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What BJP’s win in Phase 1 of Maharashtra municipal council polls signifies

mandarsawant
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What BJP’s win in Phase 1 of Maharashtra municipal council polls signifies

The first phase of the Municipal Council polls were held in Maharashtra on Sunday, 27th November 2016. The counting was done on Monday, 28th November 2016. This is a four phase election that will run till February 2017. These elections cover the semi urban areas of Maharashtra. Many of these towns have just been upgraded from gram panchayat to municipal council.

Media publicized these polls as litmus tests for the Devendra Fadnavis government and later also made it a referendum of rural and small town Maharashtra on demonetization.

BJP has always been an urban party in Maharashtra, with some pockets of influence in rural Maharashtra. These municipal council polls are a great indicator towards BJP’s future growth as these towns represent the future of a rapidly urbanizing Maharashtra (roughly 40% population is urban).

To set the context for these polls, following was the party wise strength (measured in number of corporators) in these areas in 2011:

2011 Maharashtra Results
Results of 2011 election

Thus we can see that BJP historically does not have a strong grass root party organization in rural and semi urban Maharashtra. These elections were a test of whether BJP has leveraged the 2014 Vidhan Sabha results and struck roots in these areas.

Another masterstroke by CM Devendra Fadnavis was introduction of direct election of nagar adkhyashkas (equivalent to mayors and henceforth referred to as council head). The voters would vote for their corporators (or nagarsewak) as well as for their council head separately. This system is an interesting experiment and seems to be on the lines of direct election of mayors in major countries of Europe and US.

When the counting started, BJP was trailing the other three main parties. Marathi news channels and journalists like Rajdeep Sardesai were quick to link this to a negative vote on the demonetization initiative of the Modi government. However, contrary to the initial trend, BJP started taking lead in the council head elections.

There were many towns in which the BJP did not have majority in the council but got their council head elected. For example in Karad (ex-CM Prithviraj Chavan’s stronghold) Congress won 16 councilor seats, NCP 6 councilors and BJP just 3 councilors. However, BJP’s candidate won the council head post.

Congress and NCP were gaining in Marathwada region where Dhananjay Munde (NCP) won the battle of the cousins by beating Pankaja Munde (late Gopinath Munde’s daughter) in Parli municipal council. It was a big loss for Pankaja who has made it a fight for her prestige. This also sets her back in the popular perception of being a challenger to CM Devendra Fadnavis.

BJP and Sena have gained in North Maharashtra (Khandesh) at the expense of Cong and NCP. BJP took a runaway lead in Vidarbha (from where Fadnavis, Nitin Gadkari and state finance minister Sudhir Mungantiwar hail) by winning 25/44 of the council head elections, including 6/6 in Wardha district.

In what could come as a 440 volt shock to Congress and especially Sharad Pawar, BJP won more council heads in Western Maharashtra, an area they were largely non-existent till that historic May of 2014. BJP gains were in Sangli, Solapur and Kolhapur. They are expected to gain in Pune district too in the second phase of elections in mid-December 2016.

Konkan was evenly shared by all parties with ex CM Narayan Rane coming back from the dead to win majority for Congress in Sawantwadi, Vengurla and Devgad municipal councils. However it was not to be a big win for him as BJP and Sena denied him the council head positions in Vengurla (BJP), Sawantwadi (Sena). This prompted the Marathi media to use the famous words of Chhatrapati Shivaji ‘Gad aala, paan Sinha gela’ (We won the fort but lost our lion) when his army won the impregnable Kondana fort in Pune from the mughals, but lost his childhood friend and warrior Tanaji Malusare. In the context of these elections, Rane had won the majority in the councils but lost the council head posts.

Number of Council Head posts won

Council Heads

Number of Councilor Posts won (comparison with 2011)

Councilor Post

The conclusion that can be drawn from these results is the following,

  1. These results are a thumbs up given to CM Devendra Fadnavis who has taken up many welfare measures and infrastructure projects. This can also be taken as an indirect endorsement of the success of the #JalYuktShivar (a micro irrigation scheme). Many of these municipal councils are recently converted from gram panchayats and some would have experienced the benefits of this programme.
  2. BJP’s strength in semi urban Maharashtra is here to stay and BJP seems to have dug some roots here. Critics who said that BJP win was due to Modi wave of 2014 should now do more analysis.
  3. There is no flash anger against the Modi government for demonetization. Though it may be early to know if demonetization has added new voters but it has definitely not angered most of the voters. PM Modi can be reassured by this verdict and keep getting bolder in his anti-black money mission. Though people want to see tangible benefits of the scheme but they are ready to cut slack and give him much more than 50 days.
  4. Voters have rejected entrenched political families in their bastions. Days of dynasty seem to be coming to an end rather soon.
  5. CM Devendra Fadnavis is now the tallest BJP leader in Maharashtra and has absolutely no challenge from his local adversaries. Upstarts like Pankaja Munde have been dealt with a rude lesson by the electorate.
  6. The results portend well for BJP in the remaining three phases of municipal council polls as well as the municipality polls in February 2017. The big prizes on stake are Mumbai, Thane, Nashik, Nagpur, Pune and Aurangabad municipalities.

Narendra Modi has forgotten the 2014 elections, and this is why he has done that

Rahul Roushan
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Narendra Modi has forgotten the 2014 elections, and this is why he has done that

In May 2014, Narendra Modi recorded an unprecedented victory in the history of contemporary India. I have deliberately called it a Modi victory rather than a BJP or NDA victory, because it indeed was victory of a personality called Narendra Modi.

While hardly anyone gave Congress any chance of it returning to power, and some people talked about Modi wave, no one knew about this Modi tsunami that would eventually strike the motley of pollsters, “intellectuals”, and of course, the Congress party.

People just couldn’t stop talking about 2014 after the results were out. Well, even otherwise it was a hotly debated election, but the results made it burning hot. How it happened, why it happened, does this change India forever, and all kinds of things were discussed.

Whether Modi haters or his ‘bhakts’ – both love to go back to the last general elections, and remind or warn each other that it will repeat or it will not repeat in 2019. Books were written and are still being written about the 2014 elections.

It’s been around 30 months now, but it appears that most people can’t get over the 2014 verdict yet.

Except one man – Narendra Modi himself.

He came, he saw, he conquered. And he has moved on.

He doesn’t open YouTube to watch the dejected faces of NDTV anchors or of likes of Rajdeep Sardesai discussing the 2014 mandate and feel good about it.

Okay, that sounds a bit too childish for a Prime Minister to do, but what if I told you that he has almost forgotten 2014? That he is not making policies based on the 2014 mandate. And that he is not looking to repeat 2014 at all.

Because of the simple reason that he will not be a challenger in 2019. He will be the incumbent. 2014 factors will not repeat in 2019.

But there is another election that he has in mind – that of 2004. When BJP government led by Vajpayee lost after everyone thought Atal Wave was intact.

If there is any election and it’s repeat that Modi is thinking about, it’s the 2004 general elections and he is thinking about stopping its repeat.

