Tag Archives: india

 
 

India’s demonetisation woes, a year on

Jake Read

Development | South Asia

 

At 8:15pm on the 8th of November 2016, Indian Prime Minister Narendra Modi appeared on live television to announce that the two highest banknote denominations of the Indian Rupee had become worthless. Citizens had until the New Year’s Eve of 2016 to either bank deposit their 500 and 1000 Indian Rupee (Rs) banknotes (~AUD$10/$20 respectively) or swap them for lower banknotes at registered banks.

86% of India’s cash value had been abruptly wiped out in one speech, with India’s central bank destroying the now-defunct banknotes from the next day. Prime Minister Modi announced that bearers of the bills also had the option to trade old banknotes to a new replacement series of 500rs and 2000rs bills.

These bills were however initially scarce: 24 billion notes were subject to withdrawal and, according to RBI Deputy Governor R. Gandhi, just over 1 billion new notes were printed in time. Subsequently, the rest of the year was followed by mass queues, severe currency shortages, national protests and reportedly, even a number of casualties due to exhaustion from queues and crowd rushes.

One year on, the situation has stabilised and to an extent, cash flow has returned to India.

Purpose

Prime Minister Modi’s ‘war on black money’ campaign was part of a promise to curtail the plague of hidden markets upon the government’s economic management. A major objective was to digitalise the economy and to force the creation of more transactional paper trails.

In 2017, Credit Suisse estimated 90%-95% of Indian transactions were cash conducted and few were ever formally recorded. Merchants of all income levels were stashing their bills to avoid their tax obligations and holding ‘unaccounted’ wealth. Counterfeit banknote numbers were also unacceptably high.

To combat this underground money market, Prime Minister Modi implemented a range of policies on top of demonetisation, including introducing federal GST, cancelling tens of thousands of shady business registrations and broadcasting government support behind digitalising banking.

The drastic policy aimed at curbing cash hoarding was Prime Minister Modi’s 2016/17 pièce de résistance, temporarily stripping the population of cash in favour of account credit – which leads us to the cash situation of 2017/18 India.

 

[caption id="attachment_6615" align="alignnone" width="700"] Pictured: Low-valued, sparse 100 Rupee bill distributed to holders of 500 and 1000 Rupee bills following demonetisation (Jake Read)[/caption]

Indian (Cold, Hard) Cash

Upon India’s demonetisation, 100 Rupee (AUD$2) became the next highest banknote (followed by 50rs, 20rs, 10rs and 5rs). Holders of the 500 and 1000 Rupee bills had no choice but to wait in lines for hours to accept stacks of the low-valued, now-sparse 100 Rupee bills. If lucky, they were able to access new 500 and 2000 Rupee (AUD$10/$40) bills. As the months passed, the number of  100 Rupee bills increased and were soon followed by the introduction of 200 Rupee (AUD$4) banknotes in August 2017.

Cash will remain king in India in the long-term future despite the government’s large scale efforts towards digital payments. Before demonetisation, the Reserve Bank of India registered 17.9 trillion Rupees worth of “currency with the public”. In a matter of weeks, this dramatically halved to under 9 trillion Rupees. RBI public data shows that week-by-week, the currency supply increased as Indian money printers worked tirelessly to print more new bills. One year later, the figure stands at 16.3 trillion Rupees, plateauing below pre-demonetisation levels.

The Indian government has heralded demonetisation a success – pointing towards the fact that while 99% of the 500/1000rs bills were handed in, cash demand in the Indian economy dropped to a new low. This indicates that instead of using cash, more Indians have been pushed into electronic payments and mobile wallets. Monthly Indian debit card transactions even rose 58% to 345.7 billion rupees in the eight months after demonetisation, from 219.4 billion rupees before demonetisation.

In the post-demonetisation “Digital India” era of increased transparency, enrolling into the Indian government’s biometric database has been mandatory for submitting tax returns, spending/transferring over 50,000rs and for opening new bank accounts. This has led to 99% of Indians being digitally recorded as of the 2016/17 Financial Year, another measure at targeting India’s hidden cash markets.

Prime Minister Modi and his government, albeit with harsh backlash, plan to continue their program of ‘phasing out’ cash reliance - at least until next year’s federal election. The newly introduced 2000rs bills is considered inappropriate for frequent, everyday transactions. India is now reserving its cash for smaller purchases, with electronic payments increasingly becoming the preference of Indians for both their expensive and cheaper transactions.

