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Fact Check on Mihir Sharma’s article on demonetisation

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Modi’s demonetisation scheme seems to have hurt a lot of people. It has exposed a lot of people who sided with the BJP & Modi as long as they had a balcony seat ticket to see them demolish the much hated Congress, time and again. The moment the demonetisation affected them personally, they switched.

Some have always made their allegiance to the Congress known. Be it by circulating propaganda, fear-mongering posts or by instigating crowds in foreign lands to play the victim card and project the Modi “Bhakts” as the evil love children of power and arrogance.

One such case that I came across was an article on Bloomberg & ET from a “journalist” – Mihir Sharma. Now, he has had his fair share of misleading posts from “Samosas will be banned in canteens” to the “Super PM does not need headphones for translation” joke but this one was under the garb of an economic journalism.

Simply going through the article, you would feel that India is doomed. Demonetisation was the worst step by PM Modi and that the poor are going to starve to death in a few days. A few moments later, you’d realise that there is not a single fact, reference or an honest data analysis but a singular opinion posted as “News”. Yeah, go climb up that fourth pillar of democracy!

Quotes from the article are in italics.

His recent speeches on the subject have been frankly bizarre. In one, he seemed to laugh at those inconvenienced by the ban; in another, he broke down while speaking of the “sacrifices” he’d made for India, and warned that he might be assassinated by “forces” desperate to protect their “loot.”

Whether I start the reply with your “ban samosas” lies or the “Modi needs no headphones” tweet, you know how it ended. Every other SM user gave you the evidence that your beloved samosas were not being banned in any government canteens; and who can forget the epic reply from Vivek Kumar – the guy from the end of the table, to ruin your so called “joke” on Modi. The point I’m trying to make is that, this, is called evidence. What your have put forth is called “assumption” that is convenience based.

Modi’s asked people to be patient for 50 days, but the process could take as long as four months.

Again, reference? Any kind of research that proves this correct, should be published. Otherwise this is mere fear-mongering.

In seafood-mad West Bengal, for example, the fishing industry is in a state of near-collapse; in the wheat-growing states of the northwest, farmers halfway through the sowing season have run out of cash to buy seeds.

Why is the fishing industry in a such a state, again? Every opportunity for financial inclusion through the PMJDY was provided to each and every Indian. Where the question is of hard earned money, it isn’t inaccessible to anyone. Every change comes with a discomfort. To keep focusing on that trivial isolated pain point and ignore the larger betterment, would be simply, “Penny wise, Pound foolish” (something you’d relate to).

Few villagers have access to an ATM.

Let me see you ask ONE question to the Congress why this is the state of affairs in our country even in the 21st Century. Please.

Many Indians, particularly women, still don’t have an active bank account.

Thankfully, the number is drastically lesser since Modi has become the PM. Well, let’s give credit where it is due!

Finance Minister Arun Jaitley wondered aloud how many poor people would even have 1,000-rupee notes — probably a rhetorical question, but surely it shouldn’t have been. Someone should’ve sought the answer before shutting down India’s financial system.

Probably a fact to ponder upon. People having 1,000-rupee notes to the tune of Rs. 2.5 Lakh are certainly not “poor”.
Someone sought the answer, all right. Just because you didn’t like it, doesn’t make it wrong.

Among India’s middle class, Modi’s “surgical strike on black money” still appears to be popular.

And here I was thinking that the move backfired and people were largely pained by the move. Please find out that the business elite have also lauded the move. Business elite – check. (Inconvenienced but Honest) Middle class – Check. (Not having 1000-rupee notes) Poor – Check. So, backfire? Masterstroke?

Stand in line, we’re told, and you honor our brave soldiers at the border.

By who? Just because the PM mentioned that the black money was being used to fund terrorist activities from across the border, this comes up? Also, not one sentence on the peace in Kashmir since this move? The “near nil” incidents of stone pelting violence? Come on! Be fair!!

But will that support last? The government’s plan is likely to be ineffective in the long term. Economists agree it will have no effect on the generation of black money through corruption.

“Perhaps after the nationalisation of 14 major commercial banks way back in 1969 by the then Prime Minister Indira Gandhi, this is the most significant event in the economic history of India”, said Norbert Lobo, associate professor and head of department of economics, St Aloysius College.

On the positive front, Lobo said that over a period of time, it will give a sharp boost to all formal channels of payment like banking, use of plastic money and other financial institutions that will trigger rapid economic growth. He also foresees that inflation will go down, rupee will strengthen, real estate prices will fall leading to deflationary impact in general. “The move will also promote cashless and paperless economy in future, thereby, puts a curb on money laundering and counterfeiting and drastically reduce corruption and bribery,” he noted.”

“Dharmendra B Mehta, president, CREDAI, welcomed the decision saying that it will give them a level playing field by insulating them from those manipulating the system with their black money. “Most of the builders in Tier II do white transactions, so this decision will have no impact. But it will weed out fly-by-night operators who were spoiling the market. This will make the trade better and raise customer confidence and make industry truly an organised sector,” he said.

He also said the cost of apartments may come down. “We face pressure from land owners. Now, we can buy land directly and save costs. The land owner was exploiting the situation and making maximum out of the situation, which translates into higher cost of apartments. Because of this, land value will come down when black money goes out of the system,” he added.”

Reference link.

Worse, rumors of the demonetization were reportedly circulating before Modi’s announcement, leading to suspicions that the well-connected may have had time to dump their cash piles.

News of the new 2000-rupee note was being circulated beforehand. That does not establish the knowledge of demonetisation. Please post some vetted facts rather than starting rumours about a particular rumour.

Even in the best case scenario — that a significant proportion of the outstanding currency is destroyed — there’s no reason to suppose it was all black money and not the savings of regular citizens scared of harassment by tax authorities.

Again, citizens scared of harassment by tax authorities for their legitimate savings? Didn’t you find a better mask to push this propaganda through?

Modi has dropped dark hints that this is just the beginning, raising fears that business should now worry about of constant tax raids and the reopening of decades-old cases.

Modi has stated and proved his intentions about cleaning up the system and financial reforms since day 1 in office. I think the simple words you missed out in that sentence was : “money laundering businesses” should now worry.

Even setting aside the painful adjustment, the long-term effects of this monetary shock on India’s informal economy could well be severe;

Correction : short-term ill effects. Long term benefits – as pointed out by many experts. (References easily available with a simple painless search).

A large proportion of marginal firms may not survive the loss of a fortnight of income.

Why is there a loss of a fortnight of income? Cheques are completely accepted and being honoured. Fear mongering again?

The informal financial sector — unregistered moneylenders who provide loans to businesses worth 40 percent of total bank lending — will be decimated.

So it comes down to this? Defending the livelihood of “unregistered moneylenders” who are partially the reason for the mounting debts? Why is it difficult to instead open a PMJDY account in a bank and apply for a loan? Mudra Loans also available?

Modi’s administration has put political considerations over economic detail once too often — and this time, it’s severely dented its image for efficiency and practicality.

Opinion presented as fact.

Even if the long queues vanish in the next few weeks, that damage to the government’s reputation is permanent.

I thought this was going to be 4 months. Then I thought Modi was a shrewd operator who knew the pros and cons of taking decisions. Much before I thought, Modi spent a lot of money in making his own image up. Again, opinion presented as a fact.

If something tastes terrible, it must be good for you.

New slogan : If it’s contradictory and anti-establishment, it must be intellectual and important.

Conclusions left at the discretion of the readers.

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Businessman, Sportsman, Writer, Thinker, Photographer and a Coffee addict!
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