It’s rather surprising that 2004 election results didn’t see as many books or debates germinating out of it as 2014 could. Perhaps those who like to write books were busy celebrating BJP’s defeat. In fact, Arundahti Roy literally said that darkness had passed and it was time for celebration.

Journalists might have got too busy with celebratory parties or with getting a new union cabinet formed – a hitherto unknown journalistic role that people discovered thanks to Niira Radia – so 2004 didn’t see the kind of microscopic analysis 2014 has seen.

Nonetheless, there were some analyses and conclusions that are largely accepted by all:

  • Vajpayee’s pro-market policies didn’t have immediate short term positive impacts that could be felt by the masses, especially in the rural India or by the urban poor. A booming Sensex didn’t make sense to them.
  • BJP’s over emphasis on “India Shining” and technology didn’t cut ice with the aforementioned section. They could connect with Congress’ campaign of “aam aadmi ko kya mila?” (What did the common man get in all this India shining business?)
  • Vajpayee kept a moderate outlook and BJP actively tried to woo minorities, especially Muslims, due to which the core Hindutva group was not energised enough to actively campaign and vote.

And these are the factors that Narendra Modi will be keeping in mind when he thinks 2019, rather than getting stuck on to what happened in 2014. So while the 2014 mandate might look like a directive for Modi to go aggressively after Gandhis and to make more and more free-market policies, his policies will be decided by what happened in 2004.

The political incidents in 2014 and 2015 would have only strengthened this belief that the challenge before Modi is not to repeat 2014 but to stop the repeat of 2004. Because the usual suspects are repeating, purposely or pavlovianly, what they did to Vajpayee.

There were cries of “rising intolerance” during Vajpayee too, when “fringe groups” disturbed shooting of a movie Water, incidentally with screenplay by Anurag Kashyap of “btw, Bharat Mata Ki Jai” fame, and HRD Minister Murli Manohar Joshi was accused of interfering with educational institutes just like now they are accusing the Modi govt of stifling universities.

While the above two criticisms are good for TV debates and op-eds in New York Times, in 2015, BJP did face defeats first in Delhi and then in Bihar. The defeat in Bihar would have especially hurt Modi because he was the chief campaigner there.

Apart from a formidable opposition that had allied as ‘mahagathbandhan’, what hurt BJP was the constant messaging by the Janta Parivar that Modi was working only for the rich, for Ambani-Adani (something I had touched upon in my article after Bihar assembly results). Basically the same “aam aadmi ko kya mila” taunt that brought down BJP in 2004.

And which is why Modi is now on a mission that the poor don’t believe this again. The demonetisation announcement is a part of that, where the poor believe that the rich with ill-gotten money are being forced to burn their wealth, while their own money is safe (the demonetisation ads released by the government actually plays up this “my money is safe” part).

Today, the government announced that the there will be surcharge on tax and penalty on unaccounted deposits, exclusively to be spent on welfare schemes for the poor. Not only that, 25% of such deposits will be locked in for government’s anti-poverty scheme.

If the government can achieve what it is aiming for in shape of these welfare spends – which is not exactly right-wing free-markets economics that 2014 supposedly voted for – Modi will be able to do what Vajpayee couldn’t do i.e. to convince the poor that the government is working for them.

And this is why the opposition is rattled the most. They too understand that Modi is trying to stop the repeat of 2004.

In 2004, there was stampede in Uttar Pradesh when poor women rushed to collect free saares distributed by BJP. That was not India Shining. Modi is working to stop repeat of such errors. As of now, such images have been seen only in Rahul Gandhi’s rallies, where fortunately there has been no stampede but poor people can be seen rushing to collect free cots (khaat). That’s indictment of Congress’ rule of decades, where the poor have to fight for cots.

The theory that Modi has gotten over 2014 can also be verified from the fact that he disbanded the tech-savvy team of Prashant Kishore soon after the victory. People wondered why did he do that, and after the Bihar defeat, they thought it was a blunder. But that was another signal that Modi had decided to start afresh after the victory. 2014 was history.

That leaves the last point – the core Hindutva voters. How does Modi make sure that they don’t lose the steam as is argued to have happened in 2004?

Well, here Modi’s job will perhaps be done by his haters. Even in 2014, he didn’t need to make any communal or divisive statements, but the Hindutva core was all geared up. Because his haters called him all names – a fascist who must be resisted if India has to be stopped from becoming a Hindu Rashtra. The elections were polarised for this group by the secularists, not by Modi.

Even now the Hindutva core group is not exactly happy – as the government has not freed temples, or removed RTE that exempts minority run schools, or acted on any other pet projects like Ram Temple. But they will be energised and polarised by the hyperactive secularists of this country, who simply can’t change.

Just see the latest example of Triple Talaq or Uniform Civil Code. It is not BJP, but Modi haters who are making it a Hindu vs Muslim issue. In fact forget these issues, even demonetisation has been made into Hindu vs Muslim issue!


Well, they say that history repeats itself, and Modi’s challenge is to make sure it doesn’t. As of now, he appears to have a plan to stop that, and create history again.

Update, on May 24, 2019: He has done it!

The connection between Zakir Naik’s NGO and the Congress

Hemant Bijapurkar
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The connection between Zakir Naik’s NGO and the Congress

The controversy of donations made by the Islamic Research Foundationm (IRF) to the Rajiv Gandhi Charitable Trust (RGCT) doesn’t seem to be abetting. As per a report published in TOI, apart from a Rs 50 lakh donation RGCT received from the IRF, there was another donation amounting to Rs 25 lakh applied for by the trust. Sonia and Rahul Gandhi are the trustees of this particular trust.

The donation made by Zakir Naik’s IRF to the Rajiv Gandhi Foundation in 2011 was unearthed recently and the whole amount was returned by the trust around 6 months back when Zakir Naik and his NGO came under public scanner.

Abhishek Manu Singhvi in Congress’s defense stressed that the donation was made before IRF’s embroilment in the terror and forced conversion allegations, and that the donation was an unsolicited one time thing. So assuming his defense to be true lets now look at the following points.

First the manner in which the IRF tried to donate the 25 lakh to the Rajiv Gandhi Charitable Trust: It didn’t make a direct donation. It transferred the amount to the Mumbai based M H Saboo Siddique Maternity and General Hospital with the instructions of having the hospital route the funds to the Rajiv Gandhi Charitable Trust.

The hospital was paid Rs 30 lakh out of which Rs 5 lakh were assigned for its own utilization and the rest were to be passed on to the RGCT. Incidentally there were reports in 2015 of the hospital getting shut down by the BMC as the hospital was flouting its PPP norms by running a full super specialty hospital even though it only had permission to run a Maternity Home. Interestingly the whole amount was finally used up by the hospital itself after the IRF kept flip flopping on the end beneficiaries like instructing the amount to be transferred to Kamla Nehru Memorial Hospital and later to an organisation named KARM.

So if IRF was a totally non-controversial organisation at that time as claimed by the Congress spokesperson, why wasn’t the amount directly received by RGCT in the first place?