3 minute read

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Human costs of the sacred cow

Tess Styles

Uncategorized | South Asia

 

India is home to over 200 million cows, more than any other country in the world. They roam freely on the streets, unfazed by the surrounding cries of street vendors and incessant tooting of horns as they go about their business. It is not uncommon to find that a cow has caused a traffic jam by wandering into the middle of a busy intersection.

Almost 80 per cent of India’s 1.3 billion human citizens are Hindu. Cows are regarded as sacred in Hinduism, which explains why they seem to have a license to do as they please.

The cow’s gentle nature embodies the religion’s “do no harm” principle and forms part of the reason they are held in such high esteem. Ironically however, it is the humble cow that is at the root of widespread controversy and violence throughout India.

[caption id="attachment_5960" align="alignnone" width="3872"] A small herd of urban-dwelling cows inhabiting a street in Jaisalmer, India[/caption]

Cow slaughter is banned in 24 of 29 Indian states. Following the government’s recent crackdown on butchers in the northern and western states of Uttar Pradesh and Gujarat, restrictions have tightened further. The butchers are suspected of selling cow meat, instead of the permitted water buffalo meat.

As India’s largest meat-producing state, the beef ban comes at a great cost to many citizens in Uttar Pradesh who rely on the meat trade to make a living.

Since the election of right-wing chief minister Yogi Adityanath last month, hundreds of meat shops and slaughterhouses around the state have been forced to close. Most of the slaughterhouses are owned by Muslims, who make up 14 per cent of India’s population.

Authorities claim that the new restrictions are only aimed at shutting down illegal businesses, however locals believe they are being unfairly targeted. Even small shops selling only goat, sheep and chicken have been closed, despite these meats being legal to trade.

Many in Muslim communities have earnt their livelihoods through the meat trade for decades and do not have any other skills to make money. Already poor before the new restrictions, these families now face even greater hardship and uncertainty.

It is not only Muslims who are being impacted. The resultant meat shortage in the state has also led to Hindu workers employed in legal abattoirs facing the prospect of losing their jobs.

In addition to the crackdown in Uttar Pradesh, Prime Minister Narendra Modi’s home state of Gujarat last week increased the penalty for cow slaughter to life imprisonment. Anyone convicted of even transporting, possessing or selling beef will now also face up to ten years in jail.

Risks of severe legal punishment for cow slaughter are not the only factors sending butchers out of business. Following the new laws, meat shops around the country have been vandalised and set alight, leaving many involved in the meat trade fearing for their lives.

It is not the first time such violence has erupted due to controversy over cow slaughter.

In 2015, a 50-year-old farmer from Uttar Pradesh was violently murdered by a mob after being accused of slaughtering and eating a cow. The man was dragged from his bed and bashed in the head with a sewing machine, before being repeatedly kicked, stabbed and beaten with bricks in front of family members. Police later revealed that the meat the family had been consuming was mutton.

Last year, two Muslim cattle herders aged 15 and 35 were brutally tortured and hanged on their way to a livestock fair. The assailants are believed to be Hindu radicals who strongly opposed cattle trading.

Despite its stringent laws on cow slaughter, India paradoxically remains the world’s largest exporter of beef. The beef industry claims that this is all buffalo meat, which is not prohibited in most states. However, many suspect that at least some cow meat is being smuggled out of the country.

This is certainly the case along the India-Bangladesh border, where the beef ban has indirectly resulted in the establishment of an illegal cattle smuggling trade. The high demand for beef in Bangladesh means that those willing to endanger themselves (and their cows) by navigating the dangerous river crossing fetch a high price on the other side. This is not only resulting in numerous human fatalities, but is also a counterproductive outcome of the laws aimed at protecting cows.

Whether or not they are achieving their purpose, there is no doubt that the newest regulations will impact thousands. And worse, the beef ban disproportionately burdens poor and disadvantaged groups for whom affordability renders beef a dietary staple.

By widening the gulf between Indian communities, the new regulations have inadvertently created a chasm into which humans and cows alike are liable to fall victim.

