On Friday, Day 38 of demonetisation, a day when the one of the most unproductive Parliament sessions came to a close, signs are evident that the Bharatiya Janata Party (BJP) is getting increasingly nervous about the electoral fallout of such a seismic change.
Reforms have always had a complex relationship with electoral politics. One of the reasons why political leaders shy away from initiating bold, transformative change is that very often the initial disruption lasts long enough to trigger an electoral backlash, and the eventual benefits are enjoyed by the regime that follows. This is, however, true only of structural alterations, not incremental steps, and demonetisation falls firmly in the former category.
As an administrator, Narendra Modi has never been risk-averse. If that mindset enabled him to take such a huge policy gamble, his supreme self-confidence as a mass leader and deep connect with people perhaps led him to believe that he will always be in control of the narrative, no matter how strange the beast that was unleashed.
The calculation perhaps was that the initial disruption could be limited to a short-term (if intense) inconvenience and the system would slowly reboot, to hit the stock and regeneration of black money by ushering in a less-cash regime, widen the tax net, banking network and generate some sort of revenue for the government, either in the form of tax revenues or reduction in the RBI's liability over destroyed currency notes. The push to a digital economy, as Firstpost had written on Thursday, is not a shift in narrative, but a logical continuation of the decommissioning strategy.
But the problem lay with the undistributed term "short term". How short is short term? Let us assume that the inconveniences and difficulties ushered in by the reforms last (as some critical estimates have put it) for six months. This period matters little, is indeed inconsequential, in the life of a nation undergoing a transformative change. But during each of these 180 days — as lives are lost, jobs are hit, the poor come under duress and people run out of cash and patience — the decision would have extracted a huge political price that any party or any leader can ill afford, no matter how influential and popular he or she may be.
The prime minister had initially sought a 50-day deadline for an end to disruption, even as queues grew longer and public endurance ran thinner. He later introduced a qualifier to the deadline, indicating that things will only begin to fall in place after 50 days. That was perhaps the first sign that the plan (assuming there was one) was going awry.
For a communicator extraordinaire obsessed with controlling the narrative, the Prime Minister has successfully avoided a debate in the Parliament. But a myopic Opposition, who made his job simpler by disrupting the House repeatedly until the penultimate day when they realised they had lost a golden opportunity to pile on the pressure, is only a part of Modi's problem. His bigger problem is managing perception, and here, recent events indicate that the script is running out of control.
During a couple of recent meetings, BJP office bearers and MPs apprised party president Amit Shah of the ticking time bomb that demonetisation has initiated. Details of the meetings, that have been widely reported, indicate a growing disquiet within the party as ground-level workers and lawmakers grow weary with each passing day of an electoral backlash. Modi and Shah still hold unquestionable grip over the party but the seams, it seems, are straining.
Some lawmakers from Uttar Pradesh, a state that goes to polls early next year, told Amit Shah in New Delhi on Wednesday that the goodwill and enthusiasm in favour of the party after the 29 September surgical strikes have been overshadowed by the distress over note bandi, as The Indian Express reported.
The common refrain, it appears, is that if the liquidity situation isn't eased over the next fortnight, the party will pay a heavy electoral price. At this stage, going by reports that cash infusion in ATMs has actually gone down despite the teller machines having been recalibrated (due to reports of banks hoarding cash for own high networth customers), that "quick restoration of normalcy" looks a far-fetched dream.
The prime minister, who has claimed to have gone through the implementation blues in some detail, has clearly overlooked or underestimated the innate Indian penchant for subverting rules. This has added to the perception problem.
As The New Indian Express reports, a BJP MP from UP told Shah during the meeting that there is a lot of "anger among people on account of the regular news of income tax raids yielding crores of rupees from unscrupulous elements. At the same time, people have to stand for hours before banks and returning empty handed".
A private sector bank was forced to suspend 24 of its employees as numerous fake accounts were busted from many of its branches all across India. A Times of India report pointed out that the I-T department, which is working in tandem with other investigative bodies to bust regeneration of black money post demonetisation, has since 8 November carried out a record 586 countrywide searches seizing more than Rs 300 crore in old notes, Rs 79 crore in new legal tender of Rs 2,000, and unaccounted income of Rs 2,600 crore.
While this is going on, a survey conducted by the Network 18 Group (through the Twitter handles of News18, News18 India, Firstpost, Moneycontrol and CNBC) found that support for Prime Minister's demonetisation is steadily ebbing. About 55 percent of the 4,680 respondents said the exercise worked, while 45 percent answered in the negative, as against a similar exercise undertaken through the Narendra Modi app last month that had more than 90 percent people supporting the move.
The pressure on the prime minister, who appeared before BJP MPs during a parliamentary party meeting on Friday, is palpable. He spent a fair bit of time criticising the Opposition and apprising the lawmakers of the benefits that a transformation to digital economy may bring. But unless cash scarcity is urgently addressed, mere persuasion won't work.
Updated Date: Dec 16, 2016 18:54:42 IST