Secondly, if the amount in itself was unsolicited, why did the resolutions passed by the IRF claim that the amount was released after it received applications from the RCF and RGCT respectively. Should Congress not be attacking Zakir Naik for making things up?

Thirdly, if the donations were indeed a one-off thing as claimed by Mr Singhvi then how come reports have surfaced of two donations of 50 lakh and 25 lakh respectively.

Now apart from this, lets look at the Rajiv Gandhi Charitable Trust for a moment. They chiefly have two areas of charity namely in the field of Eye care and most importantly ‘Women Empowerment’. If the TOI report is to be believed, the RGCT asked for funds partly to utilize them for women’s empowerment. And they reached out to NGO of Zakir Naik, who has famously condoned ‘light beating‘ of a wife by her husband. The video of Zakir Naik’s speech was uploaded back in Feb 2011 so it was before or around the time RGCT asked for funds.

The relationship between the IRF and the Congress doesn’t end with donations, in October 2012 senior Congress leader Digvijaya Singh was seen sharing the stage with Zakir Naik.

So the party has much to answer than to virtually claim that Zakir Naik was in one-sided love with the party, where his NGO kept donating to trusts and organisations linked with Congress or its leaders.

Demonetisation, Prohibition, Nitish and the current political equations of Bihar

Rahul Raj
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Demonetisation, Prohibition, Nitish and the current political equations of Bihar

Bihar has completed one year of the Mahagatabandhan government. From the State’s Health Minister and Lalu Prasad’s elder son Tej Pratap Yadav prescribing “horse-riding” to curb pollution and to skirt traffic jams to the Chief Minister banning alcohol with stringent rules, within an year Bihar has witnessed multiple pleasant and unpleasant surprises.

Recently I was traveling across a few cities of Bihar to attend wedding ceremonies of a close relative. Using this as a good opportunity, I interacted with locals from these places to know their views on political developments in India, in Bihar, and in their localities.

Demonetisation is the latest buzz everywhere. So is it in Bihar too. I heard people intensely discussing it at various places – the yellow building of Patna Airport, across the congested narrow streets opposite to Takht Sri Patna Sahib, on the dilapidated semi-functional Mahatma Gandhi Setu, and inside the villages of Siwan, which was once a stronghold of Mohammad Shahabuddin.

The opinions were mixed. Since I was there to attend a wedding, I was also getting a first-hand experience of operational problems which people are facing due to cash crunch. Band wallas, decorators and caterers had to manage by taking a mix of cheques, old 500 notes and valid notes. There was inconvenience in the air, but things didn’t stop due to it.

I experienced similar atmosphere in the village of Siwan where the wedding was scheduled and where one could hardly find someone using net banking. Not only that, when I enquired some locals of Siwan (a traditional RJD belt), they told me that they are very satisfied with the demonetisation scheme announced by Modi. While many people were hopeful about demonetisation, many were expressing anger due to distress caused by long queues and unavailability of cash needed to pay to daily wage labourers. The ratio, however, was very inclined towards people who are supporting the scheme.

It was impressive to notice the penetration of WhatsApp into interiors of Bihar. People showed me WhatsApp messages related to demonetisation – some of which were official communications, some were rumors, some were nationalistic jibes, and most were jokes. One of my relatives read a WhatsApp joke to me which roughly meant: “मोदी का भरोसा नहीं। कल अचानक ये भी ऐलान कर सकता है कि ट्रेन की पटरी करंट बिछवा दिया जायेगा ताकि लोग उसपर शौच ना करें।” (Translation: Don’t trust Modi. Tomorrow he may also announce that railway tracks will be electrified so that people don’t defecate on them.)

Another interesting buzz which was going viral in Patna was that Narendra Modi’s official app start playing Modi’s speech when it is exposed to a 2000 rupee note. People were connecting it to the nano chip rumor which went viral after the first news on 2000 rupee note broke-out. Soon I found that some pranksters have created multiple variants of Modi KeyNote Apps which plays his speech.

Modi ke Note
Many were confusing it with a feature on official Narendra Modi app – the rumours are of all kinds.

So in essence, Bihar was dealing with demonetisation with overall support, some complaint, some anger, and some fun.

On politics inside Bihar, people said that the mahol (ambiance) is not the same as it was after the announcement of assembly election results. The jingles of “Bihar mein Bahaar ho” are no more soothing to their ears. Despite several claims by Nitish Kumar that crime has dipped inside Bihar, people say that crime has gone up. Gundagardi and Rangdaari are back. Only a few days back, a correspondent of Hindi daily Dainik Bhaskar named Dharmender Singh was shot dead outside a roadside tea shop in Sasaram. People are keeping a track of such incidents.

As far as prohibition is concerned, Nitish has won the heart of many Biharis by banning liquor inside the state. Contrary to editorials of magazines and newspapers, contrary to outrages on the social media, and contrary to debates on news channels, people, in general, are very happy with ban on liquor. The biggest beneficiaries are women, who are acknowledging decline in the domestic violence due to prohibition.  The ban has poorly impacted the “fast food” businesses inside the state, but it has certainly won goodwill for Nitish Kumar.

Perhaps one can claim that the sentiments towards demonetisation and prohibition are similar – there is inconvenience, there is negative impact on some businesses, and there are valid criticisms of the moves based on economic or democratic principles, but people are largely in support of these as they feel that the positive outcomes outweigh the negative ones.

The popular sentiment in Bihar is that the Mahagatabandhan Sarkar won’t last for long. Nitish, in his recent speeches, has not only praised demonetisation from multiple platforms, but he has also distanced himself from protest organized by his political friends like Mamta Banerjee and Arvind Kejriwal. People in Bihar anticipate political shift in 2017. The national equations will become very interesting if Nitish joins hands with BJP again.

Only time will tell which direction will the wind blow.

The corrupt are our friends : How hatred for Modi changed the discourse around corruption

Abhishek Banerjee
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The corrupt are our friends : How hatred for Modi changed the discourse around corruption

Growing up in India, it was not long before I became aware of the monster called “corruption”. We all talked about it, we all shook our heads about it… none of us could do anything about it.

The sinister term for the proceeds of corruption was “black money”. From street corner discussions to Bollywood movies, we all heard about how the monster of corruption chews up the common people in this country. In the belly of this monster lies the so called “black money”.

And we all understood that the corruption went right to the top. The peons at government offices were corrupt. The cashiers and accountants were corrupt. Their managers were corrupt. The IAS bureaucrats who ruled over them were corrupt. And the ministers those bureaucrats reported to were corrupt.

Not surprisingly, every common Indian carries within himself this seething, helpless anger against corruption and black money. And so it happened that when a band of “revolutionaries” arrived at Jantar Mantar in Delhi, early in the summer of 2011, this anger exploded. The language used at that time was fully laced with undertones of violence, showing the depth of our anger and frustration. “Final War against corruption” they would call it:

Arvind Kejriwal fasting against corruption
Can you see “Final War Against Corruption” written in the background?

