The JFK Foundation has been giving awards since 1990 to celebrate individuals who choose the public interest over the partisanship, who do what is right rather than what is expedient.

In 2017, we had nominated Prime Minister Narendra Modi for this award for his bold step of Demonetization (DeMo). But the judges selected President Barak Obama for his courageous actions during his administration.

We decided to nominate him again especially after what has happened since DeMo and also because of continuous criticism of DeMo, mostly from those who are not charitable to him. It may be useful to revisit what we wrote to support our nomination last year and also to look at the price Modi has paid for his bold step to reduce corruption.

“India’s Prime Minister Honorable Narendra Modi took an unexpected and audacious step on November 8, 2016, to combat widespread corruption in India, the largest democracy in the world, by implementing the demonetization of high-denomination paper currency. “Demonetization was a simple strategy to bring 86% of the wealth stored in currency into the banking sector. By banning the use of these higher-valued notes, those politicians and government officials who have accepted cash bribes and those business people who have freely dealt on a cash basis only, without paying taxes or providing receipts for their illegal transactions, were put in the position of losing their ill-gotten gains stored in currency (“black” money). Terrorists with fake currency also had to curtail their activities.”

At the first anniversary of DeMo, the three stated objectives of DeMo have not been met. Only Rs. 41 crores worth of counterfeit currencies have been detected. There is not enough proof to show that there is appreciable decrease in terrorist activity. Of Rs. 15.44 trillion currencies scrapped, Rs. 15.28 trillion (99%) have been deposited. In other words, there has been very little black money detected.

Still, it is too early to tell if DeMo has failed. If the government succeeds in finding the sources of money deposited, it may ultimately lead to detecting black money. The finance ministry has already found that a whopping amount of Rs. 5.03 trillion has been deposited by just 147,000 individuals. This works out to Rs. 3.4 crores per person. Why will anyone keep such huge amount under the bed? Will investigative agencies have the capacity to unearth the black money now? Will there be political will on the part of NDA without showing any partiality to enforce the rule of law?

Some other benefits of DeMo are as follows: Cash to GDP ratio has fallen from 11.3% to 9.7% which will result in reduced black-market transactions and higher tax collections. Similar results will take place as a result of increasing digital payments which have gone up by 41%. About 9.1 million new taxpayers have been added after DeMo and 1.8 million notices have been sent to assesses to explain their sources of Rs. 3.2 to 4 trillion. Cash deposits worth Rs 17000 crore were made and later withdrawn by 35,000 companies which are deregistered. Scrutiny of these companies should lead to detecting illegal transactions. In the end, all these efforts will lead to exposure of black money.

In other words, when Modi took the DeMo decision, there was no certainty of success. Still, Modi took the gamble. While the objective of fighting corruption was noble, the risks of failure were great. Despite immense popularity of Modi in his home state, tremendous development of Gujarat, and the opposition party being led by what was universally perceived as an incompetent leader, Rahul Gandhi, BJP barely won the state election. Thus, Modi paid a heavy political penalty because of DeMo. It is true that in the state elections which took place soon after DeMo in UP, Uttarakhand and Goa, BJP did win. Still, by any standard, it was a courageous step on the part of Modi as seen against the background of extensive criticism and some of the goals being unmet.

We had some doubts while submitting the nomination this year. There is general perception that Modi has not been able to control fundamentalist Hindutva elements in his party. This in turn has affected India’s civilizational values of a secular culture and inclusiveness which have been held in high esteem from time immemorial. For this reason, despite his bold step of DeMo, we felt our efforts may not bear any chance this year also.

Depending on whether one is charitable to Modi or not, his perceived failure to rein in Hindutva can be considered as his failure or not. Given the complexity of Indian society, it is to the credit of Modi that he has been able to control extreme Hindutva elements. Even in a mature democracy like the U.S., the political system has not been able to control racism or religious fundamentalism.

It is a small miracle that India has been able to maintain a relatively peaceful environment and avoid civic unrest. Just take a look at Pakistan next door. While Modi could have definitely done more to uphold secular principles, given the difficult circumstances, he has managed well. For this reason, we thought the judges will overlook his doubtful secular credentials and honor him, like they have overlooked several drawbacks of Obama’s presidency. Even at the risk of paying a heavy political penalty, his was a bold decision to fight corruption, the first such serious attempt since India gained independence.

Bhamy V. Shenoy,

Mallik Putcha

Via E-mail


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