Congress president Rahul Gandhi has come up with another conspiracy theory on demonetization. In this theory, he has suggested that demonetization was a step to help US based e-commerce company Amazon. “Demonetization wasn’t accidental. It was an intentional attack to finish you off and clear the path for the biggest businesses like Amazon,” said Rahul Gandhi. In a press conference on demonetization at Congress headquarters, he attacked PM Modi and demonetization with his limited understanding of economics and some false facts. He repeatedly accused government of ‘crony capitalism’ and said that government’s move was aimed to help few industrialist friends. He said “His (the Prime Minister’s) biggest 15-20 crony capitalists had taken bank loans and had non-performing assets. PM Modi took the people’s money and gave it to the country’s biggest crony capitalists. That was the purpose of demonetization.”
The Amazon story falls flat because Rahul Gandhi did not put any evidence to prove his claim. The entry of Amazon or other e-commerce companies helped the retailers to get pan-India platform to sell their products. Perhaps Mr. Gandhi is not aware of the fact that Amazon India is third party platform and it sells products of other companies. Demonetization has achieved its objective to crackdown on black money and formalization and digitalization of economy. The ratio of central government’s taxes to GDP was 10 percent in the fiscal year 2014-15. Now, if we take a look at central government’s taxes to GDP ratio has gone up from 10 percent to 11.6 percent. This is a whopping 15 percent increase in tax to GDP ratio. According to Economic Survey 2018, 10.1 million people filed income tax returns in the year following demonetization (November 2016- November 2017), while the average for the last six years has been 6.2 million. This shows an increase of over 1.5 times the previous number of income tax returns filed. So, the point is crackdown on black money has been successful because tax collection increased dramatically. The simplest definition of black money is ‘an income on which taxes are not paid’, so if people paid taxes or started paying taxes after demonetization that simply means it achieved the primary goal.
On the crony capitalism part, this is an open secret that backroom dealings were hallmark of UPA government. The number of scams under the regime is shameful by any standards. Modi government is trying to establish a rule based capitalist system where every industrial house gets equal opportunity. Recently Airtel Sunil Mittal said “today, when people say he is less friendly to business, I think what they are trying to say is that he is less friendly to the businessman and to that extent I think he is doing the right thing. He is trying to grow the economy, grows markets, put rules and regulations. In fact, a rule-based economy is much better than a discretionary kind of economy.” Airtel loss its market share due to predatory pricing by Jio but its chairman is praising government for establishing rule-based economy is perhaps good answer to Rahul Gandhi’s crony capitalism accusation.
Another accusation by Rahul Gandhi was that “during demonetization, PM Modi’s friends turned black money to white. Example is Gujarat Cooperative Bank which has Amit Shah as director where Rs 700 crore was converted. This can’t even be called a jumla, it can only be called a scam.” Rightlog has published a detailed article busting this lie of Rahul Gandhi. So, almost every accusation by Rahul Gandhi falls flat on facts and evidence. He should educate himself to better level to find better excuses to slam the government.