The ‘Unsung’ Refugees: Rohingya

“People floating like pollen in search of more fertile soil.”

The Rohingyas are a people struck by tragedy: persecuted at home in Myanmar, rejected or barely tolerated abroad, and sacrificed at the altar of strategic calculations by powerful neighbours. To add to it, the refugee crisis in Europe has overshadowed their plight. Both institutionally discriminated and denied basic human rights in a legally-sanctioned manner as well as removed from the mainstream, over a million Rohingyas have no land they can call home. It is as though they have been expelled from humanity itself.

Rohingya Muslims in Myanmar’s Rakhine state, neighbouring Bangladesh, are not recognised by the Myanmar government as an official ethnic group and are therefore denied citizenship. Most Rohingyas are not qualified to be citizens of Myanmar as per the 1982 Citizenship Law, which was promulgated by the erstwhile military rule. While it is claimed that there were no Rohingyas in Myanmar before the British brought ‘Bengalis’ to Burma, there is sufficient evidence to show that the Rohingyas pre-existed the British-engineered migration (during the British occupation of the Arakan State in 1823) from present-day Bangladesh to Burma. Even those who arrived in Burma post-1823 could not go back to Bangladesh now given that they have no citizenship claims there. This effectively makes them a stateless people.

Hundreds of people have been killed at the hands of the military, many more hundreds have disappeared, scores of women sexually assaulted, villages razed to the ground, and tens of thousands have fled the country. A large number of those escaping the brutal violence end up in the well-oiled trafficking networks of the region who smuggle them out for huge amounts of money. Some die en route, some make it to the borders of neighbouring countries only to be turned away: hordes, including little children, often get stranded at sea.

Myanmar, however, denies that its military has committed any wrong. A government-appointed inquiry committee recently concluded that “there were no cases of genocide and religious persecution in the region”.

What makes the anti-Rohingya violence in Myanmar even more distressing is that all of this is now happening under the stewardship of Aung San Suu Kyi, who was awarded the Nobel Peace Prize for her courageous and inspiring “non-violent struggle for democracy and human rights”.Clearly, Ms. Suu Kyi’s precarious political position makes it hard for her to respond to the crisis as effectively as she could have. Despite the return of democracy in 2015, the military continues to have a strong hold over the civilian government in Myanmar, especially on key issues such as defence, border affairs and home affairs. The country’s constitution also reserves one-fourth of the seats in Parliament for the military. And though Ms. Suu Kyi’s party is in power, she herself is barred from becoming the country’s president (she holds the post of State Counsellor) since her children are British citizens. Under such circumstances, her ability to take on the powerful military establishment remains limited.

The predicament of the Rohingyas is also a result of contemporary geopolitical realities and strategic calculations by key stakeholders in the region and elsewhere. The Western world is busy with the unfolding of events in Syria and the resultant refugee crisis. Hence they would not want to get bogged down with the Rohingyas, whose plight has no direct bearing on the West’s interests. Having steadfastly invested in the pro-democracy movement led by Ms. Suu Kyi, and by recently lifting the 20-year-long sanctions against Myanmar, the U.S. finds itself in no position to bargain or put pressure on the country.No Oil No party!

The UN has also proven to be powerless on the Rohingya question, as it has been on most questions lately. In May 2015, when the UN Security Council held a closed-door briefing on the human rights situation in Myanmar, China made it clear that it was an internal matter of Myanmar. For China, its relationship with Myanmar’s Generals is important to gain access to the country’s natural resources, and recruiting Myanmar for China’s larger economic goals which include opening a land corridor to the Bay of Bengal.

