Cash money is not black money. It is honest trade.

Enough articles have been written on demonetisation, which is the sudden delegitimization of Rs 500 and Rs 1000 notes, in India and pundits have predicted that it will be a good change for the economy, after a short period of slowdown. Countries have practised demonetisation in the past in response to hyperinflation, as Zimbabwe did last year, but no one has tried it when the economy was growing in excess of 7%, retail inflation was 4.2% and the currency was stable, as in India. So why did Modi plunge the country into chaos? After all he has spent virtually his entire life in the Rashtriya Swayamsevak Sangh, usually known as the RSS, which is the Hindu arm of the Modi's Bharatiya Janata Party. He must have known that his sudden action will cause enormous inconvenience to the people of India, so why did he do it? Raghavan Jagannathan thinks that Modi desperately wants a second term and although he has accomplished a lot in the 2.5 years that he has been in power he wanted to create a sensation that would carry him to victory in 2019. "In 2004, after four years of huffing and puffing, Vajpayee's government saw growth rebound spectacularly only in its final year (2003-2004). But people hadn't begun to feel the difference," he writes. So the BJP lost in 2004. "Modi does not want to face the same fate as Vajpayee, and this is one reason why he may be willing to court more risks in a bid to retain power in 2019." By doing it now Modi has calculated that there is sufficient time for the economy to recover from the wounds he has inflicted on it. Will it? The whole gamble is based on jealousy of the poor for the rich. The poor are celebrating the severe pain they feel because they think that the rich are suffering much greater pain. We would argue that cash money is not black money, in that 99% of cash transactions are undertaken by the poor in their daily lives. The threshold for paying income tax in India is an annual earning of Rs 250,000 which means anyone earning Rs 21,000 and above should be paying income tax. No one can survive on Rs 21,000 a month in any of our cities, after paying rent and school fees. Every electrician, plumber or mason earns more than that and does not file tax returns. Modi wants to build many smart cities to urbanise India, to reduce poverty, because a nation cannot get wealthy without drawing people from villages into cities, with their advanced infrastructure. In fact, everyone of these people pays sales tax on the tools they use to ply their trades and almost every service in India is taxed at 14.5%, with 3% cess. If Modi had wanted to make people honest he could have increased the threshold of income tax to Rs 500,000, about $7,300, and 99% of people would be white. He has not appointed Lokpal, not a single politician associated with 2G, Coalgate or Commonwealth Games scam has gone to jail and more than 100 fugitives are enjoying life abroad. This is a cynical assault on the nation. Modi deserves to be booted out.