People are scurrying to dig out an article published on
April 1 this year in a Rajkot-based Gujarati daily after Prime Minister
Narendra Modi’s recent warning that the war on black money has only just begun.
The reason is the newspaper appears to have scooped the Modi government’s
demonetization plan.

It not only announced that currency notes of Rs 500 and Rs
1000 value would be scrapped, it also reported two other life-style impacting
decisions that are in the pipeline. One is a proposal to place a legal limit on
the amount of cash that can be kept at home. The other is a move to disallow
cash transactions above Rs 2000. Such transactions will be only permitted
through banking instruments such as cheques, cards, bank drafts etc., the
article said.

Since it was published on April 1, many dismissed it as an
April Fool’s Day prank. In any case, the newspaper is a district publication
with virtually no profile outside of Rajkot, which is why it probably escaped
attention. But after November 8 evening, the newspaper has become the talk of
political circles and demand for the article has soared. It has set social
media on fire. 

Political circles are wondering how the newspaper got the
tip off and whether the news item alerted the large trading community in
Gujarat about the impending crackdown on black money.

It is significant that while traders associations in many
parts of the country are up in arms over the disruption to their businesses
because of demonetization, their counterparts in Modi’s home state are silent.
Political circles believe there is a connection between the strange silence and
the appearance of the news item.

The article has also given grist to allegations from
opposition parties and Arvind Kejriwal in particular that those close to the
BJP had advance knowledge of the demonetization decision. Storm clouds are
gathering over the winter session of Parliament, dashing expectations that the
process for an April 2017 rollout of GST would be completed this time. Looks
like burre din instead of achche din.

Did Rajan pay?

Speculation is rife in financial circles whether differences
with Prime Minister Narendra Modi over scrapping Rs 500 and Rs 1000 currency
notes was one of the triggers for denying former RBI governor Raghuram Rajan a
second term.

It seems Modi has been mulling the idea of demonetizing high
value currency notes ever since a Pune-based think tank called ArthaKranti
proposed the idea to him in 2014 during his Lok Sabha campaign. But Rajan was
strenuously opposed to the idea. In fact, he said so quite firmly in a public
lecture he delivered during his tenure at RBI. He said demonetization would not
help to curb the black money economy.

The move gained momentum once Rajan left in September this
year and Urjit Patel took over as RBI governor. A small point of interest. The
scrapped notes bore Rajan’s signature on them but the new Rs 500 and Rs 2000
notes will carry Patel’s signature, thus marking the change of guard at the
country’s central bank with a bang.

Rajan’s objection to demonetization has a historical
parallel. Morarji Desai as prime minister of the Janata government had scrapped
high value notes in 1978. Then RBI governor I G Patel had resisted the move.
Patel was over ruled with disastrous consequences. Not only did demonetization
fail to stop black money, it led to a spectacular rise in gold smuggling as
people simply shifted to hoarding their undeclared cash in bullion.

Media sharp

It looks like transport minister Nitin Gadkari is more media
savvy than work savvy. Apparently, his ministry regularly feeds journalists on
the roads and highways beat information about projects that are still under
wraps and yet to take off.

The most recent example was an announcement about a ropeway
system between Dhaula Kuan in New Delhi and Manesar in Haryana. Excited
reporters who wanted more details were told to get them from Gadkari’s office.

Unfortunately for the reporters, Gadkari’s office had no
information about the proposal. Officials helpfully contacted the National
Highways Authority on behalf of the journalists only to be told that NHAI had
not even prepared a file on the project, let alone started work on it.
Reporters are now asking whether the ropeway is another jumla.

Media shy

Then there is HRD minister Prakash Javdekar who has gone
into hiding ever since he took over this important portfolio so dear to the
RSS. In sharp contrast to Gadkari as well as his predecessor Smriti Irani,
Javdekar stays far away from the media limelight, leaving reporters on the
education beat starved for news.

His avoidance of the media is odd because Javdekar used to
be a BJP spokesperson and was quite a favorite of the media for his frankness
and accessibility. Even as environment minister, he did not shy away from
meeting reporters.

But as HRD minister, he seems to have gone into a shell.
Journalists covering the education beat are at a loss because when Irani was
HRD minister, they were never short of news. Although she rarely met
journalists, her office used to hand out tips about proposals and decisions,
sometimes even before they were put up to the union cabinet for discussion.

By Arati R Jerath