On Demonitisation

Modi sarkar demonitised Rs. 500 and Rs. 1000 denominations on 8th November, 2016. It was stated that such step will address three factors: Curtail terrorist funding, unearth undisclosed cash and flush out counterfeit notes. 

I am very doubtful about the success of the first objective. For the second, one would have to wait and watch. And for third there is no doubt that it would be dealt with pretty well. 

The reason why I remain doubtful about meeting the first objective is because terrorists will find ways to exchange their notes. Moreover, they will in few months time begin to accumulate money once more.  If Govt. has to curtail funds to the terrorists, it has to go to the root cause of the problem. And to do that govt. would have to win over the heart and mind of the people who are funding the terrorist. Okay, this cannot be applied to Pakistan. But this can be applied to the supporters of the Naxalites and those in the North East. 

The fact that there are more frequent attacks occurring in Jammu and Kashmir demonstrates that demonitisation does not even have an iota of effect in curbing insurgency. 

For the second point, one would have to wait and see how much money will come back to the Reserve Bank of India. And how much of undisclosed money has been detected. The cost of this exercise has been massive ( 1.25 trillion rupees, says news report), and if the amount of undisclosed money is very small, then the whole exercise would be in vain. So let us wait for the final figure to arrive. 

Regarding counterfeits notes, there is no doubt banks would be able to flush out quite effectively. But this process can be efficiently done without having to demonitise all the big notes at one go. 

The main criticism against the whole process of demonitisation is with regard to the unpreparedness of the concerned authority. The massive cash shortage has hurt the economy. Though it cannot be quantified now, there is no doubt that the blow to the economy will be massive. Had the concerned authority taken adequate steps by way of having got more notes ready or kept the size of Rs. 2000 similar to that of Rs. 1000 so that fitting it into the ATM will be quite easy, the damage would not have been this bad. 

Overall, I would say let's wait and see whether there is net gain or loss. This will show whether demonitisation has been a useful measure or not. This is the first point. The second point is with regard to the prepareness of the concerned authority. And in this regard, my view is that there is no preparation. The way this has been carried out is a disaster. 

A Beautiful Duet

David Phelps and his daughter Maggie Phelps

Rawl's Primary Goods

Rawls writes about primary goods in section 11, titled 'two principles of justice' in book A Theory of Justice (Harvard University Press, 1971). He says that primary goods are '"things that every rational man is presumed to want" ( p. 62). He classifies primary goods into two categories: Social Primary Goods and Natural Primary Goods. 

Social Primary Goods include rights and liberties, powers and opportunities, income and wealth ( and self-respect) whereas Natural Primary Goods include health and vigor, intelligence and imagination ( p. 62). 

Whatever kinds of plan of life that a person has, these goods normally are useful for the person to achieve his or her end. 

Samples of APA Style

In APA style, for "location" the names of the city and the state are to be used. For example, if the book is published in New York, it is to be cited at " New York, NY". The name of the state is to be in shortened form. But  states outside of the US do not always have shortened form. These are the samples on how to fill the "location" for books published outside of the US.

" London, England: Taylor & Francis." You can find it here.

And another sample: " Paris, France: Presses Universitaires de France". Link is here.  

Was it Justifiable For Mother Teresa to Accept Money From Shady People?

Just few days back two prominent figures were extremely harsh on Mother Teresa. I did not expect such adjectives from Justice Katju and Arindam Chaudhari. Part of the problem, I think, is that they did not try to understand things from the other side. She was accused of accepting donations from people of shady characters, and also that her use of money was not transparent. When I try to put myself in her shoes, this is way I see things.

Take a government employee whose office hour is 9am - 5pm. This person is wasting his time shouting at the clients, gossiping, loitering, sleeping, arriving late, leaving early and doing things he should not be doing during office hour. But at the end of the month, he gets full salary. When he goes to the shop to purchase potato and hands over the Rs. 100 note, he does not say this 90% is from my hardwork and 10% is for arriving late, leaving early and all the useless thing I do but should not be paid for. The rich businessman does not say this 85% is through fair earning, and 15% is through making the 100 employees work additional one hour each week for which I am getting the money. I believe our politicians' earning would be mostly contaminated money!