India, a traditional home for Myanmar’s pro-democracy activists, has been reluctant to either speak out about the violence against the Rohingyas or accommodate them in significant numbers. China’s closeness to Myanmar clearly worries New Delhi. Its reluctance also comes from the fact that Myanmar’s assistance is seen as significant in dealing with the insurgency in the Northeast. In any case, the Rohingyas are of no strategic value to anyone. Compare this to how both India and China rushed in with aid during the earthquake in Nepal nearly two years ago. Today, many Rohingyas are either turned away while trying to enter the country or sent to jail for illegal entry. Recall that India has not signed the 1951 United Nations Refugee Convention or its 1967 Protocol which require countries to accept refugees.

Although India’s reluctance to speak out publicly about the violations against the Rohingyas is understandable, it can ill afford to ignore the crisis in Myanmar. Even if human rights considerations are the least of India’s worries, it is clearly in its interest to ensure that stability and peace return to the Rakhine state. For one, as and when peace returns to Myanmar, India can ask the latter to rehabilitate the Rohingyas (like it did vis-à-vis East Pakistan refugees after the 1971 war). Second, a stable and democratic Myanmar will naturally gravitate towards India. Third, and perhaps most importantly, the Rohingya crisis, if it remains unsettled, can become a path toward radicalization and pose a greater security threat for India. There are reports of increasing radicalisation among sections of the Rohingya community. A December 2016 report by the International Crisis Group spoke precisely about this challenge and highlighted how rights violations can lead to radicalisation.

India should use creative diplomacy to persuade Myanmar to resolve the Rohingya crisis. It should perhaps consider appointing a special envoy for this purpose who should hold discreet negotiations with Myanmar’s military, Ms. Suu Kyi, Dhaka and Beijing in order to bring an end to the crisis.

“HUMAN BEINGS,WHILE CAPABLE OF BEING THE WORST,ARE ALSO CAPABLE OF RISING ABOVE THEMSELVES,CHOOSING AGAIN WHAT IS GOOD AND MAKING A NEW START ,DESPITE THEIR MENTAL AND SOCIAL CONDITIONING” – Pope Francis

Advertisements

Reservations: Not an Anti-Poverty plan!

A wise man once said,”You cannot make new history by forgetting old history”.That man was the Architect of our Constitution-Dr.B.R.Ambedkar, the same Constitution which gives us our freedom, our liberty our justice.

Before reading further with preconceived notions and ideas, I would like to share a quote of the great Mahatama Gandhi, he said,”India will be completely developed and free from its social evils when the last man in every corner of every village in this country gets to excercise all the rights enshrined in our Constitution Freedom,Liberty,Justice,Equality,Fraternity and along with this basic amenities to survive and lead a life of dignity-Fundamental Right,Article 21 Constitution of India.”

Should jobs, schools, and universities promote diversity with reservations or quotas? This question has long evoked strong and passionate responses. People come to the debate with preconceived ideas and stands, and rarely change their minds. As a result, India is left with little consensus on the reasons for reservations and whether or not reservation is a useful policy.

A major issue that recently surfaced the nation is that of the agitations by the Patels/Patidars in Gujarat, the Marathas in Maharashtra and the Jats in Haryana and neighbouring states, demanding inclusion in the list of Socially and Educationally Backward Classes (SEBCs) and provisions for reservation on that basis. This is in conflict with the Constitution.These are dominant castes whose members are major landowners in their states. Some of these castes have leveraged their advantageous position in agriculture to diversify and enter business, trade and industry in addition to state services.

Social transformation and building of economic and cultural capital takes time to be passed on from one generation to another. It is an all too commonly held belief that people from general castes are meritorious inherently. Yet, the ability to decipher test answers or speak confidently in an interview is often the result of being nurtured in an environment that is a result of accumulated economic, social and cultural capital. Children who grew up in a dominant caste household are often encouraged, supported, and helped to succeed by other members of their caste groups, while reserved category students rarely have such networks to draw on.

It is also important to reconsider what is meant by “merit”. The ability to answer test questions correctly is certainly not the only, or even the best, predictor of how well someone will perform in school or on the job. It is worth noting that many reserved candidates have reached schools and jobs in spite of economic and social disadvantage as well as overt exclusion and discrimination. Because they have succeeded in the face of adversity, they bring a different and desirable kind of merit to a school or workplace.

