Red Star Weekly
While all non-BJP parties are vociferous in defeating it in 2019 elections, none of them are opposing the neo-liberal regime. Nor are they prepared to abandon communal-caste appeasement electoral approach. As far as the CPI(M) led ‘Left Front’ parties are concerned, in spite of debacles in Bengal and Tripura, they expose their social democratic bankruptcy by vehemently embracing neo-liberal policies in Kerala. As elsewhere in the world, situation is created when people’s opposition, their resistances are frustrated in the absence of a revolutionary alternative to stem this rot.
If the Naxalbari Uprising, the emergence of communist revolutionary forces and the formation of CPI(ML) took place in 1960s in a challenging crisis situation, today these challenges are many times more serious. While voting out BJP is an immediate task, the Marxist-Leninist forces should combine it with developing non-parliamentary struggles and parliamentary struggles complementary to it, with the perspective of strengthening independent communist assertion for building people’s alternative with an anti-capitalist manifesto, for all round democratization and sustainable paradigm of egalitarian development.
While observing the Party Day spiritedly, let us intensify our efforts to draft the People’s Manifesto according to concrete conditions in every state and launch mass political platforms to develop non-parliamentary and parliamentary struggles, and for coordinating them at all India level. At the same time, observe 22nd to 28th April as Bhangar Solidarity Week, with the determination to develop Bhangar like people’s resistance movements focusing on burning mass issues wherever possible. In such a spirited atmosphere let us advance towards our 11th Party Congress in November to decide on building the People’s Alternative to throw out corporate-communal fascist forces and to advance towards people’s democracy and socialism
The day starts late in these villages. Breakfast is infrequent; lunch is deferred to about 4pm. Dinner is often had at midnight. “We are at the crossroads of life and death,” says Mirjan Hasan, his voice hoarse. “Should we think of food at this juncture?”
For the past 15 months, about a dozen villages have been up in arms against a power grid project in the western part of Bhangar block, in West Bengal. These villages, in the South 24 Parganas district, are about 30km from Kolkata.
The state government acquired the land a day before Parliament passed the new land acquisition bill in 2013. The protesters have criticised Mamata Banerjee for using a “draconian” law—the Land Acquisition Act of 1894—to get the land.
Government officials told THE WEEK that money is being pumped from outside. While some said Europe’s green lobby was funding the movement to halt the power project, others said a few local NGOs had given the protesters money in the name of human rights.
It all started in 2013, when the state government acquired 14 acres for the project (spread over four villages), under the Power Grid Corporation of India, to set up a 4,000kV power grid substation. The substation would transmit power to vast areas in the district, to the Sundarbans, and also to parts of Bihar.
Interestingly, the state government had acquired the land a day before Parliament passed the new land acquisition bill in 2013. The protesters have criticised Chief Minister Mamata Banerjee for using a “draconian” law—the Land Acquisition Act of 1894—to get the land. This is the same leader who had, for years, led a huge movement against land acquisition in Singur and Nandigram. That movement had helped her become chief minister.
Once work on the substation commenced, the villagers said they were not told about the project. They said they were bullied into giving up their land. “At the gunpoint of [Trinamool Congress leader] Arabul Islam and his men, the villagers were all forced to hand over their land to the government,” says Mosharaf Hossain, a villager. “He issued an ultimatum that if anybody did not give their land, they would be severely punished.”
Allegedly, the government took land, forcibly, from about 60 villagers. And, they were given compensation as per the old land acquisition act. Twelve villagers, however, refused to take the money. The villagers began protesting the project, but the government apparently paid them no heed.
Though about 12 villages are part of the agitation, state Food Processing Industries Minister Abdur Razzak Molla said only “four to five villages are under seize”, and that “the state government would reclaim them very soon”.
Land acquisition aside, the villagers fear the adverse environmental effects of the project. They say the electromagnetic effect would lead to brain disease, stillborn babies, and the death of fish in the local water bodies. Most villagers farm for a living, and fear that the project would damage their crops. They came to know about these “ill-effects” in 2016, when the Communist Party of India (Marxist-Leninist) Red Star joined the fray. The party, known for such campaigns, has stalled almost eight similar projects throughout India.
It was Red Star that brought the farmers under one umbrella. Within months, the villagers found their voice and demanded that the project workers leave. On November 13, 2016, police arrested six villagers for protesting at the power grid office just outside Khamarite village. Three of the six were women. All were charged under the Unlawful Activities (Prevention) Act [UAPA].
Said Mosharaf: “They were arrested because they took on Arabul Islam and his team. We were surprised to see that the police came to arrest them along with the Trinamool Congress goons.” He said that Trinamool workers raided the villagers’ homes and threatened them with dire consequences if they tried to halt the project. With tears in his eyes, he added that a dozen women were kicked, slapped and hit on their heads with lathis.
This led to the formation of a ‘safe farmland and safe environment committee’, in December 2016. Red Star leaders were called to decide on the committee’s structure. It was decided that Red Star would lead the movement, like the one in Nandigram a few years back. The committee was formed. Abdul Aziz Mullick, a 73-year-old from Khamarite, became the president.
Then, in January 2017, came a major twist. The police told the state government that the Maoists, too, had joined the villagers. Hearing this, Banerjee apparently told the police to go tough on the protesters. Allegedly, the police started raiding homes to search for Maoists. Many Red Star leaders were arrested. Party state secretary Pradip Singh Thakur was arrested from Kolkata. National general secretary K.N. Ramachandran was arrested when he came to Kolkata, from Delhi, to join the protest. Both were later released. However, the police could not get hold of key Naxalite Alik Chakraborty, the man behind the villagers’ army.
