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Modi’s Demonetization will hit upcoming Election Campaigns in Punjab and Uttar Pradesh

Modi's demonetization drive has so far proven popular among increasingly aspirational voters who are tired of corruption

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People queue outside a bank to exchange and deposit their old high denomination banknotes in Masuda village in the desert Indian state of Rajasthan, November 15, 2016. (Representational image)REUTERS/Himanshu Sharma
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By Rupam  Jain and Tommy Wilkes

New Delhi, November 17, 2016:  Indian Prime Minister Narendra Modi’s shock ban on high-value banknotes will hit the war chests of his rivals before a key state election next year, sparking accusations that his strike against “black cash” will unfairly boost his party’s chances.

People queue as they wait for the post-office to open to exchange their old high denomination bank notes in the early hours, in New Delhi, India, November 16, 2016. Picture taken November 16, 2016. REUTERS/Adnan Abidi
People queue as they wait for the post-office to open to exchange their old high denomination bank notes in the early hours, in New Delhi, India, November 16, 2016. Picture taken November 16, 2016. REUTERS/Adnan Abidi

That is despite widespread anger among millions of Indians forced to queue outside banks to change small amounts of old money for legal tender, possibly denting support for the ruling Bharatiya Janata Party (BJP) at least in the short term.

Opposition politicians are scrambling to redraft campaign plans ahead of the ballot expected early next year in Uttar Pradesh, a state of more than 200 million people which will be crucial to Modi’s long-term plan for re-election in 2019.

A cashier displays the new 2000 Indian rupee banknotes inside a bank in Jammu, India November 15, 2016. REUTERS/Mukesh Gupta
A cashier displays the new 2000 Indian rupee banknotes inside a bank in Jammu, India November 15, 2016. REUTERS/Mukesh Gupta

The prime minister last week outlawed 500 and 1,000 rupee notes in a drive to rein in corruption and a shadow economy that accounts for a fifth of India’s $2.1 trillion gross domestic product.

People queue outside a bank to exchange and deposit their old high denomination banknotes in Masuda village in the desert Indian state of Rajasthan, November 15, 2016. REUTERS/Himanshu Sharma
People queue outside a bank to exchange and deposit their old high denomination banknotes in Masuda village in the desert Indian state of Rajasthan, November 15, 2016. REUTERS/Himanshu Sharma

With no state election funding, illicit cash is the lifeblood for political parties that collect money from candidates and businessmen, and then spend it to stage rallies, hire helicopters and hand out “gifts” to win votes.

A woman checks her documents before depositing her old, high denomination banknotes outside a bank in Khoraj village on the outskirts of Ahmedabad, India, November 15, 2016. REUTERS/Amit Dave
A woman checks her documents before depositing her old, high denomination banknotes outside a bank in Khoraj village on the outskirts of Ahmedabad, India, November 15, 2016. REUTERS/Amit Dave

Spending on the Uttar Pradesh election is forecast to hit a record 40 billion rupees ($590 million), despite the cancellation of big notes.

A farmer smokes while sitting on sacks of paddy crops as he waits for customers, one week after the Indian government withdrew the circulation of high denomination banknotes, in Sanand village on the outskirts of Ahmedabad, India, November 15, 2016. REUTERS/Amit Dave
A farmer smokes while sitting on sacks of paddy crops as he waits for customers, one week after the Indian government withdrew the circulation of high denomination banknotes, in Sanand village on the outskirts of Ahmedabad, India, November 15, 2016. REUTERS/Amit Dave

MIXED REVIEWS

Modi’s demonetization drive has so far proven popular among increasingly aspirational voters who are tired of corruption, although views among the broader population and economists are divided over the efficacy and fairness of the move.

A woman sits in front of a closed bank as she waits for it to open early in the morning in Chandigarh, India, November 15, 2016. REUTERS/Ajay Verma
A woman sits in front of a closed bank as she waits for it to open early in the morning in Chandigarh, India, November 15, 2016. REUTERS/Ajay Verma

Opposition politicians have united to decry it.

“We will have to plan the entire election strategy all over again,” said Pradeep Mathur, a senior Uttar Pradesh leader of the Congress opposition party that was trounced by the BJP in 2014 national elections.