Some people say that they oppose reservation because they believe in equality. However, reservation is a policy tool that promotes equality rather than undermines it. The primary reason why reservation was written into India’s Constitution was to ensure representation of all social groups in positions of power. When people from all social groups are represented in government, higher education, and in business, it is less likely that traditionally marginalised groups will continue to be denied fundamental rights and access to their fair share of society’s resources.

Not an anti-poverty plan

Finally, some people say that they oppose today’s reservations because they believe reservation should be made on the basis of income rather than social background. However, reservation is intended not to be an anti-poverty programme. The government has many programmes which are, in principle, accessible to all poor people. Reservation exists because, in addition to being more likely to be poor than general castes, Dalits, backward Muslims, and Adivasis face social discrimination and exclusion that poor people from general caste backgrounds do not face. The fact that the right to education, the right to own land, the right to conduct business, or to pursue a well-remunerated occupation has been reserved for men from high caste backgrounds for generations means that government must take steps to correct the unequal distribution of rights.

Reservation is a policy tool that is used not only in India. In many countries, reservation or other types of affirmative action are used to try to overcome human prejudice based on race, gender, ethnicity, religion, caste or any other group identity, and to encourage representation of and participation by groups traditionally excluded and discriminated against. One way to make these measures more acceptable and help people better understand the historic, social and cultural background behind reservation would be to educate children in schools about caste, ethnic, gender and regional diversities and the need for public policy interventions to make society more equal and fair.

CASTE MAY BE BAD. CASTE MAY LEAD TO CONDUCT SO GROSS AS TO BE CALLED MAN’S INHUMANITY TO MAN. ALL THE SAME, IT MUST BE RECOGNIZED THAT THE HINDUS OBSERVE CASTE NOT BECAUSE THEY ARE INHUMAN OR WRONG-HEADED. THEY OBSERVE CASTE BECAUSE THEY ARE DEEPLY RELIGIOUS.PEOPLE ARE NOT WRONG IN OBSERVING CASTE. IN MY VIEW, WHAT IS WRONG IS THEIR RELIGION, WHICH HAS INCULCATED THIS NOTION OF CASTE. THE ENEMY IS NOT THE PEOPLE WHO OBSERVE CASTE, IT IS THE SHASTRAS WHICH TEACH THEM THIS RELIGION OF CASTE.

Failure of India or its populist Government?

There has been lot of discussion around demonetisation in the newspapers and social media. The move is being criticised for poor implementation and the government is being blamed for its failure. In social media, jokes and messages about the failure of the government’s policy are shared. A few eminent experts are also blaming the government for the pitiable implementation of demonetisation.
However, any decision taken by the head of family(HE/SHE) should be accepted and implemented whole-heartedly by all the family members. It cannot be the sole responsibility of the head of the family. If a decision is taken in the interest of the country by the head of the country, it is the duty of the people to contribute honestly to its implementation. If demonetisation was a failure, it was not because of an incorrect decision taken by our prime minister or government. It is us, the people as a whole, who are more responsible.

Whosoever got an opportunity to cheat the nation has done so. Bankers were allegedly busy laundering money by illegal means, helping convert old, defunct currency into new notes. Even a few officers of the Reserve Bank of India are allegedly involved in money laundering. Lakhs of people allowed their accounts to be used to convert black money. There are reports of how co-operative banks were involved in laundering currency. Even political parties were used to launder notes.

It appears that everyone is determined to make the scheme a failure and then blame the government. It is not the defeat of the government but of India, by its own society. It is disgraceful. We compare our country with other developed nations, but we never try to understand how honest and devoted their citizens are. Their contribution towards their nation is great.