Almost all the members of the committee were charged under UAPA, which is usually reserved for terrorists. Allegedly, more than a hundred women were attacked by the police.
Said Monowara Bibi of Padmapukur village: “The police barged into my house, where my husband, son and I were sleeping. My husband was a neurological patient and was bedridden. But, that was immaterial to the police and the Trinamool force. They damaged my son’s motorcycle and hit my ailing husband with a stick. He died within three days. If you [Mamata Banerjee] care at all about Muslims (about 98 per cent of the villagers are Muslim), why did you order this assault on us? Does Muslim mean only maulvis?”
She said the goons and the police hit her with lathis, and broke her right knee.
“I will never be able to walk freely. They also destroyed my sewing machine, with which I could earn some money,” she said, breaking down.
Monowara is not alone. Several other women have been attacked. I wanted to meet some of them, but Mosharaf refused. “Sir, our village is known as radical and orthodox in the eyes of liberals. They [injured women] cannot come out openly to meet outsiders,” he said.
The police’s alleged violence led to a massive protest. On January 16, more than ten thousand villagers gathered at the power grid office. This stunned Banerjee, who had promised the Centre that she would get the land. The villagers told the police to vacate the area, but they refused. Kolkata Police then deployed a few thousand men, including its Rapid Action Force. This, despite the area being under the supervision of the West Bengal Police.
Then, say villagers, came brute violence. Said committee member Jan Mohammad Mollah: “The police and Trinamool goons joined hands. They forcibly entered every home, and beat up women and young girls. The police rained bullets on the houses, breaking doors. They even entered the mosque and destroyed everything inside. We could not even pray.”
The battle between the villagers and the police resulted in two deaths. Alamgir Mollah of Swarupnagar and Mofizul Khan of Shyamnagar were shot down. Their mothers, who had allegedly been beaten up by the police, did not even get a chance to bid their sons goodbye for the last time.
What infuriated the villagers most was that the state government did not even acknowledge the deaths, said Jan Mohammad. “We expected at least an inquiry order from the chief minister,” he said. “But, she refused to order any judicial or magisterial inquiry for the deaths that took place in the firing.”
In a meeting the same night, the committee decided to free the villages from government control. The following day, thousands of villagers created a 5km-long human shield and captured hundreds of RAF members coming from Kolkata. “For the first time, we saw police jumping at our feet for mercy. We caught 350 to 400 of Rapid Action Force men and women and confined them in our village,” said Mosharaf.
The villagers reportedly fought like trained guerrillas. However, they were compassionate, too. “[When] they pleaded with us, we set them free,” said Abdul Aziz Mullick, with a rare smile. “They also touched our feet. But, we knew that other villagers might not allow them to go out. So, we decided to give them clothes of our sons, daughters and wives so that they could change, pack up their uniforms and leave. This is the situation of the police in Bengal. Just imagine.”
In the following days, Alik Chakraborty helped the committee turn the entire area into a “liberated zone”. Said Mullick: “We have told the government that we are all criminals in the eyes of the law. So, it would be better if the government does not enter our villages. Otherwise, there would be all-out violence, which might lead to many deaths.”
The committee decides whom to let into the area. The police are banned, but teachers and government officials can enter with permission. If someone wants to enter, they have to stand at the border of the village. A message would be sent to the committee, which would decide whether the person is needed.
The villagers have also formed about 500 protection groups, with women and children in the front rows. They stand guard at night with lathis and handmade weapons. If the police try to enter the villages at night, the groups will raise an alarm and a “war” would begin. As day breaks, others take up the guard. The “protectors” in the night shift sleep in late, as do the ones in the early morning shift. “So, there is no question of cooking meals or having food early in the morning,” said Mosharaf Hossain, joint secretary of the committee. “All that starts at noon, as we are sure no one would try to invade us during the day. The police and goons both act at night. Even today, we are threatened by Trinamool Congress goons.”
Said Razzak Molla: “We have concrete details that Maoists are backing the movement. They have made the area a free zone.” He said many villagers were armed during the attack. “This is the reason we say Maoists were behind the attacks. However, the government will deal with them and turn Bhangar into what it was. We will not let the power project go.”
In January, the state government had held a global business summit, where it sought investment from industrialists. While memorandums of understanding worth Rs 2 lakh crore were signed, little progress has been made. Several MoUs were signed at the 2016 summit, but these, too, have remained on paper. Moreover, this year, Banerjee plans to visit the US to hold meetings with business groups. In such a situation, a successful land agitation would send a bad signal to potential investors. Sources say that foreign consulates are collecting data on land disputes and other socio-political issues in West Bengal.
Once the villages had been “liberated”, Banerjee reportedly asked the police not to create further conflict. She also told Arabul Islam not to enter the villages. When THE WEEK contacted him, Arabul said, “Talk to the senior party functionaries. I am not authorised to speak on this.”
Banerjee also released 17 villagers in police custody as a peace offering. But, she refused to cancel the project as that would send out a bad signal across India, and globally.
After the lathis came the balm. According to the villagers’ committee, the state government said it would be ready for discussions if the villagers handed over the Naxalites they were sheltering. Specifically, Alik Chakraborty. The villagers refused. The government had another offer. The local district magistrate would have a discussion with the 63-member committee, excluding the Naxalites. The villagers said no again. “They cannot issue any conditions before the talk,” said Mullick. “First, they have to withdraw the project.”
