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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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Is UP Chief Minister Yogi Adityanath losing his shine?

His failure to deliver on his promise to get all pot-holed roads fixed by a given deadline last year; the rollback -- under pressure -- in privatisation of the power sector in five cities

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Chief Minister of Uttar Pradesh
Chief Minister of Uttar Pradesh Yogi Adityanath. IANS

Is Uttar Pradesh Chief Minister Yogi Adityanath — in power for just over a year — fast losing his lustre?

Many here feel so.

A litany of complaints about his public conduct, his behaviour with colleagues as well as common people is fast eroding the aura he had built up as the five-time Lok Sabha MP from Gorakhpur who was catapulted to the Chief Minister’s office of a socially diverse and politically volatile state of 220 million people.

Adityanath Yogi is known for his aggression and excellent oratory skills.
Adityanath Yogi is known for his aggression and excellent oratory skills.

Last week, 24-year-old Ayush Bansal shocked many when he broke down in front of media in Gorakhpur and disclosed how the monk-turned-Chief Minister mocked him during a “junta darbaar” where he had gone to complain about a land-grab case in which independent legislator from Nautanwa, Amanmani Tripathi, was involved.

He also accused the Chief Minister of calling him “awaraa” (wayward) and pushing him while throwing his file in the air. “Maharaj ji angrily snapped at me and said my work will never be done and that I should get out of his sight,” Bansal told IANS.

While officials got down to damage control and said the matter was being looked into, the fact that Adityanath behaved in a manner unbecoming of a Chief Minister was neither contradicted by officials nor denied by the ruling party.

Barely had the din over this episode died down when two MPs of the ruling Bharatiya Janata Party (BJP) complained of similar behaviour. In a letter to Prime Minister Narendra Modi, BJP MP from Robertsganj Chhote Lal Kharwar, accused Adityanath of “scolding him and asking him to get out”. The MP said he was deeply pained at the behavior of the Chief Minister as he tried to draw his attention to issues faced by the party faithful.

Ayodhya
In the picture, Yogi Adityanath addressing a rally at Raipur. Wikimedia Commons

“Never did the local administration listen to my plaints and when I went to meet the Chief Minister twice over many issues, ‘unhone mujhe daantkar bhaga diya’ (he scolded me and chased me away),” the lawmaker said in his letter.

The BJP leader has also shot off a letter to the National Commission for Scheduled Castes and Scheduled Tribes, seeking help. Lal also says that definite proof of wrong-doing and corruption presented by him went unheard and unaddressed. What is surprising is that all this happened to a man who is the state president of the BJP’s SC/ST Morcha.

While Modi is learnt to have assured Lal of action, there are other similar murmurs about Adityanath’s rough behaviour. Etawah MP Ashok Dohre has also written to Modi accusing the state police of lodging fake cases against SCs and STs during the Bharat Bandh. When asked why he did not petition the Chief Minister, Dohre said he considered Modi his leader, and thus petitioned him.

Also Read: Little Known Facts About U.P. Chief Minister Yogi Adityanath

Alarmed by the sudden “unease” among the party’s lawmakers, Amit Shah summoned Yogi to New Delhi over the weekend and is learnt to have asked him to mend his ways. Adityanth also met Modi. Interestingly, Deputy Chief Minister Keshav Prasad Maurya, who party insiders admit doesn’t see eye to eye with Yogi, was also called to Delhi at the same time.

Ironically, till not long ago, the 45-year-old Chief Minister was being venerated by the party faithful as a man next only to Modi. Insiders, however, now admit that not only has Adityanath failed to show his “pakad” (hold) on the party, but is also “awkwardly arrogant in his public conduct”, and not very able in his administration.

“He may be a busy man, so have been his predecessors… he remains inaccessible and uses foul and unacceptable language at times,” conceded a senior minister who did not wish to be named. Though stopping short of calling the Chief Minister arrogant, he suggested that “Yogi-ji is better advised to be more courteous and improve his time management”.

A senior party functionary too noted “the changing ways of Maharaj-ji”, though he felt “mood swings and the tongue-lashings could be because he has to handle a big state like Uttar Pradesh”.

Yogi Adityanath
Yogi Adityanath is losing his shine. (IANS)

A senior bureaucrat also alleged that the Chief Minister often “goes off the handle” and could be very acerbic in his dealing with officials. The Chief Minister’s loyalists, however, point out that he does not like people to hang around him and wants officials to deliver fast and work within the system that has been set up. When there is any breach, he loses his temper, a close aide told IANS.

His failure to deliver on his promise to get all pot-holed roads fixed by a given deadline last year; the rollback — under pressure — in privatisation of the power sector in five cities; the poor showing in the Phulpur and Gorakhpur Lok Sabha by-polls and reports that he and his deputy, Keshav Prasad Maurya, don’t get along well have already rung alarm bells in the establishment, sources said. IANS