It is equally true that the fight against black money, corruption, terrorism and counterfeit currency is an ongoing process and cannot be totally eradicated by a single act of demonetisation. However, it would address the  challenges to a great extent, if we would have contributed to its success, rather than its failure.
Our opposition parties are also responsible. They have not contributed to the success of demonetisation. They were busy finding fault with the government. Rather than work for the people, they chose to play politics, as seen during the winter session of Parliament.
The Reserve Bank of India is a noble institution. We are proud of how it has managed the monetary system as well as the needs of the economy for the last 60 years. This time, though, it could not perform to expectation. Every day, a new notification was issued, often contrary to an earlier assurance. There was no system in place to prevent bank officials from using their position for money laundering. We are now talking of digitization.
Will it be possible to implement overnight? The mistake of the head of the government was that a decision was taken without accounting for the flaws in the system which may prevent proper implementation. It was a decision which had a high impact on the financial system of the country. The government should have paid heed to the loopholes in our system, plugging those which could have caused the initiative’s failure.
The decision was like trying to run bullet trains on our existing railway tracks. The lesson to learn from demonetisation is that a decision with honest intentions but poor implementation causes more pain than gain and everyone has contributed to its failure.

To sum it up John F. Kennedy former President of USA, famously said: “Ask not what your country can do for you, ask what you can do for your country.”

Trump-Modi-Xi : Caught in Between

As a rising China challenges American primacy in Asia, navigating between the Chinese and American is a major strategic challenge for us. India’s default option, many assume, is to reaffirm non-alignment — neither with USA, nor China. That conventional wisdom is under a cloud as India draws closer towards America, amidst a rather difficult phase with China.

Contrary to the mythology of non-alignment, tilting to one side or another has been very much part of the Indian diplomatic tradition and the Chinese. As he founded the People’s Republic of China, it is known Mao Zedong insisted China must “lean one side” — towards the Soviet Union. But within a few years, he fought Moscow and leaned towards the other side, Washington.Jawaharlal Nehru proclaimed non-alignment but reached out to the US amidst the war with China in 1962. In 1971, Indira Gandhi signed a security treaty with the Soviet Union as the American embrace of China altered the regional balance.

The Problem with India-China:

China’s GDP is nearly five times larger than India’s. Its military spending is thrice that of Delhi. In the last few years, India has struggled to cope with China’s political expansion, military modernisation and power projection in India’s neighbourhood. India’s territorial disputes with China have also endured. After decades of negotiation, India and China don’t even agree on the length of their border. China says the border is about 2,000 km — the Indian count is nearly 4,000. Thereby hangs a tale of two nationalisms, so deeply attached to territory.
The territorial question is further complicated by the disagreement over Tibet and its relationship to India and China. India worries about China’s deepening alliance with Pakistan and frets over China’s growing power in the subcontinent and the Indian Ocean. India has a massive trade deficit with China. Beyond the bilateral and regional, China has tripped up India’s membership of the Nuclear Suppliers Group and is unenthusiastic about India’s claim for permanent membership of the United Nations Security Council.To add to this, At UN, China’s decision to  block India’s bid to ban JeM chief Masood Azhar is not going well down India

The Tilt towards USA:

India’s messy relationship with China stands in contrast to growing political convergence with the United States. India has a significant trade surplus with America; its dynamic IT sector is deeply connected to America’s Silicon Valley. The US ended its pro-Pakistan tilt some years ago and has moved towards neutrality; US is more forthcoming than China in helping India counter cross-border terrorism from Pakistan. Unlike China, America supports India’s membership of the UNSC and the NSG.
US says it wants to see India emerge as a great power; China seems to block India’s rise on the global stage.

The Uncertainty with USA:

India is acutely aware that US and China have a stronger economic partnership with each other than they have with India. For the near future, therefore, India’s emphasis will be on making the best of expanding the partnership with the United States while limiting and managing the differences with China. India has just begun this global walk— and there is much distance to cover.