He added that Banerjee had tried hard to break the unity of the village committee. At times, Kolkata Police Commissioner Rajeev Kumar and Deputy Inspector General of Police Humayun Kabir called young committee members to Kolkata. They were then taken to high-end restaurants and treated to biryani, mutton curry and firni (a dessert).
Another strategy was to ask imams to call up Mullick and others and tell them not to give shelter to a Hindu Brahmin. “I asked my committee members to eat however much biryani they wanted, and I told the imam that if a Brahmin could stay with Muslims, Muslims could also stay with a Brahmin,” said Mullick. “Then, the imam said he was a Maoist. I said I was ready to live with a Maoist who was sacrificing his life for us.”
Kabir admitted that he was part of the negotiation with villagers, but refused to comment further. “Yes, I was in the Kolkata Police then and had to intervene,” he told THE WEEK. “After that, I was posted in Darjeeling and have now been brought back to the West Bengal Police. Please don’t ask me to say anything more.”
Mosharaf, who was part of the team that was called to Kolkata, said he had biryani at least seven times. But, his decision did not change.
THE WEEK then spoke to the man he was protecting. “Will the government give us in written that it will not go ahead with the power plant? Then I myself would surrender,” said Chakraborty. “I am not here for my own career. We are part of a movement, and we have to achieve the goal.”
After the “liberation”, the government has stopped all civic work in the area. Road construction has been put on hold and schools have been closed for more than a year. Children are being taught at home or in private schools opened by people like Mosharaf. The state government has imposed section 144 outside the villages, and residents are allegedly thrashed and bombed if they step outside the “liberated” zone.
“They have blocked our path so that we cannot go outside,” said M osharaf. “More than five villagers have been injured because of bombs hurled at them when they went outside. The government wants to finish us by cutting off all connectivity. They would like to cut food supply to the villages.”
So, how are the villagers surviving? Apparently, they have help. Many government officials told THE WEEK that money is being pumped into the movement from outside. While some said Europe’s green lobby was funding the movement to halt the power project, others said a few local NGOs had given the protesters money in the name of human rights.
Red Star state secretary Pradip Singh Thakur admitted to being in touch with green outfits in the US, and in Germany, France and other European countries. “We are only taking their guidance on how to protest power [projects] in localities with high population density,” he said. “We have also learnt from them that local electricity supply has nothing to do with grid connection.”
The state government, meanwhile, has refused to move the power plant to another location. State Power Minister Sobhandeb Chatterjee said: “We would not shift the power project under any circumstances. We will not bow down to Maoists and hooligans. The chief minister has asked us to resume work after convincing the villagers.”
Added Razzak Molla: “Land has to be given for power. We will not be able to survive without power. The government will complete the job at any cost.” Interestingly, Molla had opposed the Buddhadeb Bhattacharjee government’s land acquisition in Singur and Nandigram while he was a left front minister.
It seems Banerjee is reliving an old conflict. But, this time, she is on the other side. The opposition parties have apparently teamed up to take on the Trinamool government. Pradip Singh Thakur said that his party had its differences with the CPI (Maoist), but they were working together in Bhangar. “We are getting support from all parties, except the Trinamool Congress and the BJP. To some extent, we are even getting support from the Congress. I have no qualms in admitting that we are taking the help of the Maoists. We are opposed to their tactic of killing people, but we are taking their moral and ideological support.”
Does that mean there is a broader communist unity in the making? “I will not deny that there is an attempt in that regard,” said Thakur. “Even the CPI (Marxist) is in a position to support us.” Asked about this, CPI(M) state secretary Surjya Kanta Mishra said, “Of course, we morally support the people of Bhangar. They even have the support of the intellectuals.”
While the parties might have political gains from forming an alliance against Banerjee, the village committee is doing so out of pure anger. Mullick, in fact, said it took the Bhangar movement for them to understand her “true colours”. “Our biggest mistake was to trust her,” he said, eyes turning red. “Muslims all over Bengal played a key role in making her chief minister. Forget about coming to us, she did not even deplore the violence unleashed by her gang and the police. She is thinking of becoming prime minister now. But, when she cannot carry 5kg, how would she be able to carry 500kg? We must tell her that Muslims brought her to power, and they could end her political career.”
To show their strength, the villagers have decided to fight the upcoming panchayat election in their committee’s name. Mosharaf said they would rule themselves and would send representatives to four panchayats and one zilla parishad of South 24 Parganas.
As I began my journey out of Khamarite village, I saw tears rolling down the cheeks of Jan Mohammad. He lost two shops in the police action. “We have reached a point of no return,” said Mohammad, 60. “The government wants to see our patience. We want to see theirs. If they agree to [our demands], all right. Otherwise, there would be a full-blown war. We are ready to die. But, there is no way we will go back or hand over our leader Alik Chakraborty.”
As dusk sets in, Khamarite village wears a deserted look. Suddenly, young men assemble, armed with sticks. They move to the abandoned power grid office, which is manned by a few Eastern Frontier Rifles guards. Apparently, the government believes the villagers have been stealing items from the office, like switch boards, transformers and coils, and, hence, deployed the guards.
“We would also like to tell them [the guards] to confine themselves to the power house only,” said Khalil Mollah, a 68-year-old farmer. “I think soon you will hear about something dangerous happening here. That would either finish us or you will see the fall of the state government. Mamata Banerjee is digging her own government’s grave.”
