Almost every person who disproves demonetization comes with one of the two arguments:
- Black money is stashed in Swiss Banks and is not in India. Gathering information on this lead me to write Modi gov’s surgical strike(s) on Black Money
- Whatever black money is in India, is not in the form of cash. This is the reason why I am writing this one.
Only after reading the comments on different platforms where I shared the blog, did I realize the reason why people are facing difficulties in understanding the affects of demonetization on black money. They see and understand black money from their personal experiences (middle class or upper middle class), as in how would they handle black money if they had any. For instance they would think of investing in gold or buying some properties etc. When the system runs on the wheels of corruption, it should be unfair to blame anybody who is trying to become rich by using some “tricks”, it is not that they don’t work hard. They do. And when all of a sudden the tricks came to be known as tax evasion, it hurt. Everyone who got a chance did that and not once but every year.
But instead of looking at demonetization from your own eyes, look at it with a different set of eyes. Imagine as if you were a politician or a party president, who is going to contest an election in next six months. What will you do to win? What will your checklist look like? Trust me, if you do this, you will literally see truck loads of black money in the form of cash floating all around you.
PS: This article is based on the book “When Crime Pays ” by Milan Vaishnav. If at any point in time you feel I am lying, please read the book.
Before we move further, please answer a question. “Why do political parties nominate criminals for MPs and MLAs?” And more than they being nominated “how do these criminals manage to win the elections?” It is not that they bypass the voting process, they win the elections fair and square. How? Every election, media points out the number of candidates with serious crimes, but they never question the reasons as to why they win. Do they?
No they don’t!!! If they will, it will expose the lie that we have been living for decades.
It made sense to nominate criminals before 1990s as their muscle power was extensively utilized for winning elections. They were quite skilled at booth capturing or ballot stuffing. Ballot stuffing is where somebody would fill up the ballot box with ballots marked with their party signs. The goons would go and vote in place of voters (voter suppression & booth capturing). Threatening and fear mongering was common. By the way, do you know when was the first booth captured? by whom and which constituency? — Begusarai constituency in Bihar in late fifties and early sixties. Congress had prepped up Kamdev Singh to counter Communists and tried to win the election by threatening and intimidating Yadavs, maybe this is the reason why we see a Yadav vote bank today in UP and Bihar. I used to think that these kind of acts would be perpetrated by some regional or smaller parties because they wanted a place in political sphere by shortcut as Congress was occupying most of the space. But I was wrong! Congress is in reality the mother of all miseries. The situation was so bad, in 1980s in the UP election, electoral fraud was perpetrated in every constituency, and this time every party did it.
You must have seen some popular Bollywood movies glamorizing some of these criminals. For instance – the movie “Raees” based on the life story of Abdul Latif. The dhanda in “Ammi Jaan Kahti thi koi dhanda chota nahi hota” was illicit liquor business. He then promoted himself to a mafia don, a go-to man for Dawood Ibrahim & was later arrested by Anti Terror Squad. He had political backing from the then Gujarat’s chief minister Chimanbhai Patel. What was the politician gaining from him?
You must have also heard about another movie “Daddy”. It was based on the life of Arun Gawli. He had even higher connections, India’s former Prime Minister Chandra Shekhar was one of his valued friends. Why did the politician needed him?
They both became politicians later. There are many more examples like this.
But this (rigging/booth capture/ballot stuffing) is not possible today, as in 1990s the model code of conduct was implemented; Election Commission started using CRPF to maintain the decorum and electronic voting machines came into existence. These three measures to a great extent refrained criminals to show their muscle power. Maybe this is the reason why some parties don’t want EVMs, it poses a big problem for them to rig an election. But if the elections cannot be rigged now, then why are the criminals still in the political game? There number had been consistently increasing, for instance in 1984 there were 35 MLAs out of 425 MLAs in the UP Assembly with criminal charges, increased to 50 in 1989, 133 in 1991, 148 in 1993, 152 in 1996 and 207 in 2002. Moreover, you could just look at the candidates with criminal charges in last election in your state.
These criminals are cash rich, they have access to enormous amount of cash.
Like every other system, political machinery needs money. If I were to roll out a political party and contest elections, I would need offices, stationery, personnel, travel, telecommunications, transport, publications, meetings, public meetings, posters, hoardings, advertising. Moreover during election time I would need rallies and mega rallies for which I would hire trucks and truckloads of people. Then there are elections and their hectic campaigns. Political workers have to be paid on a regular basis. I would need money, a lot of money for this. Where do I get this money from? How?