4 minute read

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Seeing the elephant

Economics | South Asia

 

“Seeing the elephant” is a 19th century American saying, meaning the gaining of world experience at a significant cost. It originated from travelling circuses, where curious people would pay exorbitant sums to literally, see the elephant.
Today there is an altogether different sort of elephant, one for which the cost is incurred when it is not seen. The identity of this pachyderm is, of course, India.
India has long played second fiddle to its North-Eastern neighbour, coming up short on most metrics of hard power including economics and military strength. India's strengths in areas such as its stable democratic government have failed to make up the difference in raw growth that China has enjoyed over the last 25 years.

World Bank comparison of Chinese and Indian GDP growth since 1990
This however is beginning to change. In particular since the landslide election of Narendra Modi of the Bharatiya Janata Party, India has begun to show more muscle on the international stage.
In its local region, the Modi government has been proactive in engaging its neighbours. Bhutan and Nepal were two of the first countries visited by President Modi, and have since successfully concluded important energy agreements with New Delhi.
More significant however has been India's growing interests in South-east Asia. In the 20th century India purused the “Look East” policy, aimed at capitalising on its historic and cultural connections with South-east Asia. This century India has revived this policy, and is pursuing ever closer relations with the region, in particular economic ties such as its trade deals with Singapore and Thailand.
India is also enhancing its position strategically. Vietnam in particular is developing close ties with India, and in early September the two countries signed a US $500 million dollar arms agreement. They also maintain training relationships in high tech platforms such as submarines and fighter jets.
For China this represents perhaps its most significant long term strategic challenge in Asia. While the statistics today paint a bleak picture for India in comparison to China, and a positively stark one in comparison to the US, the long-term trends are in India's favour.
In the most basic sense, India simply has a lot more untapped potential than China. China today is experiencing the slowing of growth common to all newly industrialised countries, while India remains further behind in this process. China's lead is, in this sense, transient.

Source: IMF WEO database (October 2014) for 2014 estimates, PwC projections for 2030 and 2050
India also has a number of hidden strengths. Regime stability is a controversial question in China, with many Westerners and some Chinese prediciting that the Communist Party will have to reform or collapse. Whether such bleak scenarios are true or not this issue has no hold over India, which has enjoyed 70 years of stable democratic rule.
In strategic terms India is able to play the role of an offsider. China today appears to believe that it can force the US out of Asia, and that if it does so it will be the regional hegemon. The first proposition is highly debatable. The second is geographically illiterate.
India is fundamentally tied to Asia in a way that the United States is not. If and until China can work out how to send the Indian subcontinent back towards Antarctica, Asia will be home to two billion-strong giants; neighbours who inhabit the same geographic space.
Many nations in Asia are today turning to the US for support. The issues in the South and East China Seas are largely working to the US' diplomatic favour, with many historically unfriendly Asian nations such as Vietnam seeking Washington's support. It would be folly to think that even if shorn of the US, these nations would not just turn to the next best thing.
The emerging reality in Asia is not bipolar or even unipolar, but multipolar. Even if China succeeded in forcing the US out, other competitors most of all India would emerge to take its place. Failing to take other powers into consideration only makes openings for them.
Those looking to catch a glimpse of who will be playing ringmaster in the Asia-Pacific would be wise to check in with the elephant.

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India’s internal security crisis of sexual violence

Suchara Fernando

Society and culture | South Asia

 

According to John Baylis, security can be defined as freedom from threats to core values for both groups and individuals. Thereby, internal security can be defined as protecting civilians within sovereign borders from threats. A culture of rape and sexual violence is thus an internal security issue because it threatens the freedom and safety of India’s female population. Since the 2012 Delhi Gang Rape and the sensationalist response of the media, the world’s attention has turned to India’s issues of sexual violence. The existing laws have been amended with stricter effect, and recently, India’s Prime Minister Narendra Modi addressed a number of issues that affected women, in his first Independence Day speech. One of these issues was rape.

India’s attitude towards rape culture has shifted from apathy, to recognising it as a prominent problem. This is due to the Gang Rape incident that occurred at the end of 2012, when a woman and her friend were raped on a bus home. This reprehensible event caused an uproar igniting both global and local interest in India’s attitudes towards sexual violence, largely because of the media’s constant attention to the horrific events that transpired. It was a rape case like no other, arousing everyday people’s emotions to the horrific nature of sexual violence. As a result, the event energised Indian activists, women and government officials.

