What Modi's Speech Tonight Won't Tell You

Published: December 31, 2016 13:27 IST
India was promised a miracle in 50 days starting D-day or demonetisation day on November 8. Well, here we are at the deadline, the miracle is nowhere in sight and the bad news just grows and grows - for ordinary people, for the economy, for the country. In a two-part series, I will bring to you 50 facts related to the 50 days. I hope to establish that 50 facts + 50 days = 0 achievements for the BJP government.

The first set of facts relates to the period before November 8. They describe the situation as it was then and how the preparatory work for demonetisation, the digital payments revolution, "cultural revolution", "great leap forward" - or whatever the BJP calls this farce - had just not been done.

1. Four of five Indian villages do not have a bank and only 38 per cent of existing bank branches are in rural areas.

2. Eighty per cent of Indian women do not have bank accounts.

3. India is one of the most cash-intensive economies in the world with a cash-to-GDP ratio of 12 per cent. The informal sector accounts for 45 per cent of GDP and nearly 80 per cent of employment. There are an estimated 21,000 unorganised mandis in the country and 38.3 million unorganised small and medium-sized businesses. All cash driven. Payments of wages and salaries in the informal sector and transactions in mandis and small business are almost entirely dependent on cash.

4. Only six per cent of black money is in cash. The remaining 94 per cent is hidden in gold, real estate, foreign accounts, tax havens.

5. In 2014, the think-tank Global Financial Integrity estimated the illicit export of $83 billion from India. Last year, the government allowed the import of about 1,000 tons of gold -largely to facilitate conversion of domestic black money.

6. One of the stated goals of demonetisation is to eliminate counterfeit currency. Only 0.002 per cent of currency is counterfeit. (Post-November 8, fake notes of the new Rs 2, 000 denomination have already been reported.)

7. There are 208,821 ATMs in India. None of them was recalibrated before November 8 to dispense the Rs 2,000 notes.

8. The World Bank (2014) says there are 18.07 ATMs per 100,000 persons in India, or one ATM for every 5,534 persons.

9. A committee headed by the chairman of the Central Board of Direct Taxes (CBDT) noted that demonetisation to "kill" the black economy is impractical despite its "noble aims". It offered learnings from previous attempts at demonetisation in 1946 and 1978 as examples.

10. The number of cashless economies in the world is zero. Only the highly developed economies of Sweden and Norway have managed up to 97 per cent cashless transactions.

11. Rs 3 crore was deposited in the bank account of the BJP's West Bengal unit before the demonetisation announcement.

12. The BJP reportedly made several land purchases across the country in the first week of November.  

13. Sanjeev Kamboj, head, BJP Legal Cell, Punjab tweeted the picture of the new Rs 2,000 note on November 6 - before demonetization was announced.

14. Only six per cent of transactions made by debit cards are to buy goods or services, the rest is to withdraw cash at ATMs.

15. In October 2016, 32 lakh debit cards in India were affected due to a massive security breach in ATMs/Point of Sale devices over a period of 45 days.

16. Only 300 million people in India have smartphones, roughly 550 million have feature phones or "dumb" phones that are no good for digital payments.

17. Out of over 900 million mobile phones, only 67 million cell phones are linked to bank accounts.

18. Only 10.4 per cent of the population uses mobile wallets.

19. Only 1.2 million out of 14.5 million merchants have Point of Sale (PoS) devices for cashless transactions. As per Ernst & Young, India has the lowest PoS penetration for any major economy.

20. Ninety-two per cent of sales in the FMCG category take place courtesy kirana stores. Only one per cent of these use cashless or digital modes of payment.

21. In March 2016, the total non-performing assets (NPAs) in the country's banks was reported to be a staggering Rs 594,929 crore. Over 90 per cent of this is on the books of public sector banks.

22. The Reserve Bank of India submitted a list of defaulters for loans above Rs 500 crore to the Supreme Court in a sealed cover. In November 2016, the Supreme Court asked the RBI to disclose the names of wilful defaulters who owe more than Rs 85,000 crore to public sector banks. This disclosure has not been made yet.

23. According to the Panama Leaks, 1,195 Indians are reported to have around Rs. 25,420 crore in tax havens. No conclusive action has been taken to bring back this black money.

24. As early as April 2016, the State Bank of India's economic research department had done a report with remarks on demonetisation of high denomination notes. Was news being selectively leaked? How confidential was the demonetisation exercise?

25. One final fact covering November 1-30, before and after November 8: In November 2016, the total value of transactions by card fell to a nine-month low due to severe constraints in consumption. Transactions on the Unified Payments Interface, a mobile payments system introduced by the National Payments Corporation of India, stood at only 287,388 in November. Private mobile wallet companies such as Paytm andMobikwik saw a multi-fold increase in transactions. They were the true beneficiaries of D-Day.

Derek O'Brien is leader, parliamentary party Trinamool Congress (RS), and Chief National spokesperson of the party.

Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of NDTV and NDTV does not assume any responsibility or liability for the same.

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