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Modi killing Indian Economy by Quackery

This entry is part 1 of 15 in the series Demonetization

Money circulation for a market economy is like blood circulation for the human body. Money mediates the exchange of commodities – goods, services and labour just as blood mediates the transfer of energy (food) and oxygen to various parts of body.

Is there corruption in Indian economy? Is there black money? Is there terror funding?

Yes to all. These are diseases like leukemia which is also called blood cancer. Leukemia crowds out normal blood-making cells in the bone marrow, leading to low white blood cell count for the affected patient.

Then how to get rid of them?

For a patient with leukemia, a good doctor will provide blood transfusion as an emergency measure to boost up the white blood cells count. But this is only a temporary measure of treating the effect of bone marrow cancer.

Quack Doctor

Instead a quack doctor decides to suck out 4.5 litres of blood and leave only 0.5 litre in the body and says that the blood will be replaced in the next 5 weeks gradually. He claims that by this treatment the blood will be cured of cancer. His logic – ‘it is called blood cancer, so it has to be treated this way’

bad doctor

What will happen?

The patient will go into coma, paralysis and in worst case may even die. But the bone marrow cancer will continue unchecked.

That is what is happening to Indian economy now. Currency notes worth about 86% of total were declared illegal without any immediate replacement. The economy is jammed, economic life runs with great difficulties.

There are only two ways out.

An emergency infusion of new currency notes to match the old value (at least minus the estimated black money amount) or rollback of the demonetisation effort. Either way, the black money will find its way back into the economy (as does the bone marrow cancer afflicted white blood cells)

Then how to cure black economy?

Attack the bone marrow cancer with radiation therapy or chemotherapy drugs.

That is, attack agents and operators in real estate, gold trading, share market, foreign Investment and political funding. Confiscate their assets, ask them to work for a wage in a factory or construction site like the majority of Indian population.

Tough? Not like it?

Yes, but the disease is endemic to a profit driven system based on and appealing to the basest of human nature – selfishness, greed, and trying to get away with as much as possible.

There is no easy treatment to this disease like passing the pain to innocent common people, strangling their economic life as Modi has done. We need to fix the root of the problem.

Series NavigationStatement on DeMonetisation by leading economists, intellectuals >>

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