Or they would call it the “Second Battle for Independence”.

Note the imagery conveyed by the words. Corruption was the ultimate monster and we have to begin “final war” against it. No sacrifice is too great in this battle. Because this is the second battle for independence. How can we as patriots not be ready to sacrifice everything we have? This is how corruption and black money was visualized:

India Against Corruption cartoons
The monster of corruption, wearing the cap of a politician. Soon that cap will be worn by anti-corruption activists.

How could we not fight back? Right?

We fought, and the UPA government, seen as massively corrupt, was thrown out. A new government under the leadership of Narendra Modi was formed.

A few months after taking charge, the new government revealed names of a few people having black money in foreign lands.

The liberal echo chamber erupted with laughter. Ha Ha Ha! After so much ado, this is all that Modi sarkar could do to catch the monster? You stupid bhakts… LOL!

And this laughter reappeared, every time the government tried to do something that was remotely related to fighting corruption or enabling the poor to get into the system that had kept them out for decades.

Ha ha ha! Most of those Jan Dhan accounts are totally empty. You stupid bhakts again.

Ha ha ha! The income disclosure scheme unearthed just Rs 65,000 crore. You silly bhakts. Can’t stop laughing.

And then at 8 pm on Nov 8, Modi fired a single shot. A single shot that was heard around the world. For black money holders, the world came to an abrupt end.

But then a miraculous thing happened. The intellectual echo chamber swiftly shifted the consensus view on what black money was:

Firstpost's apologetic headline on corruption
Honey I shrank the corruption monster

Oh look how wonderful! From a ravenous flesh hungry monster, corruption has suddenly become gentle as sheep. What’s wrong with those poor black sheep? They never hurt anybody, did they? Can’t we just live and let live?

Here is Firstpost again, telling us that Corruption is all a big yawn:

Firstpost whitewashes Manmohan Singh's crimes
Can’t we forget all those scams because he quoted John Maynard Keynes?

Yes. Why talk of scams? It’s all too boring and too old. It is not like corruption is a problem, is it?

Not just the media, our leaders were not far behind:

Raj Thackeray on demonetisation
From monster to sheep to mouse

See? Corruption is no man eating monster. Corruption is a teeny tiny mouse.

You know, now that I think about it, corruption is a cute little mouse like Jerry. We have all cheered for the lovable Jerry trying to give big bad Tom the slip. Why can’t we cheer for corruption as well?

It gets even better :

Akhilesh Yadav on black money
From a monster, it is now a mitra (friend).

Not only is corruption our cute cuddly house pet. How can we forget all the good things that corruption does for us? Black money is our ever faithful friend who stood with us in times of distress and now we want to turn our backs on it.

Coming as it is from the current heartthrob of Lutyens Delhi, I expect them to write children’s fables about  the friendship between India and black money. When the nation was on a knife edge of disaster, we were saved by our faithful friend : black money.

I even learned that we are demeaning our loyal friend through the use of the term “black money”.

Black money is racist
Corruption is being maligned, we need to fight for it, not fight against it.

And don’t you silly bhakts dare talk about sacrifices for the sake of nationalism now. The fight against corruption no longer needs sacrifices like leaving your job or joining marches and rallies day after day. Even standing in a queue is too much to ask for:

Rhetoric are no longer required
Only rhetorical terms like “Emergency” and “Fascism” need to be respected. “Patriotism” is a bhakt thing that must be taken literally and mocked.

So what happened to the imagery of “Final War against Corruption” and “Second Battle for Independence”?

All I see today is liberals mocking Narendra Modi and his “bhakts” for telling people to bear some pain for the sake of the nation. Why can’t we talk about patriotism now? NOW suddenly it is silly to talk about soldiers at the border? Who used to talk about the “Second Battle” and “Final War”? What happened? Why did that rhetoric change?

Friends, I assure you the day is not far when the echo chamber will sing paeans to black money. Instead of “Tom and Jerry”, there will be cartoons like “Modi and Black Money”, where big bad Modi chases around poor little black money. Bollywood will make movies about how the helpless poor were saved by the generosity of black money holders.

When we were growing up, we had to write essays in school about “People who help us”. This would include essays such as “Our friend the postman” and “Our friend the policeman”. Don’t be surprised if one of these days, your child comes back from school with a writing assignment on “Our friends the corrupt”.

Are less-cash economy and more people in banking system just ‘side effects’ of demonetisation?

Ashutosh Muglikar
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Are less-cash economy and more people in banking system just ‘side effects’ of demonetisation?

It is widely believed and acknowledged that the demonetisation programme was announced to curb black money (and thus curb corruption) and to curb counterfeit notes (that often form the shadow economy supporting insurgency and crime).

And we are seeing those effects too. While black money is getting unearthed, there are reports of insurgency too getting hit.

The side effects of demonetisation of course is the cash crunch, which is causing myriad of short term problems. Due to this cash crunch, a lot of people are moving towards using netbanking and mobile wallets i.e. people are being “pushed” towards a cashless economy, or better, “less cash” economy.

But is that just a side effect? An unintended outcome? Or the government actually wanted and planned this push?

First let’s focus on the cash that is impacted by demonetisation. This can broadly be divided into three parts:

  1. Black Money generated via tax evasion or via over/under invoicing by various entities.
  2. Black Money generated via illegal activities like drugs, counterfeit notes trafficking etc.
  3. Legitimate cash used by formal as well as informal economy.

Demonetisation seems to be addressing all three aforementioned aspects of money circulation in the following manner respectively:

  • Strategy 1: Income Disclosure Scheme (IDS), GST, Aadhar/PAN Based data collection, monitoring and compliance, rationalising provisions of withholding tax, capital gains, etc. Setting up of International Financial Services Centre (IFSC), Country by Country Reporting, Revision of DTAA agreements with Mauritius, Cyprus and Switzerland.
  • Strategy 2: Demonetisation has already made the old counterfeit notes invalid as they can’t be deposited or exchanged. The ill-gotten money is being recovered through income tax assessments/raids across the country. Some are destroying their ill-gotten money that helps RBI remove its liabilities.
  • Strategy 3: A move towards “Less Cash Economy” by encouraging adoption of mobile/net banking and other E-Payment options.

But are we sure that it was one of the central strategies?

Let’s look at some data which provides a very important background to the whole affair.

Firstly, online transactions and cashless transactions have been growing in India at a rapid pace; be it in common known modes of fund transfers like NEFT or the transactions via Point of Sale machines (the monitor that the cashier bangs at the payment counters in supermarkets), Debit Cards, Credit Cards and ATM machines:

  • The number of NEFT transactions saw a stunning 1412.07% rise from 8.28 crores in 2013-14 to 125.2 crores transactions in 2015-16
  • The number of RTGS transactions saw a huge rise of 1039.53% from 86.4 lakhs to about 9.8 crores transactions in 2015-16.
  • Number of ATM’s saw a rise of 25% from 1,70,473 units in 2014 to 2,15,039 unit in 2016.
  • Number of POS machines grew from 10,18,264 machines in August 2014 to 14,61,972 machines in August 2016. It should also be noted that all these machines except for 300 of Bank of India are online while the number of offline machines in 2014 stood at 7566. As per few news reports the demand post Demonitisation has shot up to 5000 machines daily for just 1 bank.
  • The number of transactions via credit cards rose by 66.54% from about 5.08 crores in 2014 to about 8.46 crores transactions.
  • The number of transactions via debit cards rose 32.42% from about 65.49 crores in 2014 to about 86.72 crores transactions.

