Demonetisation effect: Have patience, major moves don't show immediate results

The ambit of the discourse of the dissidents against demonetisation has essentially travelled through these stages:

The obvious first was the shell-shocked reaction best symbolised by Mamata Banerjee’s simple but furious tweet

The second was the trickling of the cautious opposition to Modi’s bombshell, akin to not taking any firm position, best exemplified by Mulayam Singh Yadav who sought a temporary rollback of demonetisation.

The third, after the anti-Modi political spectrum realised that demonetisation was here to stay, was to launch street rallies best exemplified by the tactical alliance between Arvind Kejriwal and Mamata Banerjee.

The fourth is represented by the ongoing efforts to confound the discourse by a variety of tactics, which include invoking stories of poor implementation, suffering of the farmers, and the poor people.

Prime Minister Narendra Modi has yet again, with the decision to demonetise high currency notes, taken a bold step and set the national narrative. Forty-one days later, demonetisation still occupies the mind space of the nation — be it the media, political cirlces, coffee shops, restaurants or elsewhere. And as alleged, it is not possible that a prime minister would not think through a move like this before implementing it or the fact that this is also another reflection of Modi's style of politics of personalising everything.

Prime Minister Narendra Modi. PTI

Prime Minister Narendra Modi. PTI

A move like this, no matter how well thought out, is bound to encounter all sorts of implementation issues and other hurdles. It is pertinent here to compare the demonetisation drive with three similar bombshell-like moves that Prime Minister Indira Gandhi had unleashed upon India:

The abolition of the Privy Purses, which essentially was a betrayal of the trust that Princely States had reposed in the Indian Union, and in the person of Sardar Patel.

The so-called Land Reforms — which was her way to repay the Communists for their support — which created chaos in the countryside, a subject for a separate exploration.

Bank nationalisation, which not only eroded the financial health of numerous private banks but paved way for their intense politicisation.

However, with demonetisation, the constant refrain seems to have been only one of inconvenience in the form of long ATM queues, and inadequate supply of new-denomination currency, which has, as expected, become a major political weapon in the hands of the Opposition.

It is amusing and revealing, at the same time, to examine the record of the anti-demonetisation champions. It is currently led by the Congress party. Apart from 40-odd years of uninterrupted rule, and then two consecutive terms, the party had ample time, opportunity and people’s trust to implement even a fraction of what the Narendra Modi government is currently attempting. And yet, despite the 2014 electoral drubbing it received, it continues to do more of the same: wasting taxpayer money both within and outside Parliament.

From wasting at least two full sessions of the Parliament since 2014 to blocking key legislations like the Land Acquisition Bill, and GST, it seems that the Congress' solely cares about bringing down Modi at any cost. The regional parties — Samajwadi Party, Trinamool Congress and DMK — have joined the Congress in criticising the government's move. However, the UPA-I and II had ample of time to do everything that they preach today and has little right to condemn a government which has taken strict steps and introduced reforms to improve India’s global standing.

The demonetisation naysayers also point, as evidence, to the fact that the corrupt have still managed to game the system by converting their dirty money to new currency as numerous raids over the past month have revealed. But one should view this development as a positive indicator: that these raids, etc have only exposed the pervasive extent of the rot that has corroded the system. From top officials of reputed and “safe” banks like Axis Bank to employees of the RBI itself to Karnataka government bureaucrats, it appears that the pestilence of corruption has become incurable.

But the most significant item missing in the anti-demonetisation discourse is how badly it has dented terror financing and effectively checked the use of FICN (Fake Indian Currency Note). Coming closely on its heels is this detailed Mintreport, which reveals how demonetisation has “brought the trafficking of women and girls for sex work — a Rs 20 trillion industry — to a grinding halt."

Yet, as it has continued to pan out, the mainstream media discourse seems to have singularly focused on the inconvenience of ATM queues, as if that was the only impact of the demonetisation exercise. The other important factor fuelling this one-sided narrative is the fact that this discourse occurs primarily in the realm of the mainstream English media, the purveyors and consumers of which happen to be mostly urban Indians. Thus, the incongruence of people willingly queuing up to avail the benefits of — for example — a Brand Factory mega sale and the belief in the aforementioned one-sided narrative is lost. The reality is that urbanites take for granted certain comforts — like not standing in queues — and any narrative that’s focused on upsetting this applecart naturally finds takers.

But various journalists and workers across political parties that I spoke to, paint a dramatically different picture of the real sentiment towards demonetisation in small towns and villages. Suffice to say that the general view emanating from this quarter is this: Modi has undertaken demonetisation for the good of the country. It’s not far from the truth to say that the mainstream discourse on demonetisation ignores or conceals this crucial, popular sentiment much like the narrative did during the 2014 Lok Sabha Elections and the US Presidential elections, where Donald Trump emerged victorious.

Indeed, it is impossible to issue grand predictions and prophecies — both positive and negative — regarding a far-reaching move like demonetisation even as it is unfolding. Fully analysing such high-impact moves — we can recall both the doomsday prophecies and splendid exaggerations when Prime Minister Narasimha Rao opened up the Indian economy — requires patience and level-headedness at the least. In this light, it is not until 2018 or 2019 that a reasonably clear picture of demonetisation will emerge.

Until then, we can only try and separate the wheat from the chaff in the ongoing discourse because, let’s not forget that demonetisation is just one, but a hugely significant part of the prime minister's larger game plan.


Published Date: Dec 19, 2016 07:44 pm | Updated Date: Dec 19, 2016 07:44 pm