India’s ambition to grow as an “influential and responsible global power” calls for it to manage equilibrium in the region. It is a challenge for India to ensure that its neighbourhood stays less volatile. At the same time, India has had long-term relations with America. The two countries were once described by PM Vajpayee as “natural allies”. In the last two years, PM Modi has taken these relations much farther and deeper. We need them in our pursuit of progress. At the same time, India needs to be watchful about US moves with at least four important countries — Russia, China, Saudi Arabia and Pakistan. These have a greater bearing on India’s interests in the region and beyond

“Nations have no permanent friends or allies in diplomacy; they have only permanent interests,” said the famous English statesman Lord Palmerstone.

‘New-Clear’ Policy.

Since the dawn of the nuclear age in 1945 there has been an ongoing debate centred on defining an appropriate role for nuclear weapons. Everybody agrees that these weapons are enormously destructive and should not be used. The question is whether the best way to prevent their use is to consider these as weapons for war fighting (just like conventional weapons but only more destructive), or to see them as qualitatively different, meant exclusively for deterrence. Different countries possessing nuclear weapons have evolved their doctrines based on the historical experiences shaping their world views, their threat perceptions and security obligations.

India’s Nuclear Doctrine consists of these key principles: “a) building and maintaining a credible minimum deterrent; b) posture of ‘No First Use’, nuclear weapons will only be used in retaliation against a nuclear attack on Indian territory or on Indian forces anywhere; c) nuclear retaliation to a first strike will be massive and designed to inflict unacceptable damage; d) non-use of nuclear weapons against non-nuclear weapon states; however, in the event of a major attack against India, or Indian forces anywhere, by biological or chemical weapons, India will retain the option of retaliating with nuclear weapons….”

The two key elements — a “credible minimum deterrent” and “no first use” — were first articulated by Prime Minister Atal Bihari Vajpayee in Parliament days after India had undertaken a series of five nuclear tests in Pokhran 1998 and declared itself a nuclear weapon state. Mr.Vajpayee stated that India did not see nuclear weapons as weapons of war; that their role was to ensure that India is not subjected to nuclear threats or coercion; that India will not engage in an arms race; and that India believes in a “no first use” policy and remains ready to discuss this with other countries, bilaterally or in a collective forum.

A nuclear doctrine serves multiple uses — it determines the nuclear posture, provides guidance for deployment and targeting, chain of command and control, communication and signalling to adversary and, in the ultimate, the use of nuclear weapons. Naturally, the last would happen once deterrence has failed. So far, the nuclear triad (aircraft, land-based mobile missiles and sea-based assets) which is to guarantee India’s assured retaliation remains a work in progress

India’s doctrine does not mention any country, but it is no secret that the Indian nuclear arsenal is to counter threats from China and Pakistan. China has maintained a ‘no first use’ policy since 1964 when it went nuclear, and the Chinese leadership has always considered nuclear weapons as political weapons.

Pakistan has adopted a first-use policy to ensure full-spectrum deterrence; in other words, it envisages a tactical, operational and strategic role for its nuclear weapons. Since it maintains that its nuclear arsenal is exclusively against India, it seeks to counter India’s conventional superiority at all levels. Recently, it has developed tactical nuclear weapons to hedge against a conventional military strike under the Cold Start doctrine.

The conventional criticism against a ‘no first use’ policy is that India would have to suffer a first strike before it retaliated. This criticism is valid but only highlights the need for India to ensure that deterrence does not fail, and that there is a clear communication to the adversary of the certainty of punitive nuclear retaliation. This can happen when India’s nuclear arsenal, its delivery systems and its command and control enjoy assured survivability.

Does this imply that till then, it is preferable for India to shift to a first-use policy? That might be an attractive option if India was certain that in a first strike, it could take out all of Pakistan’s (or China’s) nuclear assets so that it would escape any nuclear retaliation. That is highly unlikely, today and in the future. Even the U.S. with its vast arsenal, both conventional and nuclear, is unsure about denuclearizing North Korea which has a much smaller arsenal and capability.