All the data and more can be read in more detail by checking out this twitter thread.

In all, the total volume of transactions involving a bank saw a growth of about 1521.22% from 933.15 million transactions in year 2013-14 to 15,126.04 million so far in 2015-16.

If cashless transactions were already growing, why should the theory that demonetisation was brought in to purposely ensure more people move towards less-cash economy have any credence?

That’s where another set of data becomes critical: While the digital form of online transactions has been increasing, so has been the amount of cash with the public in the now defunct denominations. The total amount in these notes rose from about 1073800 crores in 2013-14 to 1417800 crores in 2014-15, or near about a staggering 50% increase in just two years.

So the cash in the economy was not going down, even though as pointed above, there has been a very substantial growth in the amount of digital non-cash dealings during that period.

A cash based economy is expensive. Currently it costs about 0.25% of India’s GDP. Excess cash in the market is not just difficult to track for taxation purposes, such a high amount of currency printing, bulk of which happened during the UPA period, might also have seriously depreciated the value of the currency and in the worst case led to hyperinflation.

A less-cash economy comes with its own advantages. Cost of transactions goes down, time and cost of accounting goes down, and of course, costs of printing currency  goes down. Compliance is better as there is better documentation. Better documentation and compliance plugs loopholes in public distribution system. And there is better tax monitoring, and better revenue collections.

Thus looking at the above points it will not be unwise to conclude that one of the reasons demonetisation was brought in was to ensure that more people took to banking, and that the cash in people’s hand, which rose so alarmingly, could be reduced.

It is not just a “side effect” but one of the main objectives. Though the objective is not easy to achieve.

One of the main reasons why people prefer cash over e-payments is that cash gives ease of use. If a big chunk of the legitimate cash is out of banking system as people still prefer to keep physical cash, it is something to ponder about. Cash brings parity and there is no case of “rejections”. With penetration of mobile telephony, POS, and bank accounts in both rural and urban areas as highlighted above, the difference of “Cash in hand” and “Cash at bank” will become narrower and this move shall keep a check on future generation of black money.

Some signs are already starting to show as total deposits and exchanges in the demonetisation period from 10th Nov to 18th Nov stood at Rs. 5,44,571 lakh crores while withdrawals stood at only 1,03,036 lakh crores. Even though this number may go up in the future as the restrictions are eased.

Getting masses into the banking system will need a major change in attitudes and spending patterns in our country where more than 90% of the transactions happen in cash.

Prime Minister’s Jan Dhan Yojana and its outreach was a part of this. Ministers also have been talking about cashless economy. Recently, the government announced special drive to bring more people into the banking system. And today, the Prime Minister in his Mann Ki Baat radio address, talked at length about moving towards cashless economy and how the youth should help older generations and poor people to adopt technologies that enables this transition.

However, getting people into the banking system is just the beginning; they will have to be sensitised and educated about digital transactions and convinced that it was easier and safer.

The transition from Demonetised India to Digital India will have to be a special project in itself.

Kejriwal reserves post of Dy CM of Punjab for a caste – what it tells about him

Dr. Shweta
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Kejriwal reserves post of Dy CM of Punjab for a caste – what it tells about him

On Friday evening, when one expects him to review a newly released movie, Delhi Chief Minister Arvind Kejriwal released an old movie – caste politics – remastered in honest colours.

The AAP supremo announced that the next Deputy Chief Minister of Punjab will be a Dalit, presumably if his party won the elections:



There are two Ds that are keys to his announcement – Deputy and Dalit.

The post of ‘Deputy’ CM (and even Deputy PM) has often been argued by many to be a clever workaround the provisions of the constitution of India, which doesn’t talk of any such post. However, it is not an uncommon practice in Indian Politics.

Primarily it is a descriptive and a ceremonial post. For all practical purposes, the Deputy CM/PM is deemed to be a cabinet minister and is also administered oath as such. He/she doesn’t enjoy any special powers accorded by the constitution.

The post of Deputy CM/PM broadly serves three major purposes:

  1. To massage the ego of a politician who couldn’t win the race to the PM/CM seat but thinks of himself as superior to the rest of the ministers. India saw a few Deputy PMs for this purpose. Funniest of them all was the case of Devi Lal, who deliberately misread the oath to call himself the ‘Deputy Prime Minister’, though he was expected to say only ‘Minister’ during the oath. Ah, the good old days!
  2. Deputy CM as the de facto CM is probably the invention of Kejriwal. Deputy CM of Delhi Mr. Sisodia, for all practices, is the acting CM of Delhi while Kejriwal keeps himself busy tweeting against Modi and doing other assorted shocking and entertaining activities.
  3. To monkey balance identity politics. For example, in Telangana, Chief Minister K Chandrasekhar Rao appointed two Deputy CMs – one a Muslim and another Dalit – the symbolism was too obvious not to note, even though KCR didn’t announce it the way Kejriwal has announced.

And that brings it to the other D – Dalit. Why Kejriwal had to go so desperate to announce a rather ceremonial post sans real powers to a particular caste group?

Obviously Kejriwal’s aim is to appease Dalits in Punjab into voting for AAP – you may say. It is realpolitik, a standard tactic employed by political parties, you may argue.

But. But. But! We are not talking about any other politician. We are talking about the Messiah of the Masses. The Yugpurush, whose sole purpose on earth is to cleanse the old rotten Indian politics of all its evils.

Here’s the Messiah himself applauding the earthlings of Delhi for rejecting the politics of Caste and Religion and giving him a landslide victory last year:


And here’s the Deputy Messiah putting the onus on the media to drive away caste politics:


So what changed?

Kejriwal changed?

No, not really, as you will see below.

According to 2011 census, Punjab has the largest share of Dalits in its population at 31.9%, which is large enough to swing election results. Compared to it, the percentage of Dalits in Delhi is much less. Also, Delhi government can accommodate a maximum of 7 ministers (Kejriwal + 6) and Sisodia was always going to be the Deputy and de facto CM considering Kejriwal’s greater ambitions.

For those readers with short memories, let me remind them that, in Delhi, Kejriwal did try to woo another set of voters in the name of caste.

Kejriwal called himself “baniya”:

Kejriwal's caste politics
Kejriwal had played caste card before he went all sanctimonious and thanked Delhi voters for rejecting politics of caste.

So he’s the same. The same d̶e̶v̶i̶o̶u̶s̶ smart politician as any other, who knows where and whom to appease. Just that he’s getting more and more brazen with time, because he knows that no one in the media or so-called intelligentsia will question him.