Rape Statistics

According to the latest statistics from National Crime Records Bureau (NCRB), the number of rapes reported in India has shot up from 24,923 in 2012 to 33,707 in 2013. In Delhi, the number of reported rapes almost doubled from 585 in 2012 to 1,441 in 2014. In addition to these statistics, in India a rape occurs every 21 minutes. These alarming statistics are undoubtedly an underestimation, as many cases go unreported. This is because of the shame that is placed on the victim and her family afterwards. If rape cases are reported it is common for the police to be bribed, and those families that do report a rape to the police are liable to be ridiculed and, finally, intimidated into dropping the case. Cases that do progress to litigation can in theory be won, but the process takes an average of eight years, and sentences are typically low.

[related_article align="left" show_image="yes" index=1 text="Why the death penalty will not solve India’s rape crisis"]

Masses Mobilised

Until the 2012 Gang Rape, it was near impossible for Indian women to seek justice for sexual violence. In response to the gang rape, the day after the attack, protests were held and the media was informed. There were hundreds of young urban students in attendance as well as the local Indian newspaper editorials and television was dominated by the sexual violence discourse. As a result India modified its sexual violence laws and a bill containing harsher punishments for rapists was passed by India’s parliament. This legislation may never have reached the forefront of the political agenda, had it not been for the Gang Rape incident. The media's role in covering the event led to a mobilisation of the masses, seeking to bring change into a patriarchal system.

Seeking Justice

Late last year, justice was taken into the masses’ hands when a 40-year old man was caught raping a teenage girl in Rajasthan, captured on a smart phone via the video function. The girl was taken to a nearby warehouse but her screaming was so loud that a group of people came to her rescue. The man was pulled off the girl by the group who then stripped him, hacked off his genitals with a meat cleaver, and threw him in the street- all as the scene was filmed on smartphones. This brutal vigilantism after rape incidents, instead of pursuing justice through the law, is another growing issue. It is indicative that communities are losing faith in India’s criminal justice system. This is due to the long process of the judicial system, and the inefficient nature of the police force, and other law enforcement bodies.

However, despite the attitudes that changed as a result of the 2012 Gang Rape, the media is not consistently hovering on the topic of sexual violence. An example of this is when a Danish tourist was raped in New Delhi earlier this year. The woman, who was lost and seeking assistance, approached a group of men for directions, men who then raped her. When this case was reported it appeared grouped with other sexual violence crimes that occurred during the period.

The response taken by the media to not publicise this event to the same extent as the Gang Rape may be due to a number of reasons. First, this event was not considered as sensationalist enough to be constantly reported, secondly, rape cases occur too frequently to be constantly reported on. Thirdly, was the media blatantly stating that some rapes are more important than other cases? The answer to these questions may never be known.

However, despite the media’s sensationalist attention on two different rape cases, this issue still remains prevalent and a constant internal security threat. Although the masses have already been mobilised, and the foundations have been laid to ensure that this threat is addressed. It is the law enforcing bodies need to adjust their efficacy to match the masses.

The Role of the Media

In August, Prime Minister Narendra Modi spoke from the Red Fort on India’s 68th Independence Day. Prime Minister Modi addressed a number of issues, one of which was India’s rape culture. He encouraged Indian parents to engage in their sons’ and daughters’ lives. To not limit questions such as ‘Where are you going?’ ‘When will you be coming home?’ What are you doing?’ to daughters but also to sons. Prime Minister Modi highlighted the topic of rape in a globalised world demonstrating his acknowledgement of the issue and how wider nations feel about India’s response to its rape culture. It will be interesting to see how the different communities of India will respond to Modi’s suggestions. In terms of mobilising the masses, Modi’s speech recognising the rape issue confirmed it as a state problem, an internal security issue that needs to be overcome. How India and the world takes to Modi’s words will be interesting to watch.

It is important to consider that although the media has highlighted the severity of rape in India in a number of ways, sexual violence and rape still remain a crime that is widespread and strongly entrenched into Indian culture. Thus, whether or not the media in India sensationally reports or merely reports on every rape case is irrelevant, as awareness has been laid with many Indians now understanding the threat of rape to half of India’s population.

Despite the media generating awareness and public interest in sexual violence in India, the media is unable to constantly expose sexual violence crimes. Furthermore, the media’s attention does not keep up with the country’s justice system in regards to rape issues, rendering it difficult for the uproar of communities to access justice.

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