The utter generosity of the poor humbles us. They give rice to every mendicant even when their rice is getting over. That is what needs to be understood - their greatnes and their richness. That is what they are defined by. That they are impoverished is what defines us.
We are the cause of that poverty - and the onus is on us to share deeply and completely. (email@example.com)
Nerds vs Jugaadus : The Demonetisation Gambit : NAMO vs NAMAMA
There is an ancient saying in India, that all war is about "Zar, Zooru, Zameen" (Gold, Woman and Land)
have always been passionate about the competition on the above three ,
for conquest of gold, land and that woman every man desires, or at least
the men who have land and gold!
something happened in the last few centuries and now peaking , with the
woman free to make her own choices, man cannot conquer her, so he
creates another game.
via technology, the infinitely textured global financial casino, the
dream-merchants of cinema, the mass illusion of brands.
Without technology, all rest fall down flat.
top Lucent Technology CXO told me in late 1990's that what was
happening was a "Romance with the Internet" (Then later Lucent collapses
and so do all his savings as Equity).
Yes the word is Romance.
Romance, that dreamy passion to find a new intimate utopia, as no collective ones are possible.
Between You and ... the Screen.
And so, the Nerds are the Warriors of the Internet.
conquering Planet Earth what is left is ... this Land Of Infinite
Variations and Chaos. Some call it India. Some Bharat. Some Hindustan.
The Nerds were birthed by the White Man to cover the world by waves and data, every square millimeter of it.
Now the White Man is getting scared of the Frankenstein it created, as itlike a virus is getting into every moment of the human lived existence.
Every dialogue, every transaction, every instant is intermediated by Technology.
our land where the immense majority distrusts Total Control given to
anyone other than the Divine - who has it anyways - we play with
technology but have till now refused it absolute access.
This Demonetisation Gambit is the beginning of a New Mahabharata .
Between the Nerds and the Jugaadus.
The Indian tradition of Jugaadu has been an eternal one.
Jugaadu is the One who knows that Humans are imperfect animals. Their
arrogance is legendary, as is their ability for self-annihilation many
So knowledge, power should always be decentralized and have local firewalls.
She refuses inner access, as that is the space of infinity.
there comes the distrust of any perfect human-created system. As that
system will - in wrong hands - destroy all possibility of freedom.
It may give security and transparency of a certain kind, but it will always be governed by fear and manipulation.
throughout history our land has done an inoculation of the latest
Powerful Evangelisers and Universalists, but never given in .
How much access we give the "material", now the "digital" is the question.
And the Demonetization is the Shankh-Naad of that Mahabharat.
Yudhisthira said the Path of Dharma is very mysterious and delicate,
and even the best minds with the best intent can be erroneous.
For in this battle, there is no simple good, no simple evil.
There are range of choices and no one can fully win or lose.
It will always be a stalemate or total destruction.
The choice is ours.
Now, two recent reports, #MustReads, we should all be paying attention to. I share these, the context, and my response to them here.
1. Bill Gates on Demonetisation and Digitalisation and
2. India: Narendra Modi's bonfire of the Rupees by the Financial Times (the best essay I have read this now on the Great Indian Demonetisation Trick)
1. #MustRead Bill Gates on Demonetisation and Digitalisation :
at Niti Aayog's 'Transforming India' lecture, philanthropist
billionaire Bill Gates hailed government's decision to demonetise high
value currency notes.
government's recent decision to withdraw old currency notes as a bold
move, Gates said demonetisation of high value denominations and
replacing them with new notes with higher security features is an
important step to move away from a shadow economy to an even more
transactions will rise dramatically here. In fact, I think in the next
several years India will become the most digitised economy. Not just by
size but by percentage as well," Gates added.
also lauded Prime Minister Narendra Modi's financial inclusion scheme
'Jan Dhan Yojna'. Terming Aadhaar as a world class digital foundation,
Gates said, "Aadhaar is an interesting case. It's something that had
never been done by any government before, not even in a rich country."
were lots of sceptics. Sceptics about the financial viability, the
technology, the citizen acceptance. But now you have something that is
going to underlie all of your digital systems, whether it's banking, tax
payments, tracking healthcare records, it is an incredible asset and it
took a lot of bravery and good government leadership to pull that
together," he added.