Oli Mohammad, treasurer of the committee, said many villages in the area, all the way to the Sundarbans, were Muslim dominant. “Wait till next year and see how the Muslims vote for Mamata. She still has a chance for course correction, otherwise the beginning of the end has already started.”
What would they do if the project was not stopped? Mohammad said: “Then you will either see trucks laden with our bodies, or a government without Mamata.”
(Published in The Week, 20th May, 2018)
Modi’s demonetisation announcement withdrawing 500 and 1000 rupee notes from circulation with effect from the midnight of 8th November has resulted in utter economic chaos and untold misery to the vast masses of common people. When the “surgical attack” along the Line of Control has boomeranged and the Kashmir situation is becoming worse, Modi has resorted to this dramatic move with the aim of cashing it for the forth coming elections to UP, Punjab like states. As there is no economic justification for demonetisation as a tool for curbing black money, Modi has put it forward hiding himself behind the garb of patriotism. This sudden withdrawal of 86.4% of the currency value in circulation without making any efforts to replace it with notes of lower denominations for daily transactions has resulted in unprecedented collapse of people’s purchasing power. The catastrophic outcome of this credit squeeze has been a total devastation of all productive activities including agriculture, retail trade, traditional rural employment and so on. Since 95% of the work force in India is in the informal or unorganized sector where the whole economic transactions are cash based, the outcome of this move has been a disastrous credit crunch leading to halving of the countries growth rate within a span of two weeks.
It is a well recognized fact that black money is generated by the present economic system, the ruling regime which is in unholy alliance with corporate billionaire black money holders like Ambanis, Adanis, Mallyas etc who have already stashed away more than the country’s national income in foreign tax havens. While ascending to the throne of the prime minister two and half years before Modi had promised that he would bring back this black money and put Rs 15 lakhs in the accounts of every Indian within hundred days. Instead of taking any step in this regard, he was protecting corporate black money holders and even encouraging them to accumulate wealth by channeling their illegal money as FDI flows in to India through the Mauritious route. It is even officially recognized that almost 80% of the black money generated by the ruling regime is in ‘Swiss banks’. Lion’s share of the remaining 20% of the black money that is within the country is stored in the form of real estate, land, gold, company shares, drug trafficking etc. Only 5% of the currency in circulation is held as black or unaccounted cash. It is for capturing this 5% the 86.4% of the currency is withdrawn!
Instead of supplying the requisite badly needed small denomination notes, the advance printing of Rs 2000 notes is to appease corporate billionaires. Even as 70 people standing in the queues have died so far, under the cover of demonetization, Modi has also dared to freeze the hard earned money of the peasants and common people in the cooperative banks, agricultural credit societies, housing societies and so on. This has altogether paralyzed the rural and agricultural economy. All these expose that the true intention of this corporate-led assault is not eradication of black money, but to unleash a social engineering for draining away the meager earnings of the common people in to the coffers of corporate billionaires through the banking system.
Already large sections of the people have started coming out on the streets against this barbarous attack on them by Modi government. Recognizing the real nature of this corporate assault more sections are coming out against this. Recognizing the danger inherent in this growing resistance from people, the Modi government has unleashed the RSS parivar and the corporate media to unleash a dis-information campaign eulogizing the virtues of his move. A malicious propaganda is made that all those who oppose it are supporters of black money! False information is spread that through this the fake notes and terrorist funding can be ended! Even concocted stories are spread about what is really the black money! In this situation, in order to expose this false propaganda and to politicize and mobilize the people for resisting demonetisation in more vigorous forms it is necessary to take basic facts and figures of this pernicious move by Modi to the people. It is with this intention the Party is publishing this booklet for reproduction in all languages in all the states as a weapon for truthful mass propaganda against demonetisation.
Almost two weeks have elapsed since prime minister Modi’s dramatic, surprising and unscheduled televised announcement of demonetizing Rs.500 and Rs.1000 bank-notes from November 8 midnight. Already more than 70 people have died by this time while standing on unending queues before the banks and ATMs. While the livelihood and sustenance of the broad masses of people have come to a standstill, the whole economy is in a state of utter chaos and uproar. As per Reserve Bank of India reports, the total banknotes in circulation in India were valued at Rs.16.42 lakh crore (US$240 billion based on current exchange rate) as on 31 March 2016, out of which Rs. 14.18 lakh crore (US$210 billion)) or 86.4 percent was Rs.500 and Rs.1000 notes. The overnight scrapping or withdrawal of this 86.4 percent of the currency value in circulation without doing any sincere efforts to replace it has resulted in a credit squeeze quite unparalleled in the entire economic history creating this horrific situation. Though scrapping of the stipulated currency/currencies and replacing them with a preferred volume of new notes so as to avoid any disruption in the economy are two inseparable aspects of demonetization, Modi government’s duplicitous inaction regarding the latter aspect has created the present unprecedented anarchic and chaotic socio-economic condition in the country. For, as per the latest data released by the RBI, people have been squeezed to deposit a whopping Rs. 5.12 lakh crore in the banking system between November 10 and November 18 while only Rs. 33, 000 crore has been exchanged during this period—a clear proof of the extent of squeeze to which people are subjected. At the same time, as we shall see below, the locking of these deposits in banks will enable them to overcome the erosion in their capital base arising from the unprecedented growth in “non-performing assets”(NPAs).
