“Not a bad move, but a poorly planned one”: Subramanian Swamy on Demonetisation
Manipal: As a part of the diamond jubilee celebrations of the Manipal Institute of Technology (MIT), Subramanian Swamy delivered a speech on the ‘Impact of Demonetisation on Indian Economy’ here on January 28, to mark the start of the diamond jubilee lecture series.
Talking of both the positive and negative effects of demonetisation, he called the move a ‘good measure but poorly planned’ one. “Lack of preparation by the Finance Ministry is why the plan did not work out well. The Finance Ministry was ought to be prepared for demonetisation after getting to know about the plan in 2015,” Swamy remarked.
Addressing a crowd consisting of students and faculty alike, Swamy elaborated on his suggestion to the government regarding money deposit. According to his suggestion, he had asked the government to take 25 percent of the deposited money of an individual, allow a 25 percent of withdrawal and keep 50 percent as a part of fixed deposit with 2 percent interest. However, the government sought 50 percent government share of the deposited money of an individual, allowed a 25 percent withdrawal and 25 percent as fixed deposit, with 0 percent interest. Deliberating on the same Swamy elucidated, “Who would like the government to take 50 percent of his money?”
Speaking on what constitutes a successful policy, Swamy identified the phases as the objective of a policy, priority, strategy to achieve the objectives according to the priorities and the necessary machinery and resources to execute the strategy. “Although demonetization has been able to curb terrorism in India to some extent, it has failed to achieve its objective of eliciting black money. Only redistribution of black money has taken place,” he elaborated.
The National Herald case and the controversies regarding Jayalalitha, both of which had an active role of Swamy, was brought up by him in the course of his speech. “I had brought out certain names when it came to the National Herald case. I had done the same for Jayalalitha too although it was difficult because she was a friend. The secret of fighting black money is to target the one at the top. The public will fear corruption only when the big guy is put behind the bars,” Swamy observed.
Addressing the functioning of the current economic system and the evasion of taxes, Swamy explained that abolishing Income Tax, according to him, would produce an immediate relief as the need of the hour was to change the economic system. He furthermore stated that the Service Tax was the most ‘idiotic tax’ ever to be introduced. “The person who introduced Service Tax should be taxed for the lowest IQ ever recorded,” he exclaimed.
Swamy, in regard to the previous government, also questioned many measures introduced by them. He stated that the policy of participatory notes is only encouraged in India and plays a major role in black money transactions, which many people remain unaware of. Swamy remarked, “A note which has no date, no security and no serial number is actually legal in India. A large part of our foreign investment is actually participatory notes. Even SEBI doesn’t question participatory note-holders. What a brilliant idea by the previous government!”
Subramanian Swamy also highlighted the issue which surrounding the removal of former Reserve Bank of India Governor, Raghuram Rajan. “One reason I was keen on sacking Raghuram Rajan was because he kept on raising interest rates which was allowing collapse of small and medium industries. The Prime Minister is a bold man and he went ahead with my suggestion,” revealed Swamy.
Providing final remarks, he mentioned that despite the collateral damage caused by the failed move of demonetization, it could still be rectified. Thanking MIT for hosting him, Swamy conclusively urged the students to be resolved to fight and to develop an attitude of calculated risk taking, which would shape the future of a country with the largest young workforce.
Edited by Anirban Paul