Shifting to a first-use policy also has implications for the size of the arsenal, deployment posture, alert levels, delegation of command and control, defining red lines which would trigger a nuclear response and escalation management along the nuclear ladder. In short, it would mark a shift from deterrence towards nuclear war fighting. In short, it would lead to greater instability. The same instability would govern a situation of nuclear ambiguity. Given the short distances, it is impractical for India to envisage a ‘launch on warning’ posture even it developed and deployed a highly effective early warning system.

There is another key difference. Pakistan’s nuclear arsenal is totally under the military’s control, and by and large, the military approach to any weapon system is to find a use for it; it is difficult for the military to possess a weapon system and then conceive of a doctrine that aims at deterring its use.

Deterrence is a product of ‘technical capability’ and ‘political will’. In dealing with Pakistan, India has to define who is to be deterred and find ways of demonstrating the requisite political will even as we build up our technical capabilities. Israel is a classic example of a state possessing advanced technical capabilities and also having demonstrated political will. Yet, this has failed to deter rocket strikes and terror attacks on Israeli territory.

This is not to suggest that India’s nuclear doctrine cannot be changed. It should be periodically reviewed and updated, possibly every decade or so, taking into account technological developments and changes in the security environment. This is, however, not a simple issue of changing a few words here or there and casual remarks can only add to confusion.

Ultimately, deterrence is a mental construct which requires clarity in its planning. Even ambiguity needs to be a calculated ambiguity. Only then will the doctrine serve to reassure the Indian people even as it deters the adversary in order to safeguard India’s security.

Is it a failed Democracy?

The ascension to power of populist strongmen like Donald Trump in the U.S., Recep Tayyip Erdogan in Turkey and Narendra Modi in India demonstrates the limits of electoral democracy as a system of truly representing the political will of the people. In all three cases, the numbers suggest that most voters wanted these individuals and the political parties that they respectively lead — the Republican Party, the Justice and Development Party (AKP), and the Bharatiya Janata Party (BJP) — to form the government, but the reality in each country veers away from these purely numerical electoral outcomes.

The logic of democracy proposes that the choice of the majority will stand in for the choice of the whole electorate; but in fact, those who did not choose these leaders or their parties find not only that their will is not being communicated, but that it is being thwarted, undermined, or worse, directly opposed. This is how a supposedly democratic process ends up undermining ‘the people’ for very large numbers of voters.

Judging from Mr. Trump’s statements during his bruising election campaign, his administration will work against racial, religious and sexual minorities, coming down hardest on immigrant communities in America. He has nevertheless won the electoral college votes necessary to be named President-elect. But it is the presidential candidate of the Democratic Party, Hillary Clinton, who has won the popular vote by well over 2 million votes, and counting. Protests against Mr. Trump have swept across American cities, including New York, Chicago, Los Angeles, Portland, Austin, Boston and Miami, with hundreds or sometimes thousands of people asserting that he is “not my President”. The immediate aftermath of his election shows the U.S. to be a country utterly divided, calling into question the foundational “union” implied in its very name.

Mr. Erdogan and his AKP got elected with a decisive mandate of just below 50 per cent of the votes in the Turkish general elections of November 2015. But after the failed coup against him on July 15, 2016, he has come down hard on members of the Gülen Movement (followers of the shadowy cleric Fethullah Gülen) that engineered the coup attempt, and his political opponents loyal to the Kurdish nationalist party, the Peoples’ Democratic Party (HDP). His government has arrested, jailed and fired tens of thousands of suspected Gülenists and Kurdish sympathisers, picking out individuals from civil society, the army, the judiciary, universities, the press and political outfits. Mr. Erdogan’s purges are pushing what is technically a multi-party democracy towards what looks increasingly like a one-party state.

