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Oct 27, 2022

Neither 'Pro-Hindu' nor 'Anti-Hindu', Kejriwal is a Monetary Genius in Modi's Mould

The last time India witnessed a crazy proposal about money was in 2016, when Modi decided to withdraw 80% of the currency notes in circulation.
Arvind Kejriwal and Narendra Modi. In the background is a file image of Rs 500 and Rs 2000 notes being exchanged. Photos: PTI and Reuters.

In the race to the bottom that now seems to define Indian politics, a new depth has been plumbed by the Aam Aadmi Party’s Arvind Kejriwal with his utterly cynical and bizarre assertion that the Indian economy can be made to prosper if the photos of Laxmi and Ganesh are added to currency notes.

Since this irrational claim, presented in the form of a proposal, is calculated to annoy and embarrass the Bharatiya Janata Party which believes it alone has the right to flaunt ‘Hindu’ credentials’, BJP spokespersons have responded by telling people that Kejriwal is actually ‘anti-Hindu’. The evidence cited to back up this accusation does not speak well of the BJP. They say he sought to curb air pollution during Diwali by banning the use of firecrackers. Or that one of his ministers repeated the vows Dr Ambedkar took when he converted to Buddhism – the same Ambedkar that Narendra Modi claims to be a disciple of. The BJP has also accused AAP of being a “poor carbon copy of the original”, an accusation that does the original no credit.

Meanwhile, India’s Hindus, most of whom have seen their personal economic fortunes plummet despite the multitude of gods and goddesses adorning their walls, should be forgiven for wondering who on earth they should trust the keys of the country with. 

The last time India witnessed a crazy proposal about money was in 2016, when Modi decided withdrawing 80% of the currency notes in circulation (that too without having new notes available as replenishment) would spur the Indian economy by ending black money and curbing corruption. Like Kejriwal, he too was hoping the blind faith of people would help him hoodwink them. 

Just as Kejriwal’s followers insist in seeing virtue in his mad idea, Modi’s bhakts desperately clutched at the fiction of the new Rs 2000 notes carrying embedded microchips which could communicate with satellites and reveal to the authorities any unauthorised horde that is not in a bank – even if buried 200 feet underground. The end result was that the economy’s growth prospects got buried, while corruption never ended. 

In introductory macroeconomics, we are taught that money is a store of value, a medium of transaction and a unit of account. Kejriwal has added a fourth function which central banks around the world may want to study: it can be a medium of benediction too, provided the Hindu goddess of wealth and Hinduism’s divine remover of obstacles are duly portrayed. 

Of course, monetary economists are bound to ask whether the quantum of benediction will be a function of the total money supply (presumably the more photos of Lakshmi and Ganesh in circulation, the greater the blessings which will be showered), in which case the Friedman-Schwarz Quantity Theory of Money, MV = PY, can be replaced with MV = PY, where is the ‘blessings multiplier’ that boosts nominal GDP beyond what the money supply and velocity of circulation predict. 

It would also be interesting to see how the Kejriwal Theory of Money will handle business cycles, where the economy goes into recession. Would the blessings multiplier be boosted above its normal value by divine intervention so that the Reserve Bank of India and the Department of Expenditure can sit back as Lakshmi and Ganesha work their magic and the economy revives?

Kejriwal cites the presence of Ganesha on the (now withdrawn) 20,000 Indonesian rupiah note to argue that if a country where Hindus are barely 2% of the population can seek the elephant god’s blessings, why can’t India.

An image of the 20,000 Indonesian rupiah note, now withdrawn from circulation and replaced by a new series of designs. Photo: Twitter/@iam_Jitu

The last time I heard an Indian politician praise Indonesia’s money was when a BJP leader I know cited Ganesha and Garuda (the name of the country’s national airline) to me, to argue that Indonesia’s Muslims may have converted to Islam but they have ‘not forgotten their Hindu culture’ – unlike India’s Muslims, he added quickly. 

Perhaps Kejriwal met the same leader or has friends in the Rashtriya Swayamsevak Sangh (because the Indonesia obsession is a shakha staple) but had he looked into the actual effect of Ganesha’s blessings on the Indonesian economy, he may be disappointed. The fact is that there has been no Ganesha on any Indonesian currency note since 2008 and yet the Indonesians are twice as rich as the people of India. Perhaps Ganesha’s blessings operate in the monetary sphere long after he’s gone. Or perhaps they do not operate at all. 

The BJP says Kejriwal’s proposal is a ploy to fool Hindus before the upcoming municipal elections in Delhi. They may be right. He is a “poor carbon copy” but at least the BJP is tacitly admitting that the original Hindutva party uses Hinduism as a ploy at election time. And does a much better job at it.

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