore in Punjab including numerous other small seizures in the rest of the states. Also 10 million litres of liquor and 100 kg of heroin (mostly in Punjab) was seized.

Advertising costs for candidates and parties were also staggering in the last general election with the BJP spending an estimated level of Rs 5,000 crore and the Congress spending Rs 500 crore for hiring an international PR firm to provide an image makeover to Rahul Gandhi.

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