The torch bearer of clean and no caste-creed politics is now digging into it openly to win the elections at any cost. Someone who allegedly had no greed for power and money is now leaving no stone unturned to get more and more power.

All the while leaving his people in the capital facing the grave threats ranging from pollution and lack of civic amenities to everyday crime that they have to fight for themselves – never mind, last one can be blamed on Delhi police.

Aam Aadmi Party in Delhi won by a huge margin and almost everyone, irrespective of their political ideology, appreciated that the party at least seemed to stand for a new kind of politics. There was a glimmer of hope that Kejriwal might usher in new and cleaner politics. For some time, it even appeared that the party might actually work to fulfil their election promises including rooting out corruption. But with every passing day, he is making even the worst of the politicians in India look better in comparison.

Well, that probably is the higher purpose God had in mind when he sent this Messiah amongst us. That, by the time he is done with politics, he will make the rest of the politicians look better and people will stop feeling too bad about the state of politics in this country.

Amen!

Raghav Bahl, Bloomberg Quint, and the art of faux-economics

Gaurav
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Raghav Bahl, Bloomberg Quint, and the art of faux-economics

No, sorry. This is a misleading headline.

This article, written by Raghav Bahl, the founder of Bloomberg-Quint, “India’s premier multi-platform business and financial news company”, cannot be called even faux-economics. It is just pure mumbo-jumbo. Yup, Bahl, who had been thoroughly “demonetised” here, is back for another spanking.

This time, Bahl tries an interesting format, where he gives us what he calls us the ‘Official Spin’, which according to him is the popular narrative, and then proceeds to give ‘The Reality’. Except that the ‘Official spin’ is mostly a figment of his own imagination, and ‘The Reality’ is worse than all of Shirish Kunder’s jokes put together.

Let us deconstruct each one:

Bloomberg-Quint's 1st senseless infographic
Bahl has no idea about taxes, compliance, banking, or simply – common sense.

1. The ‘Official Spin’, as per Bahl, here is that the demonetisation scheme has snatched a windfall from the bad-guys, and would give the Government a hefty sum to spend on development.

Bahl counters this by using the most asinine logic available on the face of this earth. First, he criticises the scheme because he feels it has aided the crooks in converting their black money into ‘white’. Of course, he coolly forgets the costs attached here: A minimum of 30% of Income Tax, the chances of a penalty ranging from 50% to 200% of the tax, reported amended taxes which could be in the range of 50-60% (funnily, reported on Bloomberg-Quint itself; maybe Raghav Bahl doesn’t read his own website?), Indirect taxes such as VAT or Service Tax catching up, and of course, the lack of any sort of immunity allowing the Income Tax Department to dig up all your past records.

Yup, in Bahl’s mind, this demonetisation is just one easy black-to-white window of opportunity with no consequences.

This blinkered viewpoint is not a mistake though, because in the 2nd part of his ‘The Reality’, he claims that the Government would not get any money for development schemes since all the money deposited, could easily be withdrawn from banks! It’s difficult to comprehend where to start regarding this:

A. Mr. Bahl, the Government was never supposed to use the money deposited in banks for development. Governments can’t do that! The money in the banks is that of the depositors, which the banks can ONLY lend to borrowers, not donate to the Government of the day. Imagine a private bank like HDFC Bank giving away public deposits to the Government. Mr. Bahl, do you have the faintest idea of how the banking system works all around the world? You put forward a stupendously stupid idea, imagine that it is government’s plan, and then go ahead and counter that.

B. The money, which the Government is touted to receive, is the tax component on the deposits of black money. Yes, the same tax which you conveniently forgot about in the first limb of your argument. Tax on income = Government’s money, and Income deposited in banks = Public money. Hope that’s clear!

Now let’s move to the 2nd point Mr. Bahl makes:

Bloomberg-Quint's 2nd senseless infographic
Bahl doing what he’s accusing the government of doing – selectively interpreting data

2. Here, Bahl says, the ‘Official Spin’ is that the public has given a thumbs up to the move via the positive results for BJP in the latest bye-elections.

Bahl’s ‘The Reality’ is that BJP’s margin in Shardol Lok Sabha shrunk, in Lakhimpur Congress gained 8% vote share (although BJP won), and in West Bengal assembly bye-elections BJP lost. This is enough to prove that the public did not support demonetisation.

Firstly, it was the media that made the bye-elections a referendum on the demonetisation, and then conveniently back-tracked post results:


Secondly, Bahl has viewed the results from a myopic angle, so as to get data which suits his final argument. The BJP won in Shardol and Lakhimpur, it also increased its margin in Nepanagar (which Bahl skipped). In Arunachal, BJP wrested the Hayuliang seat from Congress (which Bahl skipped). BJP also won in Assam and in Tripura, its vote-share surged to 20% in the red bastion, relegating Congress to a distant third. In Bengal too, BJP’s vote share has increased. Overall, BJP has increased its tally from 3 to 5 while the Congress is down from 4 to 1.

Bye-elections are often influenced by local factors and incumbent governments, but if Bahl wants to make them into a referendum for demonetisation, then the verdict is clear.

Finally, the last point:

Bloomberg-Quint's 3rd senseless infographic
Not just faux-economics, Bahl flashes his faux-statistics too.

3. The ‘Official Spin’ here is the narrative that public are overwhelmingly in support of the scheme, based on various surveys and polls.

Here, Bahl’s spin is basically trashing Huffington Post-C Voter’s survey and also that on the PM’s app. And the trashing itself is juvenile:

Was it conducted on the phone? On the internet? In one-on-one field interviews? How large was the sample? On which dates was the poll conducted? Right after November 8, or on November 20? How was the question framed?

What Bahl wants to ignore is just the results, which show an overwhelming majority of people in support of the scheme. These results are not just shown in the C-Voter poll or the Narendra Modi App poll, but also on most polls conducted online.

And if Bahl wants to trash surveys, then why he didn’t trash this poll posted on Bloomberg-Quint which was only conducted online, that too among just 601 people? Or this poll on Bloomberg-Quint which had a sample size of just 1002 (lower than the C-Voter sample)?

The point is such flimsy, shallow remarks can be made about any opinion poll or survey, just because you don’t like them. Of course, if Bahl had spoken out about unscientific polls like this one on demonetisation on Times Of India, which allows multiple votes per person, thus leaving it vulnerable even to a code, then it would a fair criticism.

In the end, going by Bahl’s earlier lousy post, and this even lousier post, which claims to profess economics on a business news portal, is basically a joke on the concept of business journalism or rather any kind of journalism in India.

Nonetheless, we finally know from where Rajdeep Sardesai got his smarts (for the uninitiated, Raghav Bahl was also the founder of Network18, where Rajdeep worked for most of his TV journalism career).

Try harder next time Mr Bahl. Until then, Ciao.