Workers unload boxes carrying Indian currency outside a bank in Chandigarh, India, November 15, 2016. REUTERS/Ajay Verma
Workers unload boxes carrying Indian currency outside a bank in Chandigarh, India, November 15, 2016. REUTERS/Ajay Verma

His concerns reflect a view that the BJP, with more members than its rivals and close ties to big corporate donors, can survive the cash crunch better, helping Modi win Uttar Pradesh and four other territories heading to the polls early in 2017.

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For Modi, winning India’s main battleground state is vital to strengthen his party’s position in the upper house of parliament, where it is still in the minority, before seeking a second term in the 2019 general election.

“Their calculation is that this is going to hurt everybody, but in relative terms the BJP is going to come out stronger,” said Milan Vaishnav, a South Asia expert at the Carnegie Endowment for International Peace in Washington.

According to the Delhi-based Center for Media Studies (CMS), which tracks campaign financing, the BJP relies on cash for less than two-thirds of its funding in a state like Uttar Pradesh.

Its regional rivals use cash to cover 80 to 95 percent of campaign spending.

People crowd the entry gate of a bank to exchange and deposit their old high denomination banknotes in Jammu, India November 15, 2016. REUTERS/Mukesh Gupta
People crowd the entry gate of a bank to exchange and deposit their old high denomination banknotes in Jammu, India November 15, 2016. REUTERS/Mukesh Gupta

SCALING BACK

Demonetization will force Congress to hold smaller rallies, said Mathur, and there will be fewer “freebies” for voters.

Other parties are also adjusting plans in Uttar Pradesh. Ashok Agarwal, a politician with the incumbent Samajwadi Party in the city of Mathura, will have to rely more on his team of 1,000 volunteers to connect with voters.

In a bid to limit the squeeze, parties are paying workers to queue at banks and swap old notes for new ones and evade scrutiny from tax inspectors, said party activists in Mathura.

Event managers, whose businesses usually boom at election time, are worried.

“No political party except the BJP wants to organize big rallies before January. All of them depend on cash,” said Rajesh Pratap, who has provided loudspeakers, outdoor air conditioners and security to party rallies for over a decade.

Mayawati, a powerful former leader of Uttar Pradesh who Modi’s aides view as his biggest electoral threat in the state, says the demonetization timing appeared highly political.

BJP officials accuse Mayawati of hoarding “black” money garnered from selling tickets to candidates to fund her campaign.

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One senior official and a close aide to Mayawati said some of her party’s rallies would be axed and replaced by more door-to-door campaigning.

“Last month … we had to bring over 300,000 villagers from across UP (Uttar Pradesh) to Lucknow city for a day … It’s not just us, but every political party spends money at grassroots level to win votes,” the official said.

People sit on a floor as they wait for a bank to open in Chandigarh, India, November 15, 2016. REUTERS/Ajay Verma
People sit on a floor as they wait for a bank to open in Chandigarh, India, November 15, 2016. REUTERS/Ajay Verma

Modi has not explicitly linked demonetization to a clean-up of electoral funding, but officials in his party say rivals should have heeded his warnings earlier this year that he was serious about clamping down on “black” cash.

“You cannot call it a bolt from the blue because Modi … had dropped sufficient hints that he will take strict action,” said a close aide.

“MOTHER OF ALL CORRUPTION”

While an immediate liquidity crunch for parties is clear, the longer-term impact on funding is less so.

The symbiosis between businessmen seeking favors and parties needing cash has sent campaign funding soaring.

In southern Andhra Pradesh state, three in four voters reported receiving money from parties during the last general election, according to research by CMS.

The group’s chairman N. Bhaskara Rao describes electoral corruption as “the mother of all corruption” in India.

In the 2014 election, when Modi swept to power with an electrifying campaign that included 3D holograms of him giving speeches in villages across India, parties spent a record 370 billion rupees ($5.4 billion), CMS estimated.

