Since the evening of November 8, when Prime Minister Narendra Modi announced his big decision, every politician in the state is obsessed with only one issue -- demonetisation.
There is mixed opinion among people over the Centre’s decision to demonetise Rs500 and Rs1,000 notes. It will now be a major issue as people in the state vote for local government bodies — municipalities in the cities and district councils in rural areas — over the next six months. It will dominate the poll campaign in the state.
All political parties, including the ruling Bharatiya Janata Party (BJP), are now busy changing their strategies by taking into account the impact of unexpected move of the Centre. The demonetisation has changed a lot of things on ground. The major impact will be the use of money in the elections. Probably for the first time since erstwhile chief election commissioner TN Seshan put restrictions on poll campaign and made it mandatory for candidates to submit daily accounts of expenses, the elections will see much less use of money. The BJP will try to use it to its advantage by marketing the move as a significant step in nation-building. On the other hand, the Opposition is getting its ammunition ready to target the BJP over the inconvenience caused by the decision. For the first time since 2014 Lok Sabha elections when he came to power with a landslide victory, the Opposition parties have got something to criticise Prime Minister Narendra Modi and they would not let the opportunity go. The BJP camp is wary of the reaction among the people, but its leaders are also saying that there is more action in the offing which could make the people happy. “Wait till December 30. Things will become dramatically difficult for the Opposition,” smiled a key BJP leader in the state. There could be a crackdown on tax defaulters with some known names finding themselves in trouble. A former chief minister is already in the dock with enforcement directorate probing financial transactions of a prominent real estate developer, he pointed out.
Significantly, the impact of demonetisation is felt differently in urban and rural areas and will reflect accordingly in the poll campaign.
In cities, it caused limited inconvenience for a chunk of population that uses plastic money. It affected lower strata of the society more as poor people entirely depend on cash for their daily transactions.
In rural areas, things are different, especially for farmers.
The Central government has decided not to allow the district central cooperative (DCC) banks to accept old currency or exchange it.
“From a technical viewpoint, it would prevent attempt of rich farmers to turn their unaccounted (black) money into white, as they would deposit the same in the banks. Agricultural income is tax-free, so they can claim the amount is saving for the past few years. However, the overall number of such people would be much low,” said a key leader in state’s cooperative sector. “It is a fact that there are corrupt people in cooperative banking sector, but then we have seen how hundreds of crores of rupees worth of scam took place in nationalized banks too. Why single out coop banks,” he asked.
Because of the restrictions on 31 DCC banks in Maharashtra, the network of rural cooperative banks and credit societies under them is badly affected. Their transactions have come to a standstill. Across Maharashtra, especially in the western, northern and central parts of the state, the cooperative banking has a strong network. Farmers depend on them for farm loans. A large number of farmers have their accounts only in local cooperative bank or credit society and not any nationalized bank. This is likely to have an impact on agricultural activities. This is why even Maharashtra government has been repeatedly urging the Centre to relax the restrictions on the DCC banks. The state BJP doesn’t want Opposition parties to damage it in rural areas in the run-up to zilla parishad polls.
It is not clear whether the effect of demonetisation will remain for a few weeks or few months, but politically it will continue for at least next six months till the mini-assembly elections in Maharashtra are over.