Demonetisation: Narendra Modi has won the battle of perception; Opposition is barking up the wrong tree

From the onset it was known that the amount of scrapped currency notes that would return to the coffers of Reserve Bank of India was likely to be just a fraction short of the total in circulation when Prime Minister Narendra Modi made the dramatic announcement in November 2016. Neither was the RBI report released on Wednesday surprising - the exact figure was only economic semantics or data detail - nor was Finance Minister Arun Jaitley’s claim that the objective of the step was fulfilled unexpected. True that Modi and his government made a virtue out of shifting goalposts before the 31 December 2016 deadline to deposit the high-value notes or SBNs (specified bank notes). Modi’s initial declaration listed four targets: corruption, black money, fake notes and terrorism. Yet, he never set explicit or detailed goals . [caption id=“attachment_3948849” align=“alignleft” width=“380”] File image of Prime Minister Narendra Modi. Reuters[/caption] Consequently, there was no way to objectively assess if the step was a success or failure. Leaving objectives notional provided space and opportunity to the government to present arguments like Jaitley’s: that the purpose of demonetisation was not confiscation of money . Yet, according to submissions by the government’s lawyers in the Supreme Court, the government initially estimated that almost Rs 5 lakh crore would not return to the banking system. The government did not envisage that such cash-holders possessed ability to put back unaccounted currency into the system by surreptitious means . The finance ministry formally asserted that demonetisation had a five-fold objective : flushing out black money; eliminating fake Indian currency notes (FICN); striking at the root of financing of terrorism and left wing extremism; converting non-formal economy into a formal economy to expand tax base and employment; and providing a significant boost to digitalisation of payments to make India a less cash economy. As we can see, these listed objectives are at variance with Modi’s declaration on 8 November 2016. When Modi took citizens into confidence he did not state that inducting the non-formal sector into the formal-sector and encouraging cashless economy were among his goalposts. Moreover, the word ‘cashless’ was used just initially and later when the goal appeared unobtainable, the idea of ’less-cash society’ was floated. The government provided a short time-frame to deposit or exchange the SBNs. Modi too indicated that the plan was kept secret to prevent black money holders from putting currency into the system. The government not just estimated but actively encouraged too the belief that a large amount of money would not get return. This was to be a windfall that would be distributed among people, it was believed. The  Opposition’s reaction to the RBI report and Jaitley’s assertions cannot be faulted. The entire exercise was truly a “colossal disaster” and “cost innocent lives”. Several opposition leaders asked for Modi’s apology and demanded that he “own up” the disturbances in lives of ordinary people including causing death of several. [caption id=“attachment_3123756” align=“alignleft” width=“380”] Representational image. PTI[/caption] Yet, despite having truth and reason on its side, the Opposition parties will not be able to convince people that demonetisation was not a sincere move on Modi’s part to rid the nation of some extent of corruption and black money. Jaitley later said that it is not the government’s “case that the black money has totally been eliminated”. It needs to be recalled that a significant number of people who now support demonetisation either personally participated or are in the know of someone who did, in the exchange of currency in lieu of compensation. They are thus aware that many people laundered money and are willing to await action against them. Contesting the government on the basis of RBI figures and questioning the prime minister’s intention when scrapping high value notes is unlikely to work for his adversaries because the idea has been very cleverly marketed among the people. As witnessed in Uttar Pradesh and Uttarakhand, support for demonetisation greatly supplemented other issues that the BJP raked up during the polls. The Opposition is erring by trying to challenging Modi on the twin turfs of credibility and commitment. He is taking the narrative forward every day, at times harping on benefits of DBT and on other occasions, emphasising other initiatives. By undermining demonetisation on the basis of RBI data, the Opposition parties are exposing weak flanks. Jaitley articulated this by arguing that those trying to dismiss demonetisation as a worthless exercise are either those who “never acted against black money while in power” or those are facing corruption charges. In the past 10 months the opposition has failed to convince people that the government and Modi had vested interests behind demonetisation. Modi won the battle of perception by a two pronged strategy: Firstly, he linked corruption with poverty. In his 8 November speech he stated: “Spectre of corruption and black money has grown and weakened efforts to remove poverty. Corruption has been spread by certain sections of society for their selfish interest. They have ignored the poor and cornered benefits.” Secondly, Modi successfully harnessed latent animosity of people towards those above them on the economic ladder. The prime minister was the first to realise the political use of the spirit behind the old Onida TV advertisement: ‘Owners’ pride, neighbours’ envy’. Most always are jealous of those who are better off. For the proverbial aam aadmi, the trader remains the archetypal corrupt person. Providing data that the number of Income Tax Returns (ITRs) registered an increase of 24.7 percent compared with a growth rate of 9.9 percent in the previous year helps convince people that demonetisation forced tax-evaders to come over ground. Further, absence of corruption charges against the government bolsters its claims of consistently targeting corruption. Instead of presenting the near total return of SBNs into the banking system as proof of failure of demonetisation, Opposition would serve its purpose better by focussing on the negatives of demonetisation that impacted people. Even on this front, it would make little sense to keep reminding people of their hardships because that is in the past. While for the better-placed people memories are important while deciding electoral choices, for the majority of common people, present day struggle and hardship plays a more decisive role when they queue up at booths. There is sufficient and significant data on disturbance to economy and how this resulted in rising joblessness and escalated rural stress but there has been little effort to harness anxiety of people on these fronts. Adversaries of the BJP are no different from a bowling attack which keeps pegging the ball in the batsman’s areas of strength. There are sufficient corridors of uncertainty where the BJP can suddenly become vulnerable. However, by remaining fixated at countering the narrative of demonetisation on the basis of RBI data on SBNs deposited, the Opposition parties are barking up the wrong tree. Instead of taking the cue from media and intelligentsia, Modi’s adversaries need to work harder and communicate with people and harness their restlessness.