Demonetisation- aims and outcomes!!

The "D" word has  been synonymous with something notorious in the Indian parlance. The dusk of 8/11 marked an announcement on the same lines. Demonetisation - it stamped an expiry date of 50 days on 86% of the currency by value. The stated goals were- 1) Wiping out the scourge of black money from the face of the earth .2) Ending the menace of counterfeit currency which was mainly used by our sweet neighbour for terror financing and 3) Moving towards a transparent and cashless economy. The propaganda machinery was run full throttle showing how the corrupt were brought to their knees and the panic amongst the politicians and the rich. The common man standing in long queues and his pain was compared to that of the Jawan in Siachen and questioning the diktat was termed as immoral and Seditious.

Critics saw it as the last ditch effort to save the states of U.P and Punjab which political pundits had predicted to be out of reach of the BJP. This may or may not be true but undoubtedly it was the biggest gamble of our PM's career. The RBI and the banks were unprepared for an exercise of this scale. Cash crunch for daily expenses, long queues outside banks and ATMs and frequent policy changes became the order of the day. The public became restless and impatient when "Sonam Gupta Bewafa hai" memes started circulation. It would hardly be news that it was actually a 'safety valve'  designed to divert public attention from the crisis. Our Pradhan Sewak urged our country to just suffer for 50 days for the country and then see how Indian growth story gets the escape velocity of Jupiter😂😂

The New Year has arrived and the 50 day window has all but ended. 96.5% of the 14.5 lakh crore in old 500 and 1000 notes have returned to the RBI. The remaining is still being deposited via RBI counters which has witnessed long queues. The 50 day window witnessed fall in commercial activities, slowdown in the industry with large scale layoffs. The biggest victims were the people of rural areas who had little access to banking facilities. Agriculture witnessed distress sale and decreased sowing of the Rabi crop. The recent RBI directive to banks to ensure atleast 40% of new notes to rural areas is a step too little, too late.

The biggest objective of wiping out black money stands defeated. 2016 was the year which brought bumper riches to Bankers, Brokers and Income Tax officials. Their earnings were in the range of 15% to 50% of the currency. Political parties got the money required to contest elections. Counterfeit currency sure got a big jolt and the peace in Kashmir is an indication. The aim for moving to a cashless economy surely got a push.

Cashless economy with less than 75% literacy and predominant informal sector (86%) is a myth. Lack of banking penetration and financial literacy is also a roadblock. Introduction of  Rs 2000 note is retrograde step for a government aiming at checking black money. Overnight outlawing , instead of phased decommissioning entails too much ' collateral damage'. The poor and the most vulnerable suffered the most. A step like this should have been well thought and discussed. Clearly the implementation hurdles were not factored in the announcement. It's high time that the debate on success / failure of demonetisation be laid to rest. It would only increase divides and friction.

Merger of Budgets--Something tangible or just Lip Service!!!

The Annual Fanfare and media glitterati associated to the Rail Budget will be the thing of the past. The Annual Budget of 2017-18 will be presented by the Finance Minister and there would be no separate Rail Budget .It takes an apolitical Railway Minister like Mr. Prabhu to let go of this colonial vestige which has frequently been used by incumbents to achieve political ends. Other major changes proposed are doing away with the PLAN- NON PLAN distinction which had no rationale whatsoever. The advancement of Budget Presentation to the first week of february to ensure passage of the budget early in the Financial Year is also a welcome move.

When talking about Indian Railways-some historical inputs are always in order :-The separation of Railway Budget from the annual budget was done on the recommendation of Acworth Commitee  in 1924. The reasons enumerated were -:

  a) The share of railways in overall finances of GOI was greater than 60%. Any fluctuation in railway finances could potentially disrupt the whole budget.

  b)Railway was a priced entity which invited a lot of private investments and had to show commercial viabily to  guarantee promised returns.

The main rationale for the separation don`t hold good now. Railway`s share is barely 1% of the GDP and is behind defence sector also. Secondly, it operates as a public department through Gross Budgetary Support(GBS). So, logically ,this is a good step by the government. But the main reason for this merger is to stop political populism in terms of new trains, stations, stoppages which was often the annual affair due to coaltion compulsions. Constitutional experts however stress that such an announcement should have been done by passing a resolution in the parliament to provide sanctity to the move.

