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3 Years Of Modi Government | That Masterstroke Called ‘Demonetisation’
On 8 November 2016, Prime Minister Narendra Modi announced that by midnight the official tender of Rs 500 and Rs 1,000 would lose value and become an ordinary piece of paper
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On 8 November 2016, Prime Minister Narendra Modi announced that by midnight the official tender of Rs 500 and Rs 1,000 would lose value and become an ordinary piece of paper. This decision, ostensibly taken to destroy fake and black money, sent the country in a tizzy as it took out 85 per cent of the currency from the system. Millions of people were compelled to standout outside, sometime, cashless ATMs to pull out either small denominations of Rs 50 or Rs 100 or the new series of Rs 2,000 notes. After six months of that momentous decision, memory may be fading of the nightmare many of us had to get through, but one thing that can be said with certainty is that demonetisation steeled Modi’s grip over the government and politics in a manner that was reminiscent of late Indira Gandhi after the Bangladesh liberation war.
His third year in power was defined not just by demonetisation, but the manner in which people believed in his flawed explanations for the disruption that he had caused in their lives. Though more than 100 people died standing in ATM queues there were no riots or violence as witnessed in another country, Venezuela, which had committed the folly of demonetising its currency. People accepted PM’s narrative of targeting the fat cats of the Indian economy and how they had to suffer as much as the poor. Much of the calm and acceptance in the rural areas can be explained through German word, ‘Schadenfraude’, which crudely means that happiness at someone’s misfortune. Modi managed to burnish his credentials as a person who was on the side of the poor through this note ban scheme. Elections to crucial state of Uttar Pradesh, considered to be critical by the BJP leadership to return to power in 2019, were won by a kind of brute majority that was inconceivable for the pollsters and more so for many journalists (including this writer). It was apparent that masses were willing to give a carte blanche in every which way to PM Modi so that he could improve their fortunes by creating jobs.
The purpose of revisiting the demonetisation decision was to highlight an important development — there was more government now than the country had seen in a long time. That does not mean that the quality of governance has improved, but the central government succeeded in establishing its imprimatur in every aspect of citizens life. Considered to be a functioning anarchy, Indians were directed for 50 days by some bureaucrats on how much they could withdraw money and when. Some 100 odd amendments were made in the initial note ban order.
It was in many ways the return to an Orwellian nightmare, but no one really contested it. Those parties that did try to organise protests found to their mortification that they got no support from their followers. So surely and securely had Modi controlled the narrative that many decisions that were taken subsequent to demonetisation and after the UP elections would worry those who want the governments to be less over-bearing. Now income tax officials can knock any one’s door without a warrant. And then in the name of reducing the NPAs of the banks, the government has armed itself to direct the RBI to resolve these issues. Critics believe that many favoured businessmen will get relief. Also, there is a more compelling issue of enlargement of Aadhaar in every walk of our lives. In the absence of privacy laws, there are fears that an individual’s personal data by the State to track or harass him or her. Though civil society organisations are still contesting many of these issues, the media and the political parties have lost their voice since note ban and state elections. What needs to be seen is whether they would recover it in the next two years of Modi’s term or would his rule become totally uncontested.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.