Why Prime Minister Narendra Modi has already won the demonetisation gambit
Courage is often a misunderstanding of suicide or gamble. It appears that Prime Minister Narendra Modi, whose devotees are celebrating his “boldness” for delegitimising large bills, has in fact made a calculated gamble. And it is turning out to be an excellent move. He has already gotten away with it, only the extent of his rewards is unclear.
This may not be apparent at first glance, especially if you are not very fond of him. There are communism-grade queues outside banks, which do not have enough cash to distribute. For the first time an Indian economic crisis is not about people being broke but about their inability to reach their sufficient or abundant money. There are stories of the old dying in the queues, the poor distraught, restaurants and malls bleeding, commercial sex workers unemployed.
There is no doubt that the citizens are furious, but they will not punish Modi for it. He did suspect that. He may not have been so confident about inflicting demonetisation in the summer months when people, especially in north India are prone to violence.
Even though people have suffered greatly, and many have lost portions of their hard-earned illicit money, it is hard to dispute that the government has performed a moral act. Surprisingly, the government has been able to communicate the reasonable message widely and deeply. It is rare for people to have an accommodating view of a sudden policy that only has long-term benefits, especially one that has hurt them. But there is observable evidence that the general public is with Modi on this.
The hostile reactions to the cash crunch are understandable and worthy of respect, but some of the anger should amuse us. It reminds me of the men who used to burn the effigies of cricketers, including Sachin Tendulkar’s, after an Indian defeat. Journalists usually portrayed such extreme reactions as emotional outbursts of fans. In reality most of the effigy-burning was performed by bettors who had lost money on their emotional backing of India. Reactions to the demonetisation, too, contain the grief of hoarders clinging on to honourable reasons to be angry, reasons that they probably even believe to be true.
An unknown portion of India’s unrecorded economy is run by politics. Parties receive cash through illegal means, which they then spend on illegitimate or nefarious activities, which include efforts to win elections. The important question is why does Modi’s BJP need less black money than other political parties? Is the party comparatively cleaner, or does it have more sophisticated systems in place, systems that a Putin would recognise? We will go there another day.
One strand of the moral outrage against demonetisation has been led by the refined urban class that dislikes Modi. They are excited by any story that assures them that Modi has made a catastrophic mistake. The reason why the story about the new Rs2,000 notes bleeding colour received good play in the social media even after the government pointed out that the notes are meant to lose colour, and that if they don’t they are counterfeit.
There is something clownish about the urban middle class. They keep whining about the state of the nation but when powerful solutions appear they reject them. They reject them because they are as corrupt and harmful as the aspects of the nation they despise.
Not long ago they prayed for a clean, highly-educated politician who was not the genetic material of political dynasties; but when Arvind Kejriwal miraculously made an appearance they loved him only till he was a gadfly fast-until-orange-juice activist. When he turned out to be a sharp politician they suddenly wished to dismiss him as an “anarchist”. In Delhi they keep whining about pollution but they do not tolerate any inconvenience to their car travel. Their grumblings about demonetisation are in line. Their lament cloaks the immediate prospect of the policy as a highly effective and even popular measure.
A war against cash hoarding and illicit cash flow is also a war against disorder and informality, which means it is a war against two central qualities of the Indian way of life. Such wars against the Indianness of Indians can be destructive to politicians who wage them. But there can be great rewards, too, to those who take a chance. Some people may have theorised that the Delhi Metro, which sought to ban Indians from spitting and littering, would be defeated by rampaging mobs. Instead, commuters ended up appreciating how the Metro constricted their exceptional freedoms as Indians. It is highly likely that Indians would exhibit such a capacity for appreciation for Modi’s attempt to end an economic disorder. Also, he knows how to spin every economic good news in the coming months as a consequence of demonetisation.
It is tempting to imagine what would have happened if the Congress government had taken the same step. Or say, if the Aam Aadmi Party, if it had been at the Centre, had made the move?
It may have been disastrous because of how the parties are perceived by the people. Modi, for now, has the charm to get away with many reforms that other politicians and parties cannot. We must use this man to get some difficult things done.
Manu Joseph is a journalist and the author of the novel, The Illicit Happiness of Other People
The views expressed are personal