Democracies everywhere appear to be in danger. Many electoral democracies are becoming outright illiberal; some are deteriorating into forms of competitive authoritarianism.Violence against Muslims, Dalits and tribals, curbs on dissent and criticism, attacks on secularism and tolerance, and a sharp decline in the freedom of the media and academia have become vandalised in the name of a new “nationalism”. Since this summer, Kashmiris have endured the worst crackdowns against civilians and the longest curfews of the past 30 years under the BJP-Peoples Democratic Party coalition government.

The system of representational democracy — whether based on an electoral college or first-past-the-post — is also opaque about why citizens vote for this or that party.

The challenge is not only for citizens to reconcile their own opinions and aspirations with those of their compatriots who have different political preferences. The onus is on the government of the day to acknowledge that just because it won the election does not mean it represents the actual plurality of voters, their views and their interests. The sitting government has to rise above the ideology of its particular party in order to take the totality of the electorate and citizenry along with it.

Progressive, liberal, secular, egalitarian citizens of all three big electoral democracies — India, Turkey and the U.S. — have to find ways to protect the diverse and inclusive character of their nations, to strengthen their constitutional foundations, and keep in check the illiberal, populist strongmen who have ascended to power with mandates that are numerically partial and morally compromised.

To quote President Lincoln, “Democracy is the government of the people, by the people, for the people”. Is it really FOR THE PEOPLE?!

Cash is the new Trash

In a new tryst with destiny, once again at the stroke of the midnight hour on November 8-9, Mr.Modi effectively demonetised large denomination notes in India. Of the Rs.16 lakh crore-plus in circulation, Rs.500 and Rs.1,000 notes account for about Rs.14 lakh crore and more than 85 per cent by value of all rupee bills in circulation, as per Reserve Bank of India data.

At the heart of it is the simple proposition that large currency notes are used more to conceal than to purchase. Mr. Modi has converted this one sentence into an economic boom in his true fight against black money and corruption, which is laudable.The U.S. stopped issuing $500 notes in 1969, the European Central Bank halted 500-euro notes early this year, and Singapore killed its $10,000 note and Canada its $1,000 note in 2000. India has one of the highest cash to GDP ratios at 12 per cent (excluding the parallel economy) and despite a well-publicised amnesty scheme, the fear of god had not sunk in. Now it will, with Mr. Modi’s big-bang step.

Indeed, there will be some contraction in money supply and thus a slight deflationary impact, which will cause some inconvenience in the very short term to the average citizen, which the Prime Minister has acknowledged repeatedly in his speech, but this will be compensated by significant benefits in the long term for all law-abiding citizens.

The deflationary impact could be felt in sectors where cash is the main instrument of transaction and perhaps in some asset prices as well, such as in real estate. In the longer term, it will lead to a greater proportion of the economy shifting from black to white. Those who hold large amounts of cash may, if they deposit it in banks and perhaps pay taxes on it, be forced to join the white economy. It may also raise permanently the cost of holding cash by adding a risk premium. This may encourage people to take the certainty of paying taxes in lieu of the uncertainty of holding black cash.The next big hit should be on purchase of benami property which is a national avocation, for that’s perhaps the other big outlet and repository of black money. When the Goods and Services Tax comes into force, the government should do away with stamp duty on land at any stage of the sale; moreover, the tax rates on purchase of property should be dramatically slashed. This apart, election funding reforms and online voting are all big steps in the continuum of reforms, of which this was just the first big step.

The incentives for honesty have been improved, dramatically, with this reform measure, much needed after it was last done in 1978. This will seriously affect the stock of black money but the effect on future flows is unpredictable. However, the flows will perhaps be reduced because of the increased risk perception in cash transactions. Further, the government should take steps to increase mobile penetration, pre-bundled with cash apps, which will make it easier for those who wish to go digital.

Cash is the new trash and the Prime Minister has acted decisively, ending reams of debates, declamations and declarations. Changing human behaviour is the hardest thing to do in the world — Mr. Modi is doing just that in one of the most difficult ecosystems in the world. As a small aside, he has also dealt a body blow to ‘terror money’, and electoral politics in India will never be the same again.