For a government which has mastered the art of event management and never missed an opportunity to ‘celebrate’ a slew of anniversaries, there has been a markedly muted response to the second anniversary of its dramatic demonetization announcement, almost as if the crackdown on crackers has also silenced the government’s otherwise cacophonous 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 8th 2016 decision was pitched. Yet today, a decision that was central to the government’s anti-corruption political rhetoric, is now slowly sought to be 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 marked 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 at all major military stations across the country with the prime minister leading from the front at a Combined Commanders Conference in Jodhpur. With full page ads and television footage of the strikes, there was a conscious attempt to hype the moment as the Modi government’s very own ‘Vijay Diwas’, a ‘battle’ that had been won over the traditional ‘enemy’, even if the actual gains accruing from the attack are debatable. This was in your face muscular military nationalism being paraded by a government keen to contrast its macho image with that of its enfeebled predecessor.
That gung-ho machismo has now gone missing in the context of the government’s other big ‘war’. A year ago, the opposition called November 8th a ‘black day’, almost coercing the government to respond with its own ‘Anti Black Money Day’ initiative. Finance minister Arun Jaitley tried to give it a positive spin, calling it a ‘watershed moment in the country’s economic history’. And yet, however much the government’s spin-doctors might seek to puff up its DeMo drive, the narrative has clearly shifted: this is no longer about a crusade against corruption or black money, or even an attack on terror funding or counterfeit currency, but instead is now being projected as a move that has spurred the digitization of the economy and helped widen the tax base. But even these claims are now under the scanner.
Take for example the government’s claim that demonetization had pushed India towards a cashless digital economy. RBI figures show that the currency in circulation as on 10 October 2018 was Rs 19.688 lakh crore, which is actually Rs 1.711 lakh crore more than on 8 November 2016. The monthly withdrawal of cash from ATMs touched Rs 2.76 lakh crore in August 2018, up from Rs 2.20 lakh crore in August 2016, a jump in excess of 25 per cent! And the currency to GDP ratio at the end of FY 2017-18 is back to 10.9 per cent from its previous year’s value of 8.8 per cent.
Indeed, the goal-posts have been changed so often that it is perhaps hard to even remember what the original agenda was behind the sudden withdrawal of Rs 500 and Rs 1000 rupee notes from the system. At the time, Mr Modi had 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. At a public meeting in Goa, Mr Modi had tearfully said, “I will not be cowed down. I will not stop doing these things, even if you burn me alive.. hang me if I am proven wrong.” It was just the kind of passionate, chest-thumping populist demagoguery that the prime minister has made his successful calling card.
Even as millions queued up for days to exchange their old notes and banks struggled to cope up with the demand, there was a sense of hope that co-existed with the anxiety. A ‘we shall overcome’ spirit seemed to suffuse the citizenry, a belief that the prime minister 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-fourths majority. ‘Note-bandi’ was hailed as a magic bullet that had annihilated the opposition.
And yet, two years later, there is enough anecdotal and psephological evidence to indicate that ‘note-bandi’ is no longer seen as an electoral asset to be trumpeted on the campaign trail. Where once the government claimed that demonetization 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 man in the middle and bottom of the pyramid 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: demonetization 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 upto Rs one crore is perhaps a belated recognition of a reality that has been staring at this government for two years now: demonetization 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 always hesitated to take right through his public career for fear that it will somehow undermine his larger than life image: actually apologise to the country for getting demonetization 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 MP 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!
A shorter version of this column appears in Hindustan Times