To put this into context, a reminder of what i shared a few days ago:
** In 2015 theIPO's or the money collected by the Indian share markets was only 2.8 billion USD and the money invested by private investors, the Venture Capital and Private Equity funds was 22.4 billion USD, almost 800% more than the IPO's.
So as they say "Follow The Money".
The Global Financial Elites are throwing money at India. And PM Modi is playing to that Gallery.
Course there are a dozen more reasons, from UP elections, to defanging
the regional political cash hoards , to the humongous NPA's in Indian
banking system, to the global economic slowdown, the fall of the
globalisation consensus of post fall of USSR, the rise and rise of
China, the terrorism, the fake currency.
But there are always catalysts, who are the midwives.
Look at the Pay TM advert on celebrating De-monetisation. And the news today:
Chandra, chairman for the National Highways Authority of India (NHAI),
confirmed Paytm has won contracts for automatic toll collections at
highways in various states.
"We have awarded them 40 out of 350," Chandra said.
its digital wallet and ecommerce businesses, Paytm is now eyeing large
public-private partnership market in India. Apart from the NHAI
contracts, the Noida-based technology firm is also in talks with the
Railways for digitising payments mechanisms.
No democratic country has ever done this anywhere, this is more a Politburo-like step.
after the GST success, PM Modi wanted to leave a legacy of clearing 70
years of socialist corruption and there is no guarantee that in the next
term in 2019, he will get absolute majority like in 2014.
is after more than 30 years we have a single party , so PM Modi has
used that chance to do a classic left demonetisation but for making
Indian trade and business more organized and updated.
has used Maoist Cultural revolution strategy, going directly to the
"masses" bypassing the old and regional elites and ... this is just the
It is a huge political gamble.
The biggest 2 benefits will be
Land price rationalisation and land consolidation with people who can
raise "white" money as prices will fall in regions where "black" values
were much higher.
b. The other is the pathway to less use of cash and more of debit, credit cards and e-payments .
these steps are of great need for the Global and East Asian investors
in Internet related businesses as well as mass-manufacturing.
knows that India is a mind-boggling diversity of enterprises , from PSU
to Coops like Amul , from MNC's like Nestle to milkmen , from Wal-Marts
to the Corner stores , from Mercedes assembly to the Rural Punjab
makeshift carrying buffaloes.
of Indians are in the so-called "Informal-Sector" or work in small
enterprises with less than a dozen employees and families working
than 100 million farm landholdings, more than 20 million retailers ,
more than 100 million workshops, service providers like hair-salons and
massage parlours, dhabas and hawkers, and more than 50 million MSME,
micro small medium industries making sarees, garments, auto-components,
handicrafts, leather ad infinitum.
This is between 200-300 million enterprises, almost 95% "Make in India by Indians owned by Indians".
It is this economy that operates in cash mostly.
And no one in "Central Power" has ever loved this non-machine in modernity.
it is almost impossible to track them , to efficiently collect taxes
from them as they are too diverse , semi-nomadic , volatile in income
and occupations . Central Governments need Big Sin Corporations : for
example Alcohol and Tobacco not local "mahua" or "rice-beers" ,
"paan-zarda" or "bidi" that can pay big pay-offs to lobbies and politicians .
Who will lobby, protect this humongous non-machine that has been running India?
No communist, socialist , capitalist , ideologue, academic I have known even begins to understand this non-machine.
has its own Jugaadu Non-Machine. It has no centre, no single network.
It can be just village size or global like "hawala".
But it is fully human. It works on a simple thing called "trust" .
It fails many times, but so does the downtime on internet and crashes and blue-screens of death.
And really, how much does a device last ? Or an Operating System , OS ? Few years.
Relationships are built over generations.
As a Nerd-Hippie , an unique hybrid tells me , that ONLY 3 things are forever " Land , Gold and Samaaj (Human Community)".
Now what political agency, social agency will be the warrior of the Samaaj?
these Non-Machine Human collectives that want to use the Machine - but
as just a Tool - not as an overarching control watching every step they
Our PM Modi right now stands with the Technology and Global Financial Machine .
It is not that anyone can fight or do without the support of that Machine.
The concern is, simply, this: how
do we balance the Nature of Indian inner desire for infinity and
intimate community, its semi-anarchic power structure ... with the most
centralizing technologies ever created?
