4th Anniversary of Note Ban:

Real aims and false claims

8th November 2020 marks four years since the day when Prime Minister Narender Modi announced at 8 pm, that all 500 and 1000 rupee notes in circulation would be considered illegal tender after midnight. Prime Minister Modi presented the Note Ban as a crusade against the growing inequality of wealth, against corruption and terrorism. He claimed that the aim was to unearth the black money hoarded by corrupt persons and deploy it for the benefit of poor hardworking people. People were given 50 days to deposit the 500 and 1000 rupee notes in their possession in banks.

The immediate and long term result of the Note Ban was the large scale destruction of the livelihood of crores of workers, peasants, self-employed people and small businesses.

On the other side, the biggest capitalist monopolies, the Tatas, Ambanis, Birlas and others welcomed the Note Ban. The destruction of small and medium industry and services, the ruination of the peasantry, and the push towards a digital economy opened up enormous opportunities for these capitalist monopolies to expand their empires and increase their wealth. The biggest capitalist monopolies moved in to set up digital payment banks which have been highly profitable for them. The huge number of digital payment companies and payment banks that have come into operation all over the country since 2016 confirms this.

Note Ban has been part of the strategy to make the people pay for resolving the banking crisis caused by capitalist loan defaulters and pave the way for the super-rich to keep growing richer as fast as possible. The past four years have confirmed this again and again. While Note Ban, followed by the GST and the Lockdown have hit the economy hard, and masses of workers, peasants and working people have been suffering, the biggest capitalist monopolies have been rapidly amassing wealth.

On November 8, 2020 the, Prime Minister Modi tweeted that “Demonetisation has helped reduce black money….” The Prime Minister is not talking anymore about reducing the gap between the rich and the poor, or ending corruption and terrorism. It is difficult even for the rulers to deny that neither of these have been eliminated. Terrorism continues unabated because the Indian ruling class needs it as a justification for unleashing escalated state terrorism against the people. Global sponsors of terrorism use many modern channels of financing; they do not depend on counterfeit notes.

Corruption continues unabated, starting from the highest levels of the government and state. The refusal by certain big capitalists to pay back loans worth lakhs of crores of rupees from public sector banks, is one of the biggest corruption scandals and exposes the nexus between the capitalist borrowers, heads of the banks and financial institutions and the highest levels of the state. Numerous other corruption scandals, including the recent multi-billion Rafale defence aircraft scandal, show that the claim of fighting corruption was a total lie.

Claims of reducing black money is totally hollow.

On August 29, 2018, the Reserve Bank of India announced that it had received Rs 15.31 lakh crores of Rs 500 and Rs 1000 notes, or 99.3 % of the notes under circulation as on November 2016.

When the government announced the Note Ban, it said it expected to recover nearly 4-5 lakh crore of unaccounted black money in the form of cash. This was stated by the Attorney General of the government in the Supreme Court in November 2016. According to the Finance Minister Nirmala Sitharaman Rs 900 crores of undisclosed income was seized in the first four months after demonetisation. And in the last three years, assets worth Rs 3,950 crores were seized. What has been seized is a drop in the ocean.

Four years later, it is very clear that the Note Ban did not reduce the gap between the rich and the poor. Nor has it ended corruption or terrorism.

The government of India has been lying about the real aims behind the Note Ban. It will not accept that its aim was to benefit the biggest Indian and foreign capitalist monopolies at the expense of the workers, peasants, and broad masses of people of our country.

Below we provide a link to the pamphlet entitled On the Note Ban: Real Aims and False Claims, published by the Communist Ghadar Party of India in January 2017.

On the Note Ban: Real Aims and False Claims

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