UPI – all you need to know; how to set up and transact (step-wise guide with pics)

Aditya (reviewero)
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UPI – all you need to know; how to set up and transact (step-wise guide with pics)

Everyone is talking of UPI payments and how it changes everything in the world of digital payments. It is being touted as the major driver that will take us to being a cashless economy, along with mobile wallets.

For most of us it remains that elusive genie that will make all our payment wishes come true IF ONLY we knew how to rub the lamp the right way. Welcome to OpIndia’s simple no BS guide to UPI, where we tell you how to get started with UPI in under 10 minutes.

Let’s go!

So what is UPI?

UPI is short for Unified Payment Interface. It’s the netbanking transfer for the mobile first generation. Quick to setup, quick to transfer money to another account. No bank account number needed, no logging in, no waiting, and no IFSC code. All you need to know is a username (called VPA or Virtual Private Address) to send money to anyone within seconds.

Why was UPI needed?

Netbanking wasn’t as efficient and quick. Netbanking was made for the internet; to make it secure, the extra steps required made the whole process of transferring money cumbersome, even with IMPS. A Mobile first solution like UPI takes away a lot of friction as we will see. It’s available 24×7, including on holidays.

Say, you need to buy from your local shop or local supermarket. You don’t want to take note of their bank details, add and confirm them as beneficiary, and then log into your netbanking or mobile banking app each time you buy something, where you would need to wait for OTP and provide information like those grid numbers on the back of your debit card. That’s just too much of work when all you have bought is a box of chips and some cold drinks!

How it’s different from mobile wallets?

Mobile wallets are apps that hold your money. With a Wallet you add money from your bank account using net banking or bank cards. The UPI app transfers money from one bank account directly into other just like netbanking IMPS transfer, there is no need for 3rd part apps to hold the money anymore.

So will UPI kill mobile wallets?

Wallets provide an added layer of security and also have a lot of 3rd party integrations that make it easier to pay your bills and make payments at stores or cab services. For example, you can add money to PayTM wallet and use it to pay bills, recharge phone, shop their own marketplace or other online merchants and pay for your Uber rides. UPI apps and ecosystem will take some time to get there, but once it does the charm of wallet apps will certainly go down.

Mobile wallets won’t just vanish, and they will need to innovate and make them more attractive than UPI payments, which currently they are due to ease of payments and lots of offers that they have. Most probably wallets will add UPI as one of the options for payment and not rival them.

What can I do with UPI now?

For now, you can use UPI to pay for everything you have been using netbanking transfers for. You’ll need the receiver’s VPA, and if they don’t have it, you’ll have to ask them to install a UPI app first.

(Update: UPI transfers can take place even on feature phones where no VPA or UPI app will be needed – as is explained here – but the scope of this article is about currently available apps on smartphones)

But since it’s so easy and useful and removes the need for wallet apps for certain transactions, you will soon see everyone using it for things like paying for cabs, paying at the local store, or splitting their expenses.

How much we can do with it will depend on how fast we can all move to UPI payments. For now, play with it and tell your friends about this new cool way to split your weekend bills.

Can I start using UPI immediately?

If you have a bank account, and if you have enabled netbanking and mobile banking i.e. if you have generated an MPIN (usually 4 to 6 digit long depending on the bank) for your account, you are ready to use UPI. Remember that your phone number, where you are going to install this app, must be linked to at least one such bank account.

How do I get this UPI app?

There are about 28 different apps on Google Play (Android apps store) alone. You can search for “Your_Bankname UPI” (e.g. ICICI UPI) to find a UPI app by your bank. Remember that you should be downloading the official app of your bank.

(Update: Unfortunately, not many official apps are available for iOS yet. TrupayIndia app can be used to receive money so far. So Apple users will have to wait till banks come out with iOS versions)

But the beauty of UPI is that you don’t need to use your own bank’s apps if they have not yet come up with one. You can use any of those official and trusted apps that show up when you search for UPI apps.

In this post we will focus on UPI app by Flipkart called PhonePe, which is in partnership with Yes Bank, and Axis Bank’s UPI Pay app, which I think are the easiest to use so far of all apps (Pockets by ICICI comes a close third but is super feature rich, so try that too).

Once you download a UPI app, it will ask you to verify your phone number by sending and receiving SMS. In the next step you provide basic details like name, email, and set a 4 digit Pin.

How do I transact with UPI?

Step 1: Download and install a UPI app

Pick any of the apps when you search for UPI apps in app stores. I recommend PhonePe app, Axis Pay UPI app, or Pockets by ICICI.

This article will guide you with PhonePe app, but other apps will have mostly similar steps for registration and transaction.

Various UPI apps in Google Play

Step 2: Launch app and register yourself

First verify your number. UPI system populates your bank account details and authenticates using phone number linked with your bank account. So install on phone with the number linked to your bank account only.

Your mobile number is linked with the UPI app

After number is verified, provide some basic details like Name and Email, and set a 4 digit password (Pin). If you ever forget your Pin, which you need for logging into the UPI app every time you use it, you’ll need access to your email to recover it.

Create your UPI account

Step 3: Add a virtual password address aka UPI Username

Just like your email, your UPI virtual password address (VPA) is your UPI ID which others will use to send you money. It’s of the form myupi@ybl or yurupi@icici (no .com needed). You can create up to 3 VPAs on PhonePe app and cannot delete them later yet, so be careful with your selection.

Swipe left to right to bring up the menu and press your number to go to your profile.

UPI profile on Phonepe app

Find “Add VPA” option and add a VPA. Pick something easy to remember and spell out. Doesn’t have to be your name. For example, I could create one as myupi@ybl

VPA is not case sensitive so MyUPI@ybl is same as myupi@ybl

Add VPA to your UPI app

Step 4: Add a bank account

It’s easy. Swipe left to right. Go to Bank Accounts menu and press Add Bank Account button. Then select your bank. Your bank account linked with your phone number will be added without you needing to enter anything such as account number. You can add more than one account if you have multiple bank accounts linked to the same number.

It will also show you if an MPIN exists for that bank account. If not, you can create one by going to your banking app or website (some apps allow you to generate that without leaving the UPI app. You may need to enter your Debit Card details). If you have forgotten your bank MPIN, you can reset it from within the app:

Add your bank account to the UPI app

And that’s it, with your bank account linked and VPA created, you are set to send and receive payments now. Let’s do a quick transaction.

Your first transaction

Step 1: Go to app home and click Send

UPI app home screen

Step 2: Go to VPAs and click Add VPA Contact

If you don’t have any one whose VPA you know, you can try sending Re 1 testupi@sbi – a working VPA we have created for testing purpose. You can also download other UPI apps like Pockets by ICICI and Axis Pay, create new VPAs, and send yourself money from other apps.

After you enter a VPA, you have to click verify button and it will verify if VPA is valid and also show registered name of the recipient (not shown in picture below for privacy reasons).

Add a VPA contact

Step 3: Enter amount you’d like to send

When it asks you if you’d like to send money now, accept ‘Yes’ and move to the ‘send’ screen. Type the amount you want to send and from which linked bank account. As you can see from the screen you can even choose to send Re 1.

