Demonetization is not Ambedkar’s Idea
An interview of Prakash Ambedkar was published in the Indian Express titled " B R Ambedkar said currency should be replaced every 10 years: Prakash "
Prakash Ambedkar said in the interview: “It was way back in 1923, Babasaheb (Dr. Ambedkar) in his book titled ‘Problems of Indian Rupee’ had recommended that the Indian currency should be replaced every 10 years to end the menace of hoarding of rupees and checking inflation.”
Prakash Ambedkar claimed that Modi’s decision to demonetize Rs 1000 and Rs 500 currency notes were in consonance with Babasaheb’s theory.
Coming from Prakash Ambedkar, the grandson and heir of the great thinker and architect of modern India, the idea that Babasaheb would have endorsed, even in principle, the current demonetisation scheme, has far-reaching consequences.
Babasaheb’s insights on economics and his contribution to our economy are rarely acknowledged. His ideas deserve considerably more research and citation. However, in his doctoral thesis, The Problem of the Rupee: Its Origin and its Solution, there is no mention of demonetization by replacing currency every ten years.
RBI was conceptualized as per the guidelines, working style and outlook described in the book “ The Problem of the Rupee: Its Origin and Its Solution”.
The thesis of Dr. Ambedkar presented to the HiltonYoung Commission, the commission later went on to recommend the formation of a central bank (the Reserve Bank of India), which would separate the control of currency and credit from the government.
The Reserve Bank of India was established under the RBI Act of 1934 as the banker to the central government and it launched operations from April 1, 1935.
In The Problem of the Rupee, Babasaheb advocated the gold standard for the Indian currency system, as opposed to the gold exchange standard. He chronicled the historical evolution of the Indian currency system and documented the efforts of the colonial British regime in demonetizing gold and SILVER.
In the chapter titled ‘From a Double Standard to aSILVER Standard’, Babasaheb examined the proposals of the East India Company for the reform of Indian currency in the mid-1800s. He hailed the company’s efforts in fixing upon a monometallic standard as the basis of the future currency system in India
Babasaheb noted that the year 1833 saw IMPORTANT changes in the administrative relations between the three presidential governments in India – Madras, Bengal and Bombay. By an act of parliament, the imperial government set up a centralised system for legislative and executive authority over all of India. This change brought about a change in the prevailing monetary systems and it required local coinages to be replaced by the imperial coinage. “In other words, it favored the cause of a common currency as against that of a mere uniform currency [i.e. a currency composed of like but independent units].”
Babasaheb elucidated the legislative history of the rupee, observing that the Currency Act (XVII of 1835) would “ever remain memorable in the annals of the Indian history. It marked the culminating point of a long and arduous process of monetary reform and placed India on a silver monometallic basis, with a rupee weighing 180 grs. troy and containing 165 grs. fine as the common currency and sole legal tender throughout the country.”
References to demonetization are also made in the chapters entitled ‘The Silver Standard and the Dislocation of its Parity’ and ‘Towards a Gold Standard’. All such mentions in The Problem of the Rupee are in the context of demonetization of metals and not paper currency.
It is of utmost Importance to note that Babasaheb neither advocated demonetisation nor denounced it. He merely documented the history of legislative and administrative actions in demonetizing the two metal currencies – gold and silver – which had prevailed in the past. Nowhere in his entire treatise does Babasaheb suggest that currency should be replaced every ten years. Nor does he offer demonetization of currency as a solution to curb hoarding and to check inflation.
The ‘Statement of Evidence’, submitted by Babasaheb to The Royal Commission on Indian Currency and Finance, published in 1926, offered solutions for the reform of Indian currency, which included taking away the government’s access to currency mints.
He advocated for the constitution of a central bank to issue and manage currency rather than vesting control for its management and supply in the government’s hands, for he was certain that a government would surely issue more money than necessary.
Many people get confused because of below passage in which some other matter relates to Demonetisation was discussed by Dr. Ambedkar rather than the delusory claim that in order to curb corruption, currency should be changed every 10 years.
The present regime’s decision to demonetize currency notes is clearly one taken by the prime minister. Such a move would have been anathema to Babasaheb, who was against governmental control and involvement in the money supply. The present measure, to state the least, is exactly the opposite of what Babasaheb stood for.
BJP and some of Ambedkar supporters also have taken advantage of the erroneous seal of approval of the prime minister's move.
For this BJP is loudly invoking Babasaheb’s name in its favour by claiming that the party is realizing his “dream” by demonetising currency notes. Farcical appropriation of Babasaheb by BJP is enough to understand their cunningness.
Dushyant Kumar Gautam, head of the BJP’s Scheduled Castes Morcha, reportedly said in late November that those opposing demonetisation are “hurting the sentiments of Dalits by opposing Ambedkar’s views”.
While addressing a meeting organised to mark Dr. Ambedkar’s 61st death anniversary, BJP MLC from Telangana, N Ramchander Rao said that demonetization was the idea put forth by Dr. Babasaheb Ambedkar, the architect of the Indian Constitution.
He also said that Dr. Ambedkar had introduced the clause of Uniform Civil Code in the Constitution, but it’s the different matter of stratagem by them to support Muslim issues raised by BJP.
Maharashtra chief minister Devendra Fadnavis also said in the legislative assembly and also wrote on twitter on December 7, “How Bharat Ratna Dr. Babasaheb Ambedkar had advised demonetization in 1923 every 10 years.
The greater tragedy is that the mass of people, the depressed classes, hit hardest by demonetization, are being led to believe that it was Babasaheb’s idea. They get caught in this biggest conspiracy by the unknown source. Even many of the Twitter users, WhatsApp users, Facebook pages and people supporting Dr. Ambedkar’s ideology also are the victims of this false claim.
In a report on the occasion of Ambedkar’s Parinirvan Diwas, his death anniversary, it was distressing to find that while people are experiencing hardship they are also consoling themselves by believing that their idol had come up with the plan to demonetise.
Because of that, they believe that something good will come of all this, although to many observers it is clear that the larger good is likely to be a distant dream. In messages circulating in different languages, on social media and through platforms such as WhatsApp, it is being baselessly propagated that demonetization was favored by Babasaheb.
While writing on the issue of demonetization in the Economic and Political Weekly, the writer and activist Anand Teltumbe concluded,“The BJP has variously tried to project through its hanumans (Dalit leaders in their fold) that the demonetization decision was as per the advice of B R Ambedkar. It is a white lie.”
The noted economist and Nobel laureate, Amartya Sen, who recognizes Babasaheb to be “the father of my economics”, has termed demonetisation a “despotic act”.
It now falls on Prakash Ambedkar to clarify, without any delay, the accuracy of the claim that Babasaheb had said that currency notes should be replaced every ten years. We can’t hope for such frankness from BJP. The bibliographic citation from The Problem of the Rupee would be most helpful.
Prakash Ambedkar’s remarks assume greater prominence considering they appear to have given the BJP an opportunity to justify demonetization by attributing the idea to Babasaheb Ambedkar. As Prakash Ambedkar is a prominent member of the Ambedkarite movement, his clarification would be especially invaluable in helping us study Babasaheb’s ideas. It would also prevent any misformation, spread in Babasaheb’s name, from gaining credibility.
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