If it were 1950s, I could have openly asked big business houses to support me. All thanks to Mahatma Gandhi. He was a supporter of corporate funding. He and Ghanshyamdas Birla were close friends; Birlas had been financing Congress prior to as well after independence. But things changed within two decades. Indira Gandhi made corporate funding illegal in 1969. Why? To cut the source of funds for Swatantra Party (a party formed by some INC leaders who were tired of Nehru’s dominance), which was still in its nascent stages but growing. It managed only 6% votes and 18 seats in its first LS election and 8% votes and 44 seats in his second LS elections.
But if it cut the funds for one party, it cut the funds for Indira’s party too. How was Congress generating funds after the implementation of these acts?
By inventing “briefcase politics“. “You need a license to something, bring a couple of briefcases“, “you need government’s approval to expand the production, bring these many briefcases.” The other way valid for every one was by making connections, connections with those who had easy access to cash or had the ability to generate a lot of cash; like smugglers, major criminals, extortionists, drug peddlers. Even though Rajiv Gandhi tried to undo the changes by making corporate funding legal again in 1985, but the damage was already done. The nexus between the criminals and politicians had developed, business houses had seen the advantage of getting things done by paying under the table.
Moreover, political parties have price tags for their tickets. Some parties are quite open about this, some do it in a rather subtle way. For instance BSP supremo Mayawati has a fixed price for the tickets. Anybody who wants the ticket deposits a certain amount to the party fund and certain amount is directed towards her. Congress on the other hand has a complex way. The candidate has to first pay an application fee. Then he has to pay a fee so as to get the selection committee’s attention (this amount is in lakhs). The interesting part being that this is even before any sort of guarantee for the ticket. If he/she is selected than there are regular payments in the name of social contribution. Criminals have an upper hand here as well, they not only fund their own seats, they help fund the seats of other candidates as well, which is why a lot of the politician within the party have their allegiances to some criminal politicians.
Politicians now had no dearth of unaccounted cash. The money was no longer used only to keep the party machinery going. It was being used to buy votes. I think no one will disagree with this. Just before elections, is the period of freebies. Phones, laptops, e-rickshaws, sarees, liquor etc. all sort of things have been gifted to the respective vote banks. The author of the book mentions a very interesting incident of how politicians innovated ideas to bribe voters. A politician invited people of a particular community in a wedding. It was exactly like a wedding except there was no bride, no groom and instead of bringing the presents the guest received presents along with envelops. They came, they ate and drank, enjoyed and later voted for the politician. Easy-peasy! Now you could very well relate it to the iftar parties that are organized. Do you think the Hindu leaders who were organizing Iftars were doing it out of religious courtesy? No, it was an investment; invite the community leaders, gift them, keep them happy and they will ask their followers to vote for you. If you point this out, you become communal.
Now do you think this is done with white money or online? If you think so, I can’t do much to help.
Coming back to demonetization. Look at the timing of demonetization. Just three months before UP state elections, the state that plays a critical role in forming national governments. Politicians including the ones in BJP were sitting on heaps of cash just to be used to buy voters. And within minutes all of it turned into colored pieces of papers. The poor voters were not influenced by the freebies, there were no e-rickshaws or laptops gifted. And this is why BJP was able to sweep the elections like never before; 325 out of 403. Except Nitish Kumar, no body had supported the decision. Every body was stung by it, Nitish Kumar was stung by Laloo more than by demonetization and that’s why he was supporting.
Demonetization was the right thing to do, drug trafficking, human trafficking, Naxalism, Terrorism etc. etc. feed on cash and cash only. Political leaders said that the poor was affected the most and some people bought this lie. Would they have said that we lost all our funding? You have to be really naive to even think that they would have.
If poor was affected the most, they would not have voted for BJP at all, it was too short a time to forget. Caste-religion arithmetic didn’t change but the cash arithmetic changed.
BJP did the right thing, and used it for their benefits as well. This is what I like about the part the most. They do the right thing and use it politically. Congress on the other hand refrains from taking hard decisions for their political benefits or does the incorrect/wrong thing for their political benefits like Indira Gandhi did by deeming corporate funding illegal. Electoral bonds is the way to undo what Indira Gandhi did in 1969. These bonds are issued by the State Bank of India and anyone can buy them after producing KYC documents, this is white money. Bank would have the information about the buyer. If you buy a crore worth of bonds and you file returns on 5-10 lac, the IT department would come running to your house. They are kept anonymous to avoid bullying. For instance – if a particular party finds out xyz person is funding its opposition party, what does that party do to that xyz person? Anonymous is not a problem unidentified is a problem. The identification in electoral bonds is as it should be. Just a thought– why do people on Quora answer anonymously?
Thanks for reading!!!
By the way, before I go, do you know how BJP managed to win 303 seats on its own in the general elections? Modi wave never works alone, there are other factor complimenting it. Stay tuned to know my analysis about how they got the numbers.