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Mainstream, VOL LV No 1 New Delhi December 24, 2016 - ANNUAL 2016

Demonetisation can only go so far. To go further, politics that backs black money must change

Monday 26 December 2016, by T J S George



Not enough weeks have passed for us to say that the currency earthquake is over. Aftershocks are more severe than expected, with people waiting in day-long queues, and often failing to withdraw their own money. However, enough time has lapsed for us to look at the overall picture and ask a few basic questions: What is it all about? How did we come to this pass? Will all this lead to the fair and equitable life we deserve?

Only some answers are clear. Basically, this is all about ensuring essential decencies in public life. We came to this pass because Indians like to prosper by cheating other Indians. The unans-werable question is whether all this will clean things up. That is like asking whether the character of the Indian will change.

It can. But it won’t if we rely only on currency reform. The Prime Minister’s intentions were noble —the elimination of not only black money but also corruption. But he will be the first to admit that corruption has gone so deep into the vitals of our country that it cannot be eliminated simply by demonetisation.

In developed countries corruption is largely confined to the upper echelons of politics and business. In India bribing is needed for everything from kindergarten admission to selling vegetables by the roadside. Bribing to get wrong things done is understandable. Bribing to get one’s basic rights as a citizen is Indian. This kind of corruption has seized India as a direct result of politics.

The political class and illicit money have always travelled together in India because, the way Indian democracy developed, politicians found it essential to amass immense quantities of cash to acquire power and then to hold on to it. Neither black money nor bribery nor mafia influence nor the killing of our cities, mountains and rivers can be stopped as long as the need for big money is essential for the survival of the political class as presently constituted. And, in all fairness, that need cannot be reduced as long as elections in India remain an insatiably fund-guzzling exercise.

In the 2014 elections parties formally reported a total spend of Rs 2000 crores (BJP—Rs 714 crores, Congress—Rs 516 crores). An independent research group said the total spend was nearer Rs 30,000 crores. Where do such money come from?

In a well-known 2013 study, Trilochan Sastry (IIM, Bangalore) found that 30 per cent of elected MPs and MLAs had criminal cases against them. Crime and money, the report said, played an important role in winning elections. It also showed how easy it was to buy votes. Today, buying of votes has become open and widespread, often ruling governments and Ministers taking the lead. When the need exists for buying votes, holding massive rallies, gathering crowds with incentives ranging from biriyani to cash, feeding and sustaining tens of thousands of cadres for year-round field work, how can the “deep immorality at the heart of our democracy” be eliminated by mere demone-tisation? As the New York Times editorialised, “The government has begun circulating new 500- and 2000-rupee notes, which means that cash-based corruption... is almost sure to return.” (That’s already happening. A PWD officer in Bengaluru was caught last week with a hoard of Rs 4.7 crores in fresh 2000-rupee notes. Fake 2000s are already in circulation.)

Our leaders have been talking about “cashless society” and using “your mobile phone as your bank”. India has more people living below the poverty line than Bangladesh and Pakistan. It will take time for them to supercede cash. To eliminate corruption in the meantime, the character of the political class, the ability of criminals to become legislators will have to be addressed. Strong laws can keep criminals out. Electoral systems other than the first-past-the-post idea bequeathed by Britain can be considered; there are choices ranging from Europe’s proportional representation system to Japan’s multi-member constituencies. This is the way to real reform—not getting rid of some old currency notes and introducing new ones.

But that kind of reform demands uncommon courage, even audacity. For the politician is no ordinary animal. Statesman-scholar-orator Cicero explained how:

The poor work and work

The rich exploit the poor

The soldier protects both

The tax-payer pays for all three

The wanderer rests for all four

The drunk drinks for all five

The banker robs all six

The lawyer misleads all seven

The doctor kills all eight

The undertaker buries all nine

The politician lives happily

On the account of all ten.

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