The key issues that must be stressed are-:

a) Financial autonomy of the railways must be preserved at all costs. It is one of the few entities that has to earn revenue and ensure financial sustainability. Also it works 24*7 running more than 20,000 trains and carrying more than 2.5 Crore people daily, thereby making swift decisionmaking on the ground.

b) Railways must get required help from the exchequer to maintain safety and also its competitiveness. It must be stressed that worldwide , railways run at losses and are supported by the government. It becomes all the more pertinent for a poor country like ours to support its Railway.

The move will relieve the railways of some 9000 Crore of dividend it pays to the government .It is basically an interest on the loan taken by railways for its capital needs(Capital at charge) which is in perpetuity. Its high time that the coffers of railways are replenished with funds to buy new assets and replace overaged ones (DRF). Next comes the pension liabilities which ,if calculated on actuarial basis ,comes out to the tune of 45,000 Crore  per year and should be set aside in the Pension Fund(PF). Capital Funds for capacity augmentation and decongestion is the utmost priority in the decades to come.

A financially sound Railways is the only way forward for a country with  such geography, demography, inequality  and size.

DHONI..a legend, no less!!!

Dhoni wasn't India's greatest Test captain. But then who was? After leading India to its first World Cup win in nearly 30 years, he presided over India's worst run in Test cricket overseas, including a 0-8 washout in England and Australia in 2011-12. He didn't seize the moments that mattered, too often he hung back, played the waiting game, took the feet off the pedal, let the game drift, and gave the appearance that he didn't care enough about winning and didn't hurt enough about losing.

He could be judged on his methods of course, but only he could have been privy to his motivation and his desires. And how much could he really be blamed for a serially malfunctioning batting group that consisted of four of India's greatest? Or a group of pace bowlers who simply couldn't construct a few sessions of bowling without losing their lines, lengths and the plot?

That said, though, as borne out by results, a case can be made that he was in his element, in his comfort zone, leading India in one-dayers and Tests at home. He had worked out his limited-overs strategy to perfection. That he was India's best ODI batsman and one of the best finishers in the history of the game allowed him to captain in his own tempo for he knew if everything failed he could back himself to win a game off his own bat. And in home Tests, he had found a way to make optimal use of his limited bowling resources because he could rely on the certainty of the pitches.

But captaining India is only partly about tactics. Increasingly, as Virat Kohli will soon discover, it is about keeping your wits and your sanity. Early in his career Dhoni grasped the futility of adulation, because he was also exposed to the repercussions of failure.

In 2007, in a matter of months, Dhoni had the taste of two extremes: the over-the-top celebrations after he had led India to an unexpected win the World Twenty20 in South Africa, and the depraved vilification in the wake of India's early exit from the World Cup in the West Indies. It convinced Dhoni that in order to stay real, he had to develop a detachment, that he couldn't take either success or failure too seriously. From this emerged a cultivated air of indifference and what he regarded as a healthy cynicism towards the media. 

In India, where the media was often part of the circus, Dhoni, an intelligent man, built his defence around deliberate banality.He was candid and spoke openly about the challenge of managing the older players. That was newsworthy and it made a story with it. It promptly spread across television channels, which gave it their twist. Dhoni was upset, denied the quotes and didn't speak to anyone about it, for the most part of his captaincy.

It is futile to guess what prompted his decision to leave Test cricket at this juncture and whether it was carefully thought out over the past few months, or came about in recent days. After Nasser Hussain watched Michael Vaughan lead the England ODI side with refreshing vigour in 2003 he instinctively knew his time was up. Did Dhoni go through a similar moment of epiphany watching Kohli lead the team in Adelaide?

Whatever the reason, Dhoni's decision is well timed. The series has been lost. He is not abandoning a team in disarray because despite the score line India have fought hard, and there is a captain hungry and waiting.

When he was appointed captain Dhoni was the leader India needed. And at the moment of his departure, if only from Test cricket, it's hard to escape feeling that Indian cricket will know what it has lost after he is gone. Despite everything that can be held against him, he was a uniquely remarkable man. A lot is said about his proximity to N Srinivasan, but Dhoni didn't owe his position in Indian cricket to that. He created it through the force of his personality.

In fact, one of Dhoni's biggest contributions to his team-mates was his ability to create a cocoon around the young team for the intensity of public scrutiny and inquisitions by the media could easily distort impressionable minds. And his ability to stay focused on the present, without the burden of the past and worry about the future, allowed him to conduct the most high-pressure job in cricket with a calm that was nearly surreal.