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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

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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PM Narendra Modi Launches Plan to Tackle Water Shortage in India

Modi Unveils Plan to Tackle Water Shortages in India's Heartland States

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PM Modi
India's Prime Minister Narendra Modi speaks to the media inside the parliament premises on the first day of the winter session in New Delhi, India. VOA

Indian Prime Minister Narendra Modi on Wednesday launched a 60-billion-rupee ($842 million) plan to tackle water shortages in the country’s seven heartland states where agriculture is a mainstay.

India, the world’s second-most populous country, faces the worst long-term water crisis in its history as demand outstrips supply, threatening farm output and overall economic growth in Asia’s third-largest economy.

Almost every sector of the $2.6 trillion economy is dependent on water, especially agriculture, which sustains two-thirds of India’s 1.3 billion people.

“Water shortages in the country not only affect individuals and families; the crisis also has an effect on India’s development,” Modi said. “We need to prepare the new India to deal with every single aspect of the crisis.”

The plan launched by Modi would help replenish ground water and boost overall availability in Rajasthan, Karnataka, Haryana, Punjab, Uttar Pradesh, Madhya Pradesh, Maharashtra and Gujarat states, which produce staples such as rice, wheat, sugar and oilseeds.

PM Narendra Modi
The plan launched by Modi would help replenish ground water. Wikimedia Commons

India is the world’s leading producer of an array of farm goods, and nearly 60% of the irrigation for agriculture comes from ground water, mainly through electric water pumps. Subsidised electricity gives farmers an incentive to pump out more water, a key reason behind fast-depleting water tables in the vast country.

Supplying clean drinking water to millions of poor people and reviving moribund irrigation projects were a key part of Modi’s policies for India, where the monsoon accounts for nearly 70% of the annual rains needed to water farms and recharge aquifers and reservoirs.

Nearly half of India’s farmland, without any irrigation cover, depends on annual June-September rains to grow a number of crops.

Drinking water is also an issue, as about 200,000 Indians die every year due to inadequate access to safe water and 600 million face high to extreme water stress, according to the National Institute for Transforming India (NITI) Aayog, a think tank chaired by Modi.

According to UK-based charity WaterAid, about 163 million people in India — roughly 12% of the population — do not have access to clean water close to home.

Also Read- 45% Indians Feel that Enough Steps are Not Taken for Women’s Safety: Survey

Every summer water shortages tend to be more acute in large cities such as the capital New Delhi, Chennai — a car-making center dubbed “India’s Detroit”, and Bengaluru, the country’s software capital.

Modi also exhorted farmers to increasingly adopt drip and sprinkler irrigation and use water-management techniques as well as eschewing water-guzzling crops such as rice and sugar cane. (VOA)