While declaring the circulation of all 500 and 1000 rupee notes invalid effective from the midnight of November 8, Modi himself was hiding in the garb of patriotism and “war against terrorism” as there is no historical precedence nor any valid economic justification for a demonetization of such a magnitude in the concrete conditions of today. The crucial issue here pertains to the efficacy of demonetization itself as a weapon against black money in the Indian context. As a matter of fact, the very approach to black money or accounted money itself is problematic. An attack on black money without understanding what it constitutes can result in unforeseen repercussions. For instance, Modi government’s characterization of black money as a “monetary stock” is very superficial and misleading and often camouflages the economic, social and cultural relations behind the whole issue. To be precise, black money is systemic, and is generated by the economic system and the policies of the utterly corrupt ruling regime. Moreover, the acceleration in black money generation in India, has been directly attributed to the unfettered freedom granted to corporate-market forces since the onset of neoliberal globalization two and half decades back. Even according to various official studies including that by RBI, more than 80 percent of the ill-gotten wealth or black money generated in India is stashed abroad in foreign tax havens and lion’s share of the remaining 20 percent is in the form of land holdings, real estate, gold, shares, various forms of trafficking, etc., and actual “black money hoards” or unaccounted cash in the economy come to around only 5 percent of the total cash in circulation. Quite revealingly, the printing cost of new notes required to replace the demonetized currency is estimated at a minimum of Rs. 12000 crore. If this is true, then there is little economic logic or legitimate reasoning behind making 86.4 percent of the currency in circulation illegal all of a sudden. Thus, it has become an outright attack on the people who are dealing in legitimate monetary transactions for their life’s sustenance.
While Modi fans claim this anti-people move as “masterstroke”, “surgical strike”, “strike against terror funding,” etc., it has come as a “financial terrorism” on the hapless common people of India. Here, we must not forget the fact that India had the experience of two demonetizations in the past. In January 1946, on the eve of power transfer, there was a demonetization of the 1000 and 10000 rupee notes. Again, the Janata Party government had demonetized 1000, 5000 and 10000 rupee notes on January 16, 1978. However, common people had never seen these high denomination notes even in 1978 and the demonetization had no harmful effects on the people as, unlike Modi’s “ masterstroke” that scrapped 86.4 percent of the currency value, the high-valued currency then constituted only 2 percent of value of notes in circulation. Though Morarji Desai government’s action had little impact on black money, it had the benefit of at least not hurting the common people. On the contrary, while this Modi move is going to be ineffective in resolving the malady of Indian black money as it does not address both corruption and tax evasion which are the roots of the problem, it has already imparted a tragic blow to the people. Today common people use both 500 and 1000 denominations not only as a medium of exchange, but also as a store of value. 80 percent of the economic transactions in India even today is cash-based, while 40 percent of the people still have no bank accounts. Hence the ultimate outcome of this cash or liquidity crunch would be a horrific contraction of the economy and added penalization of the “informal” and unorganized sectors which still account for around half of the so called GDP and more than three-fourths of the employment generation in India. It is said that this demonetization resulting in an abrupt collapse in people’s purchasing power and fall in consumer demand triggering several adverse economic chain events may have the effect of halving the present GDP growth rate too.
At a time when Modi’s media managers, leading Indian corporate black money holders like Adani, imperialist financial institutions such as the IMF, global financial consultants like the Moody’s and even imperialist states have come forward eulogizing the BJP regime for this drastic step, several misconceptions have been created even among well meaning people regarding the whole issue of demonetization. Hence, a clarification on the frequently asked questions in relation to various aspects of black money including the efficacy of demonetization as a policy tool in eradicating black money, counterfeit currency, corruption, “terror funding”, etc. stressed by Modi in his speech may be in order in this context.
1. What is black money?
Firstly, black money is not just a hoard or stock of money. There is no economic rationale behind the government’s prognosis on black money as no line of demarcation exists between “black” and “white” notes. It is the underlying economic process that generates black or unaccounted money. That is, black money has no existence independent of the economic system and the policies of the ruling regime. Wealth accumulated through illegal activities like corruption, tax evasion and outright plunder of workers and toiling people and nature by the corporate billionaires are not kept in pillow covers or in underground caves but is immediately “whitened” and even multiplied through investing in real assets such as land, real estate, company shares, black marketeering, hoarding, gambling, speculation and other money-spinning and criminal activities. The flourishing of such illegal, black money generating parallel economy is due to the inefficient and corrupt institutions of the ruling system and the entire bureaucracy including tax, enforcement, intelligence and police authorities in the country and because of the unholy nexus among the corporate billionaires, ruling class politicians and top bureaucrats. Under such a scenario, the idea that black money is an idle stock of cash held conveys a very naïve and archaic view of the whole issue.
2. What about Modi’s promise of confiscation of black money stashed abroad and putting Rs. 15 lakh in the account of every Indians?
