The Real CAB Daddy

Ok what’s the real deal about the Citizenship Amendment Bill really?

There was a lot of opposition to this bill, and the Home Minister handled himself quite well. Of course, most of his claims revolved around righting the wrongs of the congress and plain denials of any matters on constitutionality or morality in the bill. These have been discussed in detail across the media spectrum and in many a social media drawing rooms, so let’s leave out the technicalities, legalities or moralities of the Bill and try to unearth what’s the big idea behind all this. Where does this fit in the BJP agenda?

Theory A – The Half Medallion

The biggest and most meaningful claim is that the CAB is the other half medallion of the NRC. With NRC, the BJP aims to single out all illegal migrants in India. The Hindus and other non-Muslim communities will be covered under CAB and can escape from being tagged illegal migrants and can get a clean chit. The Muslims will not – they’ll be… well, thrown in jail! since none of the 3 nations – Bangladesh, Pakistan or Afghanistan will accept these migrants and India is not a signatory to the 1951 refugee convention.

Ok this theory sounds great, but if you think slowly, it really sounds too farfetched a theory.  It took the supreme court of India a little over 4 years to come up with an NRC for the state of Assam. The population of Assam is 3.1 crores as of 2012 so maybe 3.5 crores now? That’s about 2.6% of India. Ouch! So it might roughly take 35 times the effort (and money?) to extend this to the whole country.

Theory B: The North East Votes

The North East of India has been on fire since December 11th or rather 12th when the people disobeyed curfew orders and came to the streets to protest and demonstrate dissent. The problem with the north east is migrants from Bangladesh have been infiltrating since independence and this has obviously put the natural demographic out of balance. Language, culture and heritage is threatened and the natives of Assam and other parts of North East feel this is a matter of livelihood and religion has no place. Hence the people demand that with religion being no bar, all infiltrators need to be thrown out. The CAB doesn’t do this.

Practically thinking, there is no way these infiltrators can be thrown out, so why not give them citizenship and make them grateful to the BJP? They would also become loyal voters of the BJP.

But really? Would the BJP sink so low? Don’t answer that! The reason I ponder on this is, the BJP is already winning in the North East, what’s the need to actually go through the whole charade to get new voters? So even this theory doesn’t really fit.

The Real Fit

The all nation NRC+CAB doesn’t really sound like something that will see the day of light – or it might become something like a single use plastic ban which was in news for 2 weeks and then died out because BJP realized they had not really understood what this meant and we as a nation are not ready for it.The theory of changing demographics in NE is also a shot in the foot. BJP can win the states and votes without having to do this, it has already done this to some extent. So even this is not the real reason

The real reason according to us is getting a foot hold. Foot hold of what? The Constitution of India! The BJP is headed by some shrewd politicians, they may not be academically or intellectually gifted, but they are really sharp and know how to play politics. The triple talaq bill is an example. With triple talaq, they tested the waters of how accepting the nation is to its tyranny. Next came 370, NRC and Ayodhya – all accepted with a bare back by the people of India.

So this move of CAB, which to be honest makes hardly any difference to our nation (except the North East), make no difference to the citizens of rest the country nor will it deliver on its grand promise to be the savior of persecuted minorities in our selective neighborhood (remember 31,313? Which btw in itself sounds fishy, like someone put their fingers on the keyboard and hit alternating numbers). This is just a two-finger test.

Once the BJP has successfully inserted some religious tags into the constitution, and we have stood mute to this saying it has no effect on Indian Muslims or get distracted by something else, the BJP on its part has more or less made an inroad or got a foot hold at adding religious tags in our constitution. So its just a matter of time now that religious tags will be selection criteria for more constitutional remedies.

And on the day we wake up in the future to smell the gowmutra, our ministers will say, oh iske baare me poora sanshodhan hua hai and sabhi party ke logo ne iski sammati di hai. “Oh we have had discussion on this in the past and all parties concerned have given their consent”  

Why RBI held onto the status quo

The Reserve Bank of India decided to hold its rates in the Monetary Policy Committee meeting on the December 5 2019.

The reaction to this decision was well received by the analysts of the economy. But still, there was a group that expected the RBI to cut the rates.

Why did people expect the RBI to cut the rates?

We expected the RBI to cut rates because the state of the economy is far from showing any signs of recovery. The GDP growth is down, and there is no improvement in private investment either. By reducing the interest rates further the RBI and the government might’ve hoped to stimulate investment.

Why was no one shocked on the status quo of the interest rates?

We weren’t really shocked because even though it seemed like common sense to reduce the interest rates to stimulate investment, it somehow didn’t seem to work.

The RBI has reduced the repo rate 5 times already and there has been no significant effect on the economy or private investment.

Why hasn’t the rate cut made a difference?

It’s simply because of 2 main reasons,

1. Banks aren’t ready to pass on the benefit

With reduced interest rates, once would assume the commercial banks would reduced their lending rates and pass on some benefit to the consumers, but this didn’t happen. There are many reasons for this, the banks are already over streched with advances, the banks have mounting bad debts and fit because there aren’t enough quality borrowers inthe market.

2. Inflation is high

Due to an increase in fuel prices and food inflation, the WPI has increased to 4.9% which is well above the RBI’s target of 4%. Making further reductions would mean more money in the economy and hence trigger more price rise.

There is also a 3rd reason, since the economy isn’t that great, there is no need to invest right now in India. A rich investor who has easy and cheap access to funds in India would be tempted to borrow in India at a lower price and invest abroad. Already our foreign remittances are increasing, we don’t want to encourage further remittances do we?

Hence it makes perfect sense for the RBI to hold its rates.

But this leaves us with a site thumb. Who then will stimulate the economy? In 2011-12 when Pranab Da ended up over stimulating the economy, his only fault was just relying on the monetary policy and loosening it without care or concern.

Today we can’t rely on the monetary policy alone to get the economy back on track, we need the finance ministry to manage the fiscal policy and help revive the economy.

But now another question sticks out, does the government have any money left to do fiscal policy changes?

Where’s all the money gone? Why has GST failed? I guess that’s another blog.