PM Modi should accept demonetisation was wrong, writes Rajdeep Sardesai
Whatever spin the government may now give, there is no escaping the original self-proclaimed agenda behind the sudden withdrawal of ₹500 and ₹1000 rupee notes from the system. Two years later, there is growing evidence to indicate that ‘note-bandi’ is no longer seen as an electoral asset on the campaign trail
For a government which has mastered the art of event marketing and management, there has been a markedly muted response to the second anniversary of its dramatic demonetisation announcement, almost as if the crackdown on crackers has also silenced the government’s propaganda machine. ‘Note-bandi’, after all, was hailed at the time by the government’s cheerleaders as the biggest and bravest step taken by Prime Minister Narendra Modi: a modern day, revolutionary ‘war’ against corruption and black money is how the November 8, 2016, decision was pitched. Yet today, a decision that was central to the government’s anti-corruption political rhetoric is slowly being consigned to the edges of collective memory, almost as if there is little left to celebrate any longer.
Contrast this with the exuberance with which the Modi government celebrated the second anniversary of the surgical strikes across the Line of Control in end September this year. The Parakram Parv or Surgical Strike day was marked with a series of public events in a conscious attempt to hype the moment as the Modi government’s very own ‘Vijay Diwas’. This was muscular military nationalism being paraded by a government keen to contrast its macho image with that of its allegedly enfeebled predecessor.
That gung-ho machismo has now gone missing in the context of the government’s ‘war’ on black money with a strident opposition, including the otherwise cautious former Prime Minister Dr Manmohan Singh, describing demonetisation as a classic case of ‘economic mis-adventurism’ that had caused ‘havoc’ in the economy. Finance minister Arun Jaitley has been almost the lone warrior for the Modi government while now claiming that the aim of demonetisation was never confiscating cash but helping to formalise the economy. Clearly, the narrative has shifted from black money to a cashless economy to claims of widening the tax base.
And yet, whatever spin the government may now give, there is no escaping the original self-proclaimed agenda behind the sudden withdrawal of ₹500 and ₹1,000 rupee notes from the system. At the time, Mr Modi pitched his decision as a ‘moral cleansing’ of society, a puritanical zeal that saw the prime minister make an emotional appeal to the nation to give him just 50 days to set the black economy right or publicly hang him. It was just the kind of passion that the prime minister has made his successful calling card.
Even as millions queued up for days to exchange their old notes, there was a sense of hope that co-existed with anxiety. A ‘we shall overcome’ spirit seemed to suffuse the citizenry, a belief that Prime Minister Modi was a Robin Hood-like hero who would serve the poor by teaching the corrupted billionaire elites a lesson. Most national opinion polls at the time showed the prime minister’s popularity at an all-time high: just months later, the BJP swept to power in the crucial UP elections of March 2017 with an unprecedented three-fourth majority. ‘Note-bandi’ was hailed as a magic bullet that annihilated the opposition.
And yet, two years later, there is growing evidence to indicate that ‘note-bandi’ is no longer seen as an electoral asset on the campaign trail. Where once the government claimed that demonetisation had broken the back of Naxalism, it can hardly suggest that in poll-bound Chattisgarh against the backdrop of another bout of bloody Naxal violence. In Madhya Pradesh and Rajasthan, two states with large small farmer and trader populations, the BJP again has to tread warily: it is, after all, the ‘small’ individual who seems to have suffered the most as a result of the abrupt severing of traditional cash transactions in the informal economy. The wounds of the police firing that resulted in the death of five farmers in MP’s Mandsaur are still raw: demonetisation was seen as a trigger for the farmer protests, disrupting every aspect of the rural economy, from land markets to credit networks to procurement prices.
The prime minister’s Diwali bumper offer to the country’s micro and small and medium enterprises (MSMEs) of super-fast loans up to ₹one crore is perhaps a belated recognition of a reality that has been staring at this government for two years now: demonetisation and then the Goods and Services Tax (GST) were a ‘double whammy’ that almost knocked out those who could least afford to suffer the disruption. Which is why the prime minister may wish to seriously consider taking a step that he has assiduously avoided right through his public career for fear that it will somehow undermine his larger than life image: publicly accept he got his mission demonetisation wrong!
Post-script: Off record conversations with netas on the campaign trail are often a useful barometer to know ground realities. When I asked one of them in Madhya Pradesh what was going to be a key factor in a potentially tight election, he showed me a crisp 2000 rupee note, “Candidate aur leader toh matter karte hai lekin cash ke bagair engine nahi chalegi!” Cash, it seems, is well and truly back.
Rajdeep Sardesai is senior journalist and author
The views expressed are personal