What will be the "kavach" or protection, like an anti-virus programme?
There are thousands of small responses emerging that we cannot see clearly, as yet.
see 4 political leaders who stand as the regional political responses
to this Global Machine's entry into India , with Full Vigour and
N - Nitish Kumar:
65 years old , again an old socialist OBC political leader , who can
charm both upper and lower castes , has governed the state of Bihar well
in partnership with BJP. If BJP falls in 2019 , he can be a consensus
candidate . In the Demonetisation Debate keeping his distance from the
anti lobby .
A- Akhilesh Yadav
: 43 years old , a smart young OBC political leader , at ease with
technology and with grassroot caste politics . He stands at the
intersection of youth , peasant , technology , modernity aspirations .
Akhilesh has a possibility of a Chaudhary Charan Singh or Devi Lal with
an urbane sophistication . And Uttar Pradesh is the state with maximum
artisan , small businesses and peasantry. A country in itself with 200
million people , 1/6th of India .
MA- Mayawati :
60 years old , the first possibility of a Dalit PM India has . Again
from UP like Akhilesh , known to be an able administrator , but has to
learn to build more professional teams . Also like Nitish , a player who
can be a consensus candidate .
MA- Mamta Banerjee
: 61 years old , now twice CM, West Bengal . The creator of "Maa,
Maati, Manush" (Mother , Soil, Human) campaign and vanquishing the left
after 3 decades is the Queen of the Disadvantaged . Someone who
understands cultural nuances , as is a painter herself , is an unique
woman without any male figure who built the base for every other state
woman leader . She is equidistant with the Delhi Lutyens Elite as well
as BJP . The woman to watch out .
So NAMAMA is what I see as political options to NAMO, PM Modi, if the Demonetisation Gambit fails.
And, it all depends on the process as it pans out in the next 30 days.
I feel the Triad of Modi-Amit Shah-Ajit Doval have many more tricks up
their sleeves, as 2019 is a long way off, and all the issues created by
Demonetisation can be covered by then.
I want to end with my other #MustRead, this article in Financial Times.
For a quick(er) read I have highlighted some portions.
India: Narendra Modi’s bonfire of the rupees:
at the start of this year, began requiring retailers that received more
than Rs200,000 ($3,000) in cash from a customer to report details of
the sale — and the buyer’s taxpayer identification number — to tax
officials. The impact on Ethos Watches, a luxury watch retail chain with
45 stores, was immediate: sales plunged 60 per cent. Before the new
rule, 45 per cent of the company’s sales were of Swiss timepieces worth
over 200,000 — often bought with suitcases full of notes.
are no longer able to make cash purchases of expensive products without
the risk that they will be called by the income tax department
inquiring where they got so much cash from,” Yasho Saboo, Ethos’s owner,
told the Financial Times a few months after the new regulation took
monitoring of large cash payments was the opening salvo in Prime
Minister Narendra Modi’s campaign to crack down on “black money” — cash
earned through illegal activities, or earned legally but never declared
to tax officials. The campaign hit its apogee last week, with New
Delhi’s surprise ban on the use of Rs500 and Rs1,000 notes — a radical
action intended to catch black money hoarders.
scrapped currency — together worth more than $220bn, or 86 per cent of
India’s circulating cash — are no longer legal tender and are not
supposed to be used for any transactions, except buying fuel at state
petrol pumps or in government hospitals. Until December 30,
the notes, worth $7.50 and $15 respectively, can be deposited in bank
accounts or exchanged in very small quantities over the counter for new
currency. But income tax officials will be alerted to any deposit of
more than Rs250,000, a sign of the widening campaign against corruption
and tax evasion.
cash ban, which Mr Modi had kept secret until it was announced on
November 8, has shocked India just as it was beginning its frenetic
high-spending wedding season. Markets are deserted, except for banks and
automatic teller machines deluged by desperate Indians on a quest for
hard cash. “I know the forces up against me,” Mr Modi said in a speech
this week. “They may not let me live. They may ruin me because their
loot of 70 years is in trouble.”
the Indian government struggles to overcome logistical bottlenecks that
have impeded distribution of the new currency, debate is raging over
just how effective the draconian measure will be in combating black
money. There are also questions about its impact on the wider economy.