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They have also long circumvented rules and learned to avoid using cash – parties get donors to acquire equipment for rallies directly, or local traders to buy gifts for would-be voters, such as mobile phone credits. (Reuters)

(Additional reporting by Mayank Bhardwaj in MATHURA, Sharat Pradhan in LUCKNOW and Subrata Nagchoudhury in KOLKATA; Editing by Douglas Busvine and Mike Collett-White)

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BJP Offers Christians a Pilgrimage to Jerusalem. Is Religious Pilgrimage A New Playground For The Political Parties?

This would not be the first time that India has bankrolled pilgrimages for the Christians. Before this, the government had subsidized the Haj pilgrimage for the Muslim community

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In a country like India, such miscalculated steps could backfire in form of communal rights and the results could be unprecedented. Wikimedia Commons
In a country like India, such miscalculated steps could backfire in form of communal rights and the results could be unprecedented. Wikimedia Commons
  • The political parties (BJP and Congress ) are promising a free trip to Jerusalem for the pilgrimage in the coming local elections of the eastern states of India
  • The Christian population in Meghalaya and Nagaland is almost 75 percent and 88 percent respectively
  • After the Supreme Court’s intervention, the government had drafted the policy to abolish the Haj subsidy in a phased manner by 2022

The Campaign promises during the elections times are quite bizarre nowadays, from “I’ll cut your taxes,” to “vote for me, and I’ll set you free.”

In the coming local elections in the Christian- majority state of Nagaland in India the agenda by the rival BJP (Bharatiya Janata Party) and Congress parties are unique: “Vote for us and get either a free or a heavily subsidized pilgrimage to Jerusalem.”

Yes, you read it right. The political parties are promising a free trip to Jerusalem for the pilgrimage. The offer has been put up by the Prime Minister Modi- led BJP for the upcoming elections. Even the local partners of the Congress party are treading up the same path.

Recently, the central government decided to withdraw subsidy given to hundreds and thousands of Muslims for the annual Haj pilgrimage. Wikimedia Commons
Recently, the central government decided to withdraw subsidy given to hundreds and thousands of Muslims for the annual Haj pilgrimage. Wikimedia Commons

The BJP has not made it clear yet if it is offering the scheme to all of India’s Christians, or only to Christians in the northeast, or only to Christians in Nagaland. The Christian population in Meghalaya and Nagaland is almost 75 percent and 88 percent respectively. Nagaland is one of smallest states of India, with the population of just under two million people.

Also Read: Muslim women can now travel for Haj without Mahram

As per the Tourism Ministry figures, around 58,000 Indian tourists came to Israel in 2017, a 47% increase from 2015.

The elections are scheduled for the February 27 in three northeastern states – Meghalaya, Nagaland and Tripura – later this month.

The AIMIM leader Asaduddin Owaisi also tweeted on the double standard of the government and lashed out at the government for its discriminatory decision, ending Haj subsidy but allowing subsidies to continue for Hindu pilgrimages like the Mansarovar Yatra.

This would not be the first time that India has bankrolled pilgrimages for the Christians. Before this, the government had subsidized the Haj pilgrimage for the Muslim community. But recently, the central government decided to withdraw subsidy given to hundreds and thousands of Muslims for the annual Haj pilgrimage. The government cited the reason for the subsidy withdrawal as they wanted to utilise the funds saved from withdrawing the subsidy for the education of minorities, particularly girls. After the Supreme Court’s intervention, the government had drafted the policy to abolish the Haj subsidy in a phased manner by 2022.

Also Read: Government ends Haj subsidy as part of a new policy

The scheme is a clear cut example of hypocrisy and opportunism, especially considering the cancellation of Haj subsidies. It seems quite contrary, on the one hand, the government is cutting down the benefit scheme for one section of the society and on the other hand, some other community is been offered the same thing. Such moves bring out the double standards of the political parties just for the sake of vote bank. In a country like India, such miscalculated steps could backfire in form of communal rights and the results could be unprecedented.

In 2011, Nigeria also did something same as that of India. For many years, their government financed a trip to Mecca for Muslims, leading to some 42,000 Nigerians visiting the country. But with the change in the government, subsidies have been cut considerably and now a 12-day pilgrimage costs around 2000 dollars. The change in stance has resulted in 78% decrease from 2011.