History often has the uncanny tendency of repeating itself, more as farce than tragedy. Prime Minister Narendra Modi’s decision of discontinuing the existing Rs 1,000 and Rs 500 currency notes with effect from midnight on 8 November evoked a reaction from the Congress party which was completely out of sync with the people’s mood.
If one looks at the past, the dissonance in the opposition’s politics and the people’s mood now is quite akin to a similar situation in 1969. The then Deputy Prime Minister and Finance Minister Morarji Desai had resigned from the then Prime Minister Indira Gandhi’s cabinet, in the wake of her decision to nationalise the banks. The resignation was the result of a series of bold economic decisions taken by Gandhi, without consulting with Desai.
Desai was not alone in his opposition of Gandhi’s economics, that was heavily tilted towards socialism. The bank nationalisation was accompanied by the abolition of privy purse and the reaffirmation of the state’s unquestionable right over private property.
Desai, perceived as a pro-capitalist, frowned upon these initiatives and exited the Congress party. A group of powerful right wing members of Parliament (MPs), led by Piloo Mody, ridiculed Gandhi’s policy, only to find themselves marginalised in the subsequent Lok Sabha polls in 1971.
In that regard, it would not be wrong to view Congress' criticism of Modi’s initiative from that prism of history. Only now, the roles are reversed. Desai’s opposition to Gandhi was not in sync with the people’s mood back then. And now, Congress’ opposition to Modi’s initiative is clearly falling foul with the common people’s expectations.
In one fell swoop, Modi not only reaffirmed his pro-people credentials but also burnished his image as a feisty fighter of black marketers and the corrupt. And this was no mean achievement. Of late, consistent attempts have been made by his rivals to bracket Modi as a 'pro-capitalist' prime minister. Remember Rahul Gandhi’s “suit boot ki sarkar” jibe directed at Modi, that did cause him discomfiture.
But it seems that Modi did have an ace up his sleeve. It would be naïve to assume that his decision was random, and that it had been reached at without giving proper attention to detail. In his monthly radio programme Mann Ki Baat, Modi had categorically forewarned the hoarders of black money to come clean and declare their assets under the 'voluntary disclosure' scheme. “This is the last chance for you,” he had warned in clear terms.
Though his warning did yield some positive results, the initiative fell far short of the finance ministry's expectations. A large section of those involved in corruption and dealing with cash money chose to ignore the government’s scheme, in the fond belief that the government would hesitate in taking a drastic measure, as it could adversely affect the economy.
That Modi has been contemplating some drastic measure was evident in one of his recent speeches, during his visit to Vadodara in Gujarat, where he had promised to launch a “surgical strike” against black money.
But his words, at the time, were taken as mere rhetoric that would not have any serious consequences. On the contrary, nobody knows it better than Modi that black money has become an essential lubricant for a parallel economy in the country.
In his home state of Gujarat, cash transactions in trade are the norm. In Surat, the diamond trade is largely transacted in cash deals. For the past two years, Modi has been urging the leaders of the diamond trade to conduct their business through the formal economy. There is little doubt that Gujarat would be one of the worst affected states by the decision – of banishing Rs 500 and Rs 1000 notes.
In his address to the nation on Tuesday, Modi seemed conscious of the hardships that the common man may face on account of this radical initiative. Yet, he appealed to the people’s collective goodness and honesty, to put up with the inconvenience in order to purge the country of corruption and terrorism.
His move of reaching out to people is guided by his political instincts that often makes him privy to their sentiments. In people's collective psyche, nothing gives more enduring political capital than the vicarious pleasure derived from the agony of those with ill-gotten wealth.
In 1969, when Gandhi had abolished the privy purse and nationalised the banks, the move had found unparalleled social resonance amongst the people; as it had challenged the status-quo and radically altered the hierarchy of the elite.
In Modi’s case, the decision to invalidate the Rs 500 and Rs 1000 currency notes is perceived as an operation carried out in total secrecy to upstage the hoarders of black money. The fact that Modi’s move was a closely guarded secret enhances the credibility of the move. This is the precise reason why the Congress spokesperson's attempt to find fault with Modi’s decision appeared to be in vain.