During his election campaign, Modi had pledged that within hundred days of his ascendancy to power he would put Rs. 15 lakh each in the bank account of every Indian citizen. To make this point clear, a few facts about the extent of the volume of black money or unaccounted wealth that is held by Indian corporate billionaires is indispensable. It is estimated that more than 80 percent of the black money generated in India has been kept in foreign tax havens such as “Swiss banks.” A recent report by the International Consortium of Investigative Journalists has put the total black money siphoned out by the super-rich Indians and put in numbered accounts with foreign banks at Rs. 130 trillion (I trillion = I lakh crore) or $ 2 trillion which is almost equal to the country’s national income today. A major part of the so called FDI coming to India is this very same black money diverted through Mauritius, a country with which India at the behest of Ambani, Adani, Mallya, etc., has formed tax avoidance agreement, such that after re-entering India this huge illegal wealth having traitorous dimensions is whitened as badly needed corporate investment. In fact, Modi himself was very much aware of this and he cunningly used the above-said promise as a trump-card throughout his campaign. But after coming to power, he has never cared to say anything further on this issue. When asked about Modi’s silence on this issue, Amit Shah, the BJP president, diverted the whole issue characterizing it as a mere election stunt. Meanwhile, the Enforcement Agencies had framed a case against Adani, Modi’s closest friend who had illegally siphoned out more than Rs. 5000 crore to Mauritius. With Modi’s coming to power, while the case against Adani is no more, those Enforcement officials who were after Adani are now reportedly facing CBI charges on them. Though foreign banks recently have transferred the details of a long list of Indian black money holders there, Modi, the self-styled crusader of black money, is reluctant to disclose even their names to public.
3. Can the present demonetization eradicate black money and corruption?
Not at all! After all, Modi has completely left out the major chunk of black money that is kept in foreign banks from the purview of his demonetization drive. And the present so called “surgical strike” is supposedly directed against domestically held “black money” that comes to around 20 percent of the total unaccounted Indian wealth, modestly estimated at around Rs. 35 lakh crore. However, as already explained (question 1), with the connivance of the government agencies, major part of this has already been “whitened.” According to in depth studies by the RBI and agencies like the National Institute of Public Finance and Policy, only around 5 percent of the currency notes held today have been unaccounted. Therefore, it is clear that demonetization cannot do any long-lasting damage to the black economy since, even if fully successful in wiping out the entire black currency hoards, it can touch only the tip of the iceberg. That is, the demonetization exercise, by excluding almost 95 percent of the country’s black or illegally accumulated wealth from its ambit, will not touch the roots of the problem. It is well known that today corporate policy-making itself is the source of corruption as several notorious scams are associated with it. Corruption and black money generation are inherent in the reckless and illegitimate financial dealings of the corporate-politician-bureaucratic nexus that commit the biggest frauds on the backs of toiling people. Under corporatization, even the various institutions of the regime right from executive and legislature up to judiciary, because of their alliance with corporate capital, are becoming corrupt and rotten to the core. The corporate class in India which is intimately connected with the ruling regime and entering into all kinds of underhand deals, tax evasion, bribes, commissions, kickbacks, black marketing, hoarding, forward trading, false documentation, manipulation of export-import prices, transfer pricing and other tricks of trade, smuggling, counterfeiting, hawala operations, insider trading in stock markets, gambling as in IPL, financial speculation, etc., is the source of all corruption and black money generation in the country. While these lines are written, the apex court of India is going to hear a case involving allegations of bribery against prime minister Modi, MP chief minister Sivaraj Singh Chouhan, Chattisgarh chief minister Remon Singh, former Delhi chief minister Shiela Dixit and Maharastra BJP leader N C Shina in the coming days. Modi’s posturing about cracking down on corruption while propping up this elite section including their activities through neoliberal policies is nothing except a mere smokescreen. It has been a major political and publicity coup for enhancing his reputation as a “muscular leader.”
4. Does it resolve the question of “fake currency” and “terror funding” as claimed by Modi?
This is yet another propaganda blitzkrieg by corporate media which claim that through demonetization, Modi has imparted “shock and awe” to counterfeiters and terror financiers. An impression is also created that much of the cash in circulation is composed of counterfeit currency printed and pushed into India by the neighbouring country. But what are the facts? Contrary to the perception that is deliberately created among the public, the value of counterfeit currency in circulation in India is quite insignificant. A recent study using scientific methodology pioneered by the Kolkata based Indian Statistical Institute has arrived at the revealing conclusion that the value of “fake” or counterfeit notes in India comes to only Rs. 400 crore or just 0.002 percent of the total currency value in circulation. The argument by FICCI like corporate outfits that demonetization abolishing 500 and 1000 denomination notes will “deal a body blow to terror financing” should also be read along with this concrete estimates on fake currency. At the same time, intervening in social media discussions, the RBI itself has been forced to admit that the new 2000 notes are being released without any additional security features. It is also reported that because of the hurried printing many errors are also being crept in these notes. Because of the absence of additional security features coupled with presence of mistakes, the task of counterfeiting will become easier. And the new higher denomination of 2000 notes will make it more profitable for counterfeiters. It will also facilitate the hoarding of cash in black. Revealingly, while the cash-starved common people of India are waiting on the long queue, the new 2000 notes are already available with the “militants”. According to a report just reached, Indian security forces have recovered two freshly issued Rs, 2000 notes from two slain LeT militants in north Kashmir. No country is free from the menace of counterfeiting and the only alternative is constant vigil from enforcement agencies with the backing of people. Demonetization is not at all a panacea for counterfeiting as smugglers, arms and drug traffickers and international criminal gangs regularly resort to the printing of “super notes.” India’s position in this regard is all the more vulnerable as only two-thirds of the currencies are domestically printed. Apart from printing, India’s dependence on the NATO countries for the essential raw materials like ink and “paper” is no secret. Resolving these vulnerabilities is the alternative and, in spite of known cases of counterfeiting, US and EU countries are not prepared to demonetize their currencies as such a step will be detrimental to their economic stability and creditworthiness before the people.
