Saturday 26 November 2016

The real reason behind demonetization

The Indian government cities various reasons for demonetization, namely to reduce

  • black money
  • terrorism financing
  • duplicate currency
These may be side benefits of demonetization, but the real reason of demonetization is totally different. The real reason is that BJP should win upcoming elections.

In India, crores are spent during elections. If a politician does not spend this amount, he/she will likely neither get a party backing nor win. A major part of this amount is spent in cash. BJP has eliminated ₹500 and ₹1000 notes a few weeks before election and allowed only a paltry sum to be withdrawn as cash from bank accounts. It is likely that BJP has made cash arrangements before making the public announcement of the ban.
So now BJP has the cash, but all opposition parties have no cash. How will the opposition parties conduct rallies, gatherings, etc. The opposition's life blood has been sucked out by making their cash unusable and accounts frozen.
So BJP has a major advantage in upcoming elections.

However, BJP leaders probably did not foresee a side-effect of demonetization. Lot of poor and middle-class people are impacted by this decision. They are facing hardships. So these voters may be driven to cash-starved opposition.

Demonetization is BJP's gamble. No single opposition party can now face BJP. All opposition parties have to get together and then fight BJP in coming elections. Only time will tell whether this gamble of Demonetization benefits BJP or not.


No comments:

Post a Comment