Demonetisation: Why India’s poor will no longer believe the news
The cash chaos following the demonetisation move by the Narendra Modi government is perhaps the most economically and socially disruptive act of State the world has seen since the Cultural Revolution in China.analysis Updated: Nov 18, 2016 07:09 IST
“But above all things, [the Prince] must keep his hands off the property of others, because men more quickly forget the death of their father than the loss of their patrimony.”
-- Niccolo Machiavelli, The Prince
Historians will likely mark the current ‘cash chaos’ as one of the defining moments in independent India. This is the time to save up news reports and analysis pieces, besides tweets, Facebook posts and videos to absorb the enormity of what India is going through. Millions of Indians are making their way to banks to line up and exchange their useless Rs 500 and Rs 1000 notes; those in cities are luckier to find banks and ATMs within reasonable distance but they end up waiting for hours nonetheless. In rural areas, where 833 million Indians or 69% of the population lives, the journeys will be long and arduous. We are possibly seeing the greatest churning of the subcontinent’s population since the Partition of 1947.
The cash chaos is also perhaps the most economically and socially disruptive act of State the world has seen since the Cultural Revolution in China (1966-76). If you think that’s an exaggeration, do the math. Three in four rural households have incomes less than Rs 5,000 per month but there is a strong likelihood that a majority of them have a Rs 500 note that they need to change. To take a different angle, India has around 248 million households. Even if you assume that 50 million households (200 million people at an average of four per unit) are too poor to have a Rs 500 note, that is still around 200 million journeys to the bank that need to be immediately made. Members of families will be going to banks more than once before the end of December; millions are thus setting off in India and trudging in different directions, looking for cash just because the government made them. This is a time when all of India is being socialised by everyday experience to understand, interpret and, in many cases, disapprove of the NDA’s policy of demonetisation.
The government recognises this is a problem but it is attempting to paper it over by invoking the spirit of voluntarism and sacrifice. We are told that a measure of “inconvenience” is necessary for the nation; temporary pain is “for larger gain”, as parliamentary affairs minister Venkaiah Naidu put it. Prime Minister Narendra Modi has saluted his countrymen. “People stood in line for four hours, six hours but accepted the decision in national interest the way people of Japan tackled the aftermath of the 2011 disaster... I never thought I will receive blessings for this,” the PM said while he was in Japan and subsequently asked the people to give him 50 days.
The Modi government is confident that it has infused this project with so much of moral meaning that people will forget their misery, come January. The assumption is that the poor and the middle class will respond to calls for sacrifice and be delighted that the wealth of the rich they know has suddenly come to nought – and that that admiration for the PM will translate into support for the BJP in the coming months.
The BJP seems to have, however, not fully absorbed what it has unleashed. It has effectively put on hold an entire society’s means of exchange, without which it is impossible to procure essential goods and services like food, medicine and transport. It is like getting back to a form of living before the division of labour was invented. If you don’t grow your own food, you have no way of procuring it as the means of exchange does not exist. India’s communities are not capable of coping with such experiments, however “temporary” the period is.
The real danger for the BJP is that its model of managing the narrative and influencing public opinion is likely to breakdown during this crisis. The Modi government has dominated India’s discourse through a focus on the PM, his upbeat rhetoric, actions and travel that are unfailingly relayed by the media. The BJP has also found a way to be constantly in the limelight through its nationalist posturing on JNU, protests in Kashmir, Pakistan-sponsored terrorism, beef ban, triple talaq and so on. Liberals often complain that the media is not adequately covering issues of public interest, that sections of the vernacular press are a lot more pro-establishment than their English counterparts and that the poor are being misled by the optimistic official narratives.
Those critical of the Modi government and its dominance of airwaves need no longer worry about the impact of skewed coverage. The poor, it turns out, have their own transcript of the news which is their lived experience since November 9. In fact the more the government’s spin is at variance with their own misery the more authority the PM and the NDA stand to lose. This is a possibility as the full measure of the suffering in rural India is yet to cascade to urban audiences. Farmers are unable to buy seeds to sow for the next season. The writer P. Sainath has said that besides farmers “landless labourers, domestic servants, pensioners, petty traders… and many other groups have taken a terrible hit”. It is indeed bewildering to get a grip on the billions of transactions that have not happened across India in recent days. Harish Damodaran, an authoritative voice on rural India, has said that even if households find a way to cope, the cash crunch is bound to affect factories and farms. He writes that hardly a tenth of India’s workforce gets its salaries credited into bank accounts – the rest get their wages in cash, either daily or weekly. If a substantial part of the 86% withdrawn currency is not replaced soon and if employers are unable to pay salaries for workers the former will have no choice but to shut down units or lay off workers. Likewise, farmers supplying milk to cooperative societies also get paid daily in cash, a practice that now stands disrupted.
Farmers, landless labourers, domestic servants, pensioners, petty traders, all these and many other groups have taken a terrible hit.— P. Sainath (@PSainath_org) November 16, 2016
The BJP assumes that satisfaction over the misery of the rich will be enough to secure support. It is betting against the depth of suffering now and the power of its recall value. There is no guarantee that citizens will make substantive gains once the process is complete. India will not become cash-rich like Saudi Arabia at the end of the demonetisation to buy off all its citizens with lavish benefits. Instead, what we are likely to see is an entire folklore emerge as to how the rich managed to get around demonetisation, through backdated invoices etc. Corruption and manipulation of the weak will not cease in 2017. For schadenfreude to be politically productive, it will need to translate into palpable suffering for the rich and indeed their naming, shaming and incarceration. We are unlikely to see any of that. Instead instances of writing off or adjusting the books for wilful defaulters will raise questions about the seriousness of NDA’s drive against the corrupt.
Meanwhile, the Opposition realises that the BJP’s monetisation scheme is politically monopolistic in intent as it wipes out the cash reserves of other parties. This is now a matter of their survival and that’s why they will try and present a robust counter-narrative, even if efforts to unite may be fruitless. The opposition will make the case that the BJP converted its own cash reserves before November 8 – and point out (eventually) that the ruling party is outspending all rivals in the upcoming UP elections. These lines of criticism will resonate with those who suffer in the lines now and add to the existing disaffection brought on by BJP’s anti-Dalit, anti-Muslim reputation that has consolidated over the last couple of years thanks to incidents of flogging and deaths over beef possession.
This, then, is politically a moment fraught with great risk for the BJP. It is the first time that the people’s everyday experience is, in significant measure, in conflict with Delhi’s self-assured narrative. That is not a situation any government likes to be in.
The views expressed are personal.
The author tweets as @SushilAaron