Enter amount that you have to send

You will be taken to a screen by NPCI (National Payments Corporation of India) within the UPI app, where you will need to enter MPIN of the bank account linked to that VPA.

And done!

Confirmation of the UPI payment

All this takes less than a minute.

Receiving money is even easier (it always is!). Remember that the money will come to the bank account that is associated as the default account with your VPA (that you provide someone for receiving the money).

Lots of UPI apps will let you pay bills and split bills with friends too. Some apps also have a QR code scan where you can send or accept money just by showing someone your QR code or scanning their QR code without having to enter VPAs.

Following is the a test QR code we created that is associated with testupi@sbi VPA. You can try transferring Re 1 by scanning it (we tested it on PhonePe app and it worked):

QR code for testing UPI payments

So in future, your local store could ask you to just scan their QR code to pay them directly from your bank account to theirs without any worries of looking for cash.

Remember that with UPI, currently your transaction value must be within 1 lakh rupees within India. For higher amount, you will have to use netbanking or traditional banking.

So try out these apps and let us know which ones you find easier to use. Still got questions? Ask away in the comments section below.

Media reports claim that 70% trucks are off roads in India, really?

Guest Author
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Media reports claim that 70% trucks are off roads in India, really?

A couple of days ago, I came across a tweet from Business Standard that somebody I follow had retweeted. The tweet mentioned that about 70% of all trucks in India were off roads due to demonetisation. I was shocked, and so should be every citizen, because 70% is a huge number and trucks form the backbone of our supply chain.

Soon this news, based on claim by one transport union guy, was all over the media, reported as fact in the headlines:

70% trucks
Same report repeated across media platforms

Reading this, I was especially shocked as I wondered if I was completely away from the reality of the sector I work in! I run a warehousing company in Hyderabad and am also the founder of Boxoffice Logistics – an online trucking solution in the B2B segment.

I operate out of a place called Kompally, a suburb of Hyderabad city along the Nagpur National Highway. Kompally and nearby areas literally hold 75-80 % of total warehousing space of Hyderabad. These warehouses handle both primary and secondary warehousing needs of Hyderabad and Telangana area in general.

On 8th November, when Prime Minister Narendra Modi announced that there would be demonetisation of 500 and 1000 rupee notes, like everybody we too faced difficulty for first couple of days. And it was more out of confusion than anything else. Things have returned to normal for most of us.

Transportation industry works for upcountry (long distance) and intra-city logistics. Most of industry these days is fragmented and small in fleet size. Trucks are stationed in “transport addas” waiting for business and nearby requirements. Most cities have these addas on all the outskirts serving particular local requirements. Although there is no fixed number to claim what percentage of this business is done in cash and cheque, we believe that they are roughly split 50-50. Primarily, the organised transport companies take cheques and Letters of Credit (LCs) and unorganised truckers prefer cash (a part taken in advance for fuel needs and toll charges, and rest on delivery).

trucks standing
A typical transport adda in the outskirts of Hyderabad.
Transport adda at Kompally in Hyderabad
Another view of an adda. If 70% of trucks were off road, most of them should have been standing here.

Now I should have seen a huge pile of trucks building up at these addas if 70% were to be off the roads as the news reports claimed. But no, there was no unusual overcrowding. The above two pictures were taken by me in the last two days after I read the news reports. So what was the truth? I wondered.

You don’t need to be in the business like me to realise that 70% of trucks being off road would have created a catastrophe and curfew like situation, with basic essentials like food and medicines prices shooting through the roof and people hitting the roads in rage. While some on the social media might wish to see such catastrophe to declare demonetisation a failure, we didn’t see those. And it’s been two days now since the report was carried by many in the media.

In the last two days, while praying that no catastrophe strikes if the news reports were true, I have been talking to people in the industry to find the truth. And this article is to share the information that I could find out – a step that some journalist should have taken up before publishing the staggering figure of 70%.

First I spoke to all my warehouse heads who also take care of transportation handling and requirements. None of them saw any disruption in their day to day vehicle requirements or difficulty in procuring vehicles. These companies operate both upcountry as well as intra-city logistics like retail store fulfilment and direct customer delivery.

I also spoke to Mr. A Sagar, Director or M/s Sagar Asia pvt ltd., a leading name in Aluminium ladders that specialises in industrial as well as domestic use ladders. The company procures at least 15 vehicles for long haul and many more for local delivery in a week.

“We faced issue for the first two days. Since then, it has got back to normal now. We are facing some issues with transporters who used to work on COD (cash on delivery) basis, but we are trying to issue them cheques or holding their credit till liquidity is back with us,” he said.

I also spoke to Mr. Satyanarayana, who runs a transport company locally to gauge the situation from transporter’s point of view. He operates about 60-65 trucks (25 owned and rest on contract) of both upcountry and intra-city logistics for leading e-commerce and brick and mortar retail companies.

Satyanarayana conveyed the same thing. “The business is slightly down for people who operate in cash (most of them in intra-city logistics), but overall situation is more or less back to normal,” he said. He revealed that many transporters were now operating in cheques or small payments are taken in E-wallets.

He further said that most truckers have started to use fuel cards and debit cards and carry small change for toll charges (while no toll charges are being collected on national highways, some state highways still charge) for upcountry needs. Satyanarayana added that he was happy with the demonetisation move as it will help the country in the long run.

Digging even deeper, I got in Touch with Mr. Eashwar Rao, General Secretary of Andhra Pradesh Lorry Owners Association based out of Vijayawada, one of the biggest transport hubs in the country.

He says, “Our business has a mix of organised transporters and unorganised ones. There has been no impact on the organised transporters, but about 30% of unorganised transporters who operate on cash on delivery basis have suffered. Most affected are the reverse trips businesses, where cash is paid normally.”

He said that his association was in the process of educating all the Transporters about going cashless and training drivers to operate debit cards and fuel cards.

Mr. Rao had a suggestion to PM Modi and Mr. Dharmendra Pradhan, Minister for Petroleum. “Currently we are forced to carry three different PSU oil company fuel cards and are spending our working capital in all three different cards. We would suggest that all the PSUs should come together and release one common card for fuel usage. It would help us in a big way.”

Probing further, he says, “We expect this situation to continue till January and we feel it is good for everyone in the long run. Yes, there are people impacted, but news of 70% of total trucks going off roads in all is false. Ground situation is far removed from such a number.”

I have a business to run and taking time out to talk to these people was a little bit of bother. Even these people are busy with their day to day operations, but they took time out for me to discuss this. Ideally this should have been done by a journalist, whose job is to talk to people and cross verify a claim.

But why work hard when you can just copy paste someone’s claims? It is indeed sad that we citizens have to do media’s job of fact-checking and cross verification. But I feel good about it, and I hope my findings are shared too, and the misinformation spread by the media is countered.

(Written by Sundeep Reddy. He is the founder of Boxoffice Logistics and Zeromile Warehousing. He can be reached on twitter @sundeepgummadi)

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