In India, circulating cash is 14 per cent of GDP, compared to less than 5
per cent in other large economies. Nearly 80 per cent of consumer
transactions are in cash. Many of those have now come to a halt.
stealth decision to abruptly cancel and replace most of India’s
currency is a radical economic experiment, and political gamble, with
few precedents. Some western economists such as Kenneth Rogoff,
professor of public policy and economics at Harvard University, have
advocated the gradual phasing out of high-value notes to combat crime in
advanced economies, which tend to be far less cash dependent. The
European Central Bank is slowly withdrawing the €500 note over concerns
that it facilitates illegal activity and tax evasion.
until now, large-scale overnight demonetisation and currency
replacement exercises have only occurred in countries in the midst of
state or economic collapse — such as in Germany after the second world
war, or the former Soviet Union — or in the throes of hyperinflation.
Such disruption has never been inflicted on a country that was ticking
along nicely like India, where GDP grew 7.1 per cent from April to June
country has done this kind of shock therapy,” says Jahangir Aziz,
global emerging markets analyst at JPMorgan. “We don’t have any
precedents of doing anything of this sort. We are flying by the seat of
Dasgupta, a member of India’s upper house of parliament, says the move
is intended as a radical shake-up of Indian society, where corruption
and tax evasion, by businesses and affluent individuals, is a way of
life. It is a big risk for Mr Modi, whose supporters include wholesale
and retail traders, known for their non-transparent cash dealings.
motivated by a philosophy which is that if you want India to be a
meaningful player on the world economic stage, you’ve got to take tough
measures,” says Mr Dasgupta, who has close ties to Mr Modi’s ruling
Bharatiya Janata party. “Otherwise you can plod on.”
tax to GDP ratio is just 16.6 per cent, some 5.4 per cent less than
comparable countries, the government estimates. Just 5.5 per cent of
Indian earners pay income taxes, while nearly 85 per cent of the economy
is outside the tax net. Mr Modi’s hope appears to be the cash crunch
will force many businesses to start using banks or digital payments, so
their income can be monitored.
really is shock treatment, declaring total war on a particular way of
conducting business,” says Mr Dasgupta. “But it’s a huge political risk.
The traders are your biggest political base and you’ve really hit the
traders the most. They don’t consider it black money. They’ve been doing
it like this for generations.”
‘The clever find ways around it’
attachment to cash — and tendency to conceal their income — dates back
to the socialist-era of Indira Gandhi in the 1970s, when income tax
rates rose to nearly 98 per cent and government officials had extensive
control over business. Income tax rates have fallen sharply since. But
property purchases are still taxed heavily, giving buyers and sellers a
shared incentive to understate property values. Officials retain vast
discretionary powers, often used to amass illicit wealth.
is not a soul in India who has not paid black money,” says Surjit
Bhalla, senior India analyst for the New York-based Observatory Group,
an economic consultancy. Mr Bhalla admits he caved in to pressure in the
1990s to pay Rs300,000 to a Delhi city official who withheld permission
for him to build a house for two years. “We have created an environment
in which everybody is forced to be corrupt,” he says.
has demonetised to try to flush out black money once before. In 1978,
New Delhi scrapped what were then truly high value notes — denominations
of Rs1,000, Rs5,000 and Rs10,000, which then accounted for 2 per cent
of the country’s entire cash supply — and gave holders a week to
exchange them. Recently, anti-corruption campaigners embraced the idea
that India needed another round of such medicine.
Raghuram Rajan, the recently departed governor of the Reserve Bank of
India, was sceptical about the effectiveness of demonetisation as a
means of purging black money from the economy. Most illicit wealth in
India is believed to be held in property and gold, not the sacks of cash
depicted in Bollywood films. “My sense is the clever find ways around
it,” Mr Rajan said two years ago. “They find ways to divide up their
hoard into many smaller pieces … It is not that easy to flush out black
is unclear who convinced Mr Modi to take the gambit. Influential yoga
guru Baba Ramdev has tried to claim credit. But others suggest the real
champion was Anil Bokil, an accountant who founded an obscure Pune-based
non-profit ArthaKranti. His group has gained influence in rightwing
circles with its vision of radically restructuring India’s economy,
including abolishing banknotes larger than Rs50 and scrapping income
summer, Mr Bokil reportedly had an audience with Mr Modi that lasted
nearly two hours. “In India, if you lobby hard enough with the prime
minister’s office and say, ‘I have no vested interest,’ you get a few
minutes to present your idea,” said Saurabh Mukherjea, chief executive
of Ambit Capital, a Mumbai brokerage. “There was no real debate on the
subject and no conventional economist mooted the idea — certainly not on
the scale in which it’s been done.”