5. Is it proper on the part of Modi announcing the decision?
It is matter of propriety that prior parliamentary approval is sought before such a demonetization decision by the government. As per the Indian Constitution, only parliament is empowered to take decisions pertaining to people’s property and wealth having far reaching repercussions. With BJP’s absolute majority in the Lok Sabha, Modi’s dictatorial approach of not allowing debate or discussion in parliament on important issues is already a much discussed topic. In the past, it was not usual on the part of prime ministers to announce such decisions which were the prerogative of the governor of RBI or that of the finance minister. If Reghuram Rajan who reportedly declined in 2012 a demonetization proposal from the former UPA regime continued as the RBI governor, Modi would not have been able to create this much drama and sensationalism through such a midnight announcement. It has by now become quite clear that Modi’s attempt to project it as an “emergency measure” was to derive maximum political mileage out of the move. And BJP spokespersons sensationalized demonetization as a “landmark initiative” in the country’s 70-year history. While the financial administration and the RBI were woefully unprepared for such a demonetization, in view of the forthcoming elections to UP, Punjab, etc. it was both an image-building exercise for Modi and a poll-dictated hurried move on the part of BJP. The immediate context for this decision has been the boomeranging of the so called “surgical strike” across the line of control and worsening of the Kashmir situation further.
6. Demonetization information has leaked?
While an impression is being created that the demonetization decision was a “closely guarded secret” and as the news of the withdrawal of notes caught the Indian people by surprise, the information is emerging that corporate sections and financial elite very close to the ruling party had prior intimation of the move. What strengthens the suspicion that many with black money were warned in advance is mostly due to the sudden spike in bank deposits in the quarter ending September 30. In an unparalleled manner, during this period more than Rs. 6 lakh crore were deposited in the banks. Finance minister Jaitely has argued that this was due to the disbursal of salary arrears for central government staff. However, this explanation is quite insufficient as this arrear salary is only around one lakh crore and only a portion of it is likely to be deposited in banks. Moreover, this unprecedented rise in bank deposits happened despite stagnation in industrial production and in the absence of any facilitating factors in the economy. In the absence of an upturn in any of the recognized economic parameters, the BJP regime is bound to give a satisfactory explanation for the sudden rise in deposits just before demonetization decision. According to information that is pouring in, during the past few weeks, local dailies in Gujarat and UP as well as social media had reported on the forthcoming demonetization. The unusual and sudden deposit of huge sums of 500 and 1000 notes by the BJP's West Bengal unit on the eve of Modi’s announcement is fishy. A BJP MLA from Rajasthan, Bhawani Singh Rajawat, claimed in a video that 'Ambani and Adani' were informed about the demonetisation, and made arrangements for whitening their wealth, though under pressure he later denied his statement claiming it as an off-the-record conversation. Sanjeev Kamboj, another BJP leader from Punjab, is also reported to have deposited about 2000 notes only days before the official announcement. To cap it all, the present RBI governor Urjit Patel who had been a CEO of one of Ambani’s business divisions and against whom several allegations are already on record, is also having close matrimonial relations with Ambani, the biggest Indian business tycoon. All these factors are sufficient proof that information on demonetization may well have leaked, and this move itself is unfolding as another scam.
7. Why Modi is blacklisting cooperative rural banks?
In the guise of fighting black money, the Modi government has not only prevented the cooperative banks and cooperative credit societies from dealing in cash transactions but also has frozen the earnings and deposits of the people in them. If the cooperative institutions are not functioning in accordance with the rules and regulations enacted by the central and state legislatures, then, rather than penalizing people, it is the duty of respective governments to take appropriate actions against those in charge of them as per law. Instead of doing that, blanket attack on cooperative banks and cooperative credit societies as embodiment of black money has other ulterior motives. While the Modi government is encouraging all new generation banks and even non-banking financial intermediaries to flourish, and is allowing foreign multinational banks to swallow up even public sector banks by liberalizing FDI norms in the banking sector, people’s dependence on the evolving urban-based banking conglomerations can be ensured only if the cooperative sector that provides the essential credit to peasants and self-employed people is destroyed. Under the liberalization-privatization regime where the commercial banks with huge NPAs and “lack of capital adequacy” are completely serving the interests of corporate capital, the ultimate aim of destroying the cooperative sector is forcible integration of the rural economy with the corporate sector, totally eradicating whatever is left of “people’s banking” in the country.
8. Is not demonetization a pro-people, patriotic act?
The well-known 19th century thinker Samuel Johnson’s famous quote “patriotism is the last refuge of a scoundrel” is apt here. Keeping himself in the veil of nationalism and patriotism, Modi has inflicted the biggest-ever anti-national attack on common people. It is the Modi regime that protects the traitors who have cheated the people of India and who have stashed away around Rs. 130 trillion in various corporate tax havens in the world as already noted. The names of 648 such traitors given in the ‘Panama list’ are already with this government. Even after repeated RTI requests, Modi, professing himself as the anti-corruption champion, is not releasing even their names for fear of hurting corporate business sentiments, though he has no such sentiments to the toiling workers, peasants and oppressed masses of India. Recently his government has written off Rs. 1.14 lakh crore corporate loans owed to banks in the name of NPAs. Though the leading names among them are otherwise known to people as Ambani, Adani, Essar, Jindal, Mallya and so on, Modi government is reluctant to officially disclose these names. As of now, it is estimated that the NPAs of public sector banks have crossed Rs. 11 lakh crore, and no effort is there on the part of the government to confiscate this hard –earned money of the Indian people from the corporate, traitorous thugs. The direct tax arrears of these corporate billionaires now hover around Rs. 5 lakh crore and this black money crusader is silent on this. Meanwhile, during the past ten years under the UPA and present NDA regimes, the total tax exemptions granted to the same corporate plunderers amount to around Rs. 40 lakh crores. Since the ascendancy of Modi regime, such annual tax exemptions have crossed Rs. 6 lakh crore whereas the same had been Rs. 5lakh crore on an average during the Manmohan regime. While the previous government had the habit of disclosing these details in the form of a separate document entitled “Statement on Taxes Foregone” appended to every budget, the ‘patriotic’ Modi government has decided to give up even that to appease the corporate tax evaders. Now it is left to the people to decide on the true essence of Modi brand of patriotism.
