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RSS Ideologue and political analyst S Gurumurthy gave a series of interviews to news channels defending Prime Minister <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword>’s move on November 8 to demonetise high denomination notes. In these interviews, he made several claims connecting the circulation of high denomination notes to poor quality GDP that fails to generate large scale jobs. He also claimed India’s high GDP growth years between 2004-2010 were not due to production but asset price inflation. 
 
Here are 5 claims by S Gurumurthy that were fact checked by BOOM and found to be largely untrue. 
 
Claim 1: Cash to GDP grew disproportionately during the UPA/Congress regime from 2004-2014. 
 
Gurumurthy’s central argument is about UPA’s ineffectiveness in controlling the usage of cash in the economy thus contributing to uncontrolled growth of black money. 
 
Fact: A look at the data suggests otherwise. 
 
Cash in the economy grows in line with GDP growth. 
 
Infact the table below clearly shows that cash to GDP ratio fell when GDP growth slowed between 2010 to 2014. 
 
Between 2001 to 2004, with average GDP growth of 5.5%, cash to GDP showed a steady rise from 11.6% to 12.4%. 
 
The UPA came to power in 2004 and till 2010 with over 8% GDP growth, cash to GDP once again showed a steady rise from 12.4% to 13%. 
 
But the period from 2010 onwards to 2014 shows a clear decline in the proportion of cash. The ratio fell from 12.21% to 11.60% and spiked to 12.25% in 2015 at a time when the BJP returned to power. 
 
This clearly shows there is nothing unusual in the rise of cash in the economy as it usually follows the GDP growth trajectory and is also linked to inflation. 
 
 
 
Claim 2: India’s high cash to GDP ratio is responsible for low job creation 
 
Fact: While Gurumurthy is correct that high GDP growth has not necessarily resulted in creation of higher number of jobs, there is no specific research to prove a correlation between high cash and GDP in job creation. 
 
Countries with varied range of cash to GDP ratio have lower unemployment rate. For instance, Japan which has a high cash to GDP ratio at 18% has an unemployment rate of 3.1%. Switzerland’s cash to GDP is at 10% but their unemployment rate is also around 3.3%. 
 
Claim 3: India’s GDP growth between 2004 and 2010 was led by asset price inflation. 
 
Gurumurthy’s next claim dismisses the over 8% GDP growth in the period between 2004-2009. He claims that the growth during this time was primarily led by asset price inflation in real estate,gold and stocks. 
 
Fact: While asset prices did rise exponentially, there is no credence in the claim that economic output or production of goods was poor during 2004-2009. This can be seen in the manufacturing numbers of automobiles and steel. 
 
In the period between 2004-2009, 55 million new vehicles <a href="http://www.ijcrar.com/vol-3-2/M.%20Krishnaveni%20and%20R.%20Vidya.pdf">(click here)</a> were manufactured versus 30 million vehicles manufactured between 1999-2004. Also, around 257 millions of steel <a href="http://steel.nic.in/development.htm">(click here)</a> were produced domestically as compared to 160 million tonnes of steel produced in the five year period between 1999-2004. 
 
This growth in economic output reflected in the profits of BSE 500 companies that grew at a CAGR of 21% in the period between 2004-2009. 
 
Claim 4: Rise in High Denomination Notes was very large between 2004 to 2010. 
 Gurumurthy blames the <keyword id="6359397" type="PERSON" weightage="20" keywordseo="Manmohan-Singh">Manmohan Singh</keyword> government for raising the supply of high denomination notes during this period which made it easier to hoard black money. 
 
Fact: 1,000-Rupee notes were introduced in 2001 and its share rose ten times between 2001-2004. The share of 500 Rupee notes also nearly doubled during this period. This <a href="https://rbi.org.in/SCRIPTs/PublicationsView.aspx?id=14932#3">RBI report</a> points out that 500 denomination notes quickly emerged as the second most important denomination since 1998-99 and replaced 100 Rupeenotes as the most important denomination in 2003-04. 
 