agree that the sudden cash crunch will be a painful blow to the economy
initially. Analysts estimate that the ban on the notes will shave about
1 per cent from GDP growth in the current financial year, which ends in
March. “This is a large, negative sudden shock and the impact on real
activity is going to be large and negative in the short run,” said Mr
to Deutsche Bank, fast-moving consumer goods sales have dropped by 30
per cent in some regions, while consumer durables in small towns are at a
standstill. Much of India’s trucking fleet, which relies on cash for
tolls and taxes, are stranded on the highways. “All kinds of cash-based
businesses are all gumming up,” says Rajiv Lall, chief executive of the
prices have also been hard hit, with implications for the
employment-intensive construction sector. In the longer term, it is seen
as good news for aspiring homebuyers. “On average, you are likely to
see a 50 per cent correction in residential real estate prices,” says
Ambit’s Mr Mukherjea.
full impact of the negative shock will depend on how fast the
government can roll out the replacement cash. So far, the process has
been agonisingly slow, as each ATM needs physical recalibration to
handle the new notes, which are slightly smaller in size than the old
ones. “You need to solve, as quickly as possible, the challenge of
introducing new currency into the market,” Mr Lall says.
the difficulties, many economists, and even ordinary Indians, believe
Mr Modi’s shock therapy will yield long-term benefits. Higher levels of
bank deposits can facilitate lower interest rates and greater lending,
while traditional businesses will be under pressure to find alternatives
to cash and come under the tax net. “There is an economic argument that
if you get black money into the formal economy it does improve public
finances,” says Rajeev Malik, senior economist at CLSA.
one knows how much cancelled cash will return to the banks, and how
much will be purged from the system. Cynics claim many working-class
Indians who have been queueing at banks to exchange up to Rs4,500 are
“mules”, being paid by the wealthy to launder their money. Others with
excess, illicit cash are looking to friends and family to help get their
money into the banking system — and offering a handsome price. E xperts
say the note ban will do little to stop new black money.
Rewaria, who sells phone accessories from a tiny stall, says his sales
fell 60 per cent after the ban and have yet to fully recover. Yet he
supports Mr Modi’s move. “It’s only those who were not paying taxes and
stealing from the government that have to worry. I am included in that,”
he says. “I would have always wanted to pay my taxes fairly, but then I
would think why should I, when other people are so corrupt.”
Politics: Cash policy could hit Modi’s rivals in the purse
Indians are dismayed that Prime Minister Narendra Modi’s ban on Rs500
and Rs1,000 notes hit at the start of the annual wedding season — a
moment when families spend significant amounts of their savings on
elaborate nuptial celebrations.
analysts believe Mr Modi was thinking more about the political season
ahead of crucial elections in Uttar Pradesh, India’s largest state, in
the first few months of next year.
80 parliamentary seats, Uttar Pradesh is critical for Mr Modi’s
re-election prospects in 2019, and he is eager for his Bharatiya Janata
party to win control of the state administration, which would offer him
strong advantages in the national election.
his move, he has reinforced his image as a strong, decisive leader,
willing to take bold decisions in a country typically inclined to
incremental change. It may have had an added benefit: the cash crackdown
is thought to have inflicted significant financial damage on his
political rivals, some of whom could have felt a hit to their own cash
stashes just as they are gearing up for the campaign.
BJP’s monetisation scheme is politically monopolistic in intent as it
aims to wipe out the cash reserves of other parties,” wrote Sushil Aaron
of The Hindustan Times.
Mr Modi’s gamble risks backfiring. Many rural Indians store their
hard-earned savings, such as they possess, in cash in high denomination
notes at their homes. Now, they face the challenge of trying to deposit
that money into distant banks — or see it turned into worthless pieces
of paper. Rural dwellers depend even more on cash than city residents.
It remains to be seen whether they will share in Mr Modi’s enthusiasm for purging black money.