9. What is the impact of demonetization on the people?
It has now become very clear that this much trumpeted demonetization does not touch the root problem of black money generation, tax evasion or corruption in our country. On the other hand, while totally ineffective in countering these economic evils, this move is the biggest assault on the common people. Since common people are routinely bound to use 500 and 1000 notes which compose 86.4 percent of the currency value in the monetized and cash-based economy, the sudden freezing of their transactions has brought all economic activities to a standstill. People’s condition is pathetic as a major section of them in the rural areas are having no bank accounts (at the all India level, banking penetration is only 46 percent), and even if they have, are not accustomed to banking. In such a scenario, when cash held by hundreds of millions of the poor as savings and for meeting contingencies has become worthless piece of paper, they have little else to fall back upon. More than 80 percent of the country’s employment and around 50 percent of the GDP are still generated in the informal or unorganized sector which is outside the formal banking system and whose life-blood is cash-based transactions. Contrary to the virtues of cashless economy and digitization propagated by the techies and Sanghies, only 20 percent of the population has acquaintance with “plastic money” or credit and debit cards, mobile and internet banking or other electronic money transfer facilities.
Even for those who are depending on credit and debit cards, there are no sufficient ATMs in India. Among the BRICS countries, India with a population of more than 130 crore people has the poorest ATM availability. While Russia has 184 ATMs per lakh population, Brazil has 129, South Africa has 66, China has 55, India has only 18, while world average is 43. When Modi after his midnight announcement was directing people to fall in line in front of ATMs, as per reports now available, of the more than two lakh ATMs none was fit for operation with the new 2000 notes. And as of now only one-third of the ATMs has been recalibrated to use new notes, exposing the gross unpreparedness of an ultra-rightist government whose true motto is serving corporate and imperialist capital. When India is far behind the required infrastructure for a cashless economy, withdrawing bulk of the cash in use through demonetization is nothing short of deliberate penalization of the masses. It has brought the unorganized sectors including retail trade, peasant agriculture, self-employment, household and traditional activities to total paralysis and extreme chaos. Desperate for cash and standing in unending queues holding old banknotes for long hours outside non-functional ATMs, the country’s workforce is wasted. In the process, the marginalized and the oppressed including migrant workers and socially ostracized sections who lack the access to ID documents are the worst affected. Modi government’s squeezing and depriving people of their livelihoods through demonetization has led to an unmitigated disaster for the people.
This assault unleashed on the people of India by Modi government is unprecedented with no parallels anywhere. Even the colonial government was more sympathetic to the people than the Modi regime as it was very careful not to dispossess vast majority of the people through demonetization. Preaching nationalism and patriotism to dispossess people and asking them to make sacrifices in the interests of nation while faithfully serving imperialism and corporate sections is just like rubbing salt in people’s wounds. Demonetization is part of Modi’s corporatization agenda. Like GST, at the cost of federalism, the aim of this neoliberal move is to crush and squeeze the unorganized workers, small retailers and peasants in order to promote corporate capital. By this masterstroke, except Swiss Bank operators, the corporate elite and plastic money holders, all Indians including middle classes, small businessmen, the working class and lower and marginal sections of the peasantry who need currency notes and liquid cash for their survival and sustenance are the worst hit. Together with this the blow suffered by intermediate and small capitalists and businessmen will also be advantageous to corporate capitalists. While the economy shrinks, this demonetization will also lead to manifold appropriations by the corporate class leading to greater a concentration of wealth and widening of the gap between the haves and have-nots. This demonetization is nothing but propping up of the most corrupt corporate sections in the guise of opposing black money and corruption. Corruption and black money which are inherent in the neoliberal-neocolonial system cannot be eradicated by a policy like demonetization. What is required is a political alternative capable of restructuring the system itself along with the installation of appropriate people’s social, economic, and cultural institutions capable of wiping out corruption. The CPI(ML) Red Star appeals to the vast masses of people affected by this corporate led assault to come out on the streets in larger numbers and resist and defeat this barbarous move with all their might.
Demonetisation not for abolishing black money, but an attack on people, resist it!
Confiscate all black money at home and abroad!
Central Committee, CPI(ML) Red Star
Red Star Monthly
Platform for Communist Revolutionaries
Central Organ of CPI (ML) Red Star
Cheif Editor : Com K N Ramachandran
Editorial Board : Comrades K N Ramachandran, Sanjay Singhvi, P J James, Umakant, Sharmsitha Choudhury
Contact: Central Committee, CPI(ML) Red Star, C-141, Sainik Nagar, New Delhi - 110059
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Red Star - April 2016