Hence, to single out a particular period for a rise in high denomination notes is selective splicing of data without giving a context of how the supply rose in the preceding years as well. 
 
Claim 5: <keyword id="3315394" type="UNKNOWN" weightage="20" keywordseo="demonetisation">Demonetisation</keyword> will lead to more jobs through better quality GDP growth 
 
Fact: Again, this is Gurumurthy’s personal opinion as he has not presented any data to support this claim. The benefit of demonetisation to the country’s economy is yet to be proven with no domestic or global precedence available. 
 
 
 
 
(The article is written by Jency Jacob and Sneha Alexander. The article was first published in <a href="http://www.boomlive.in/factchecking-rss-ideologue-s-gurumurthys-claims-on-demonetisation/">www.boomlive.in</a>)

Fact Checking: RSS ideologue S Gurumurthy’s claims on demonetisation

<a href="http://www.businessinsider.in/cashless-Gujarat-village-Akodara-and-heres-my-takeaway-from-what-I-saw/articleshow/55668912.cms">Akodara, a small Gujarat village, recently made news for being the first Indian village to go cashless</a>. Now, following in its footsteps is another small village near Mumbai where everyone is learning to making payments through electronic transaction, whether it's to buy vada pav or tractors. 
 <keyword id="3912650" type="UNKNOWN" weightage="20" keywordseo="dhasai">Dhasai</keyword> is a small village in Thane district 70 kms away from Mumbai, which serves as a financial hub for 60 neighbouring villages. The village has over 150 businessmen and 400 traders. 
 
With a population of approximately 10,000 people, it is the first village in Maharashtra to go cashless. Dhasai was chosen for this initiative because of the simple reason that all the villagers here and in the surrounding 25 villages had bank accounts opened under the Jan Dhan scheme, and so all of them had debit cards. 
 <keyword id="6358007" type="CITY" weightage="20" keywordseo="Bank-of-Baroda">Bank of Baroda</keyword> and an NGO called <keyword id="3912651" type="UNKNOWN" weightage="20" keywordseo="swatantryaveer-savarkar-rashtriya-smarak">Swatantryaveer Savarkar Rashtriya Smarak</keyword> decided to transform Dhasai into a digital village. The NGO has been training the villagers in using digital methods of transactions, following the demonetisation of banknotes. 
 
NGO chairman Ranjit Savarkar, who is also Director at the Maharashtra Military School in Murbad, recently said - “The effects of demonetisation have largely been painted in a negative way, particularly with regard to the effects on villagers. Recently in Parliament, Congress leader Anand Sharma wanted to know if a farmer could carry a debit card in his dhoti; the same farmer carries cash in his dhoti, why can’t he carry a debit card?” 
 
Savarkar said he chose Dhasai to implement his idea as its population is less than 10,000, adding there are three to four such small villages in every taluka in Thane district which could go cashless. 
 
After Dhasai was the top choice, Point of Sale machines were handed over to around 100 traders in the village, and installation security deposits and monthly rentals were waived off. 
 
Villagers were initially hesitant as they felt they wouldn't be able to grasp the technology. Meetings were held with the villagers to dispel this myth and to educate them on the various features of the PoS machines like electronic wallets and RuPay cards, which they could used for all monetary transactions. 
 
On Thursday, 39 more card swiping machines were commissioned in Dhasai. By this time, everyone - from traders, street hawkers, barber, doctors, vegetable sellers, fruit vendors and others providing goods and services - was seen using swipe machines for cashless transactions. 
 
Bank of Baroda says it will be charging 0.75% transaction charge on transactions that are lesser than Rs 2000. Meanwhile, traders have been given concessions as they are being encouraged to open current accounts for Rs 2,000, instead of Rs 10,000. 
 
It is also being planned that school teachers and children will be educated on how to use the machines.

After Gujarat's Akodara village, now this tiny village in Maharashtra is making news for going completely cashless

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Fact Checking: RSS ideologue S Gurumurthy’s claims on demonetisation

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After Gujarat's Akodara village, now this tiny village in Maharashtra is making news for going completely cashless

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