If a politician had donated to a Temple or a Gurudwara saying this money on my right hand is from bribery and cheating and the money on my left hand is through honest earning, it would be unreasonable not to reject the money given by the right hand. But the politicians do not come like that, and they donate contaminated money, and how could the priest separate which percentage is pure and which is impure.

Mother Teresa had the hungry and the diseased to feed. It is the government and God who must examine how the donors earned the money. Investigating what percentage is white money and what percentage is black money is not her job. If she would not accept any contaminated money, she would have to close down her institution. Because there is no one whose entire earning is entirely pure. Our efforts and earnings are contaminated by greed, anger, jealousy, malice etc. though there is love, grace, compassion, friendship etc.

But even if it was justifiable for her to accept donations from people of shady character, she must be honest in the use of the money. And as a registered NGO, her institution must be accountable to the government. There was no RTI ( Right To Information) during her time, and her critics would have no way of getting the audited statement if she had refused to share. But she had no reason to show the audited statement to any of her critics. She was not accountable to her critics. If she was unfaithful, it was for the government to take action on the institution. Let the government bring forth accusation if there were financial irregularities. 

Her critics accusing her of refusing to share the financial detail is not a reasonable charge nor is it reasonable to criticise her specially using very strong adjective for accepting donation from people who had gone to jail or involved in cheating and so on. 

SHG as Loan Shark?

In the absence of a robust formal financial institution, the non-formal money lenders that charge around 5% – 20% per month are filling the vacuum to meet the need of those struck by unwanted circumstances causing tremendous hardship to those already burdened. Sometimes, these lenders could even be a Self Help Group.

Loan shark refers to a money lender who charges extremely high interest rate. Observing the current interest rate that money lenders charge in different places in the North East, it seems appropriate to use such a term.

In almost all districts of Arunachal Pradesh, either Self Help Groups or private lenders would give loan at 10% per month or rather 120% per annum. In fact not only in Arunachal Pradesh, the same practice is found in Mon district of Nagaland, Sonitpur district of Assam and in other parts of North East India. In Senapati district of Manipur it is comparatively lesser i.e. 5% per month or 60% per annum.

Since the government has not criminalised such practice, loan sharks consider it morally okay to charge such extremely high interest rate. The demand by those who are in dire needs of money possibly because of illness in the family or for children’s education or similar pressing reason made the loan sharks justify that they are coming in only to fill the gap.

Filling the gap is required, but the problem arises when it turns exploitative. If it is to fill the gap and to meet the demand of the needy, and not to exploit the needy, the interest rate should be much lower. Interest rate that is higher than 2.5% per month or 30% per annum cannot be justified because a high interest rate imposes back breaking burden on the needy. Such high interest rate deprives a needy family the chance to recover from economic instability within a reasonable time span. Taking loan on high interest rate breaks the economic backbone of those who are already crippled by circumstances.

“Human wants are unlimited”, says our school textbook. It is natural to want to get richer and richer. To work harder to improve one’s economic condition is not bad in itself. But when the desire to get richer is actualised through exploitation or taking advantage of someone’s helpless condition, it turns into greed – a negative quality that is responsible for so much of world’s problem throughout human history.

Charging 10% or even 5% per month for loan given to a needy is an expression of greed and selfishness. Whether it is an individual or a group of individuals that give loan at such rate must cease. Even if the legal system does not criminalise loan sharks, the larger social and political community needs to maintain a moral norm to set the prevailing condition right. And this moral consciousness has to emerge from within a small community to become part of the public consciousness.

To address this pressing social exploitation, government also must work towards widespread establishment of formal financial institutions. Compared to the interest rate charged by the current money lenders, banks charge far less interest rate. Whether it is private banks or otherwise, the interest rate may be kept not more than 18% per annum, though there are different rates for different reasons for borrowing money. Micro-finance companies may charge around 28% per annum, at the most.

Thus the gap between the formally established financial institutions and the private run lending system is too wide. Given the tremendous hardship borrowing money by needy families from private lenders elicits, charging of high interest rate must be addressed by the concerned authority as well.

(Apilang Apum is a PhD Candidate, Economics Dept, Rajiv Gandhi University and while Jeremiah Veino Duomai is a PhD Candidatem Philosophy Dept., Delhi University)

Link: http://www.arunachaltimes.in/self-help-group-as-loan-sharks/