Demonetisation: Dear PM, please don't mock the people waiting in long queues

As the PM tries to spin the narrative in favour of the government, perhaps a little more empathy will help

Ghar mein shaadi hai! Paise nahin…

"There is a marriage in the house but there is no money," cheerily said the Prime Minister Narendra Modi to a NRI audience in Japan. The crowd laughed out loud (or LOLed as it is called now). The PM's snarky comment followed by the laughter seemed like a snippet from some poorly edited comedy show where the laughter track had been added at the wrong moments.

The PM extolled the virtues of his move to an audience in Tokyo. On the evening of November 8, he had announced that at midnight their currency notes of Rs 500 and Rs 1000 will turn to worthless paper. A statement, that in hindsight, contributed to the panic on the ground.

As a panicked nation came out in droves to stand in queues and exchange these old, worthless pieces of paper, the PM may not have noted their "minor inconvenience" as he was abroad in Japan.

The supporters of the government had till then clapped non-stop telling us how brilliant this move to demonetise old currency was. These notes formed 86 per cent of all the cash that was floating in the Indian economy (as Finance Minister Arun Jaitley informed in a press conference on November 12). Political observers also commented how this move would take the wind out of opposition parties, especially in the upcoming Uttar Pradeshh and Punjab assembly elections.

The PM's demeanour in Japan was not a departure from the script. It was a moment of supreme confidence when the government decided on this move. It was either confidence in its ability to direct the media in a particular direction and thereby shape the narrative that drove the government to do this or it was sheer lack of some adult supervision. In the first four days after this major announcement, neither the government, nor its supporters were willing to even consider that this was perhaps a miscalculation; one that has thrown the country into chaos. Jaitley categorically said, "...there is no chaos". 

The supporters rejected the chances of this step hurting the poor outright. "From where will the poor get those notes?" was a question often posed. Even as the government tried to assert that there was no chaos, the narrative had already slipped out of its control. 

Having returned from his foreign visit, the enormity of the chaos seemed to have hit the Prime Minister as he started countering the negative political fallout of this move by spending his own political capital directly. This political counter from Modi began in Goa. Speaking in Goa, he said, "Those involved in scams, now have to stand in a queue to exchange Rs 4000." 

This statement once again, exposed the lack of empathy for the pains that millions of hardworking Indians who have been standing in those queues to get their own hard-earned money, have been going through.

Like some of his colleagues, who have said that the people complaining about this move are anti-national and black money hoarders, Modi compared these people to scamsters. Did he mean that millions of scamsters are leaving work to stand in queue and withdraw some cash? The situation outside banks has already become alarming with the old, the infirm, the daily-wagers and the sick also having to stand in lines, only to find that their protestations are being dismissed by Modi and his government as noise from black money hoarders and scamsters.

The government brought big names in support of this move with yoga guru Ramdev and other celebrities - some of whom have featured in the Panama Papers list - telling queued-up India, how brilliant demonetisation was. This was a government trying to spin an event as positive, the ground reality notwithstanding.

A sputtering Indian economy - that primarily moves on cash - now finds 86 per cent of the cash sucked out; a move that is going to have the most debilitating impact on the informal sector where the most poor are trying to eke out an existence. Even as Modi tom-toms a "surgical strike" on the black economy, he and his government seem oblivious to the collateral damage that threatens to nuke this informal sector that supports the poor.

In the same speech in Goa, he then brought out the big guns. He made an emotional pitch to the audience and in a choked voice, informed it about his having "left his home and family for the service of the nation". He referred to the threat to his life from the scamsters who were affected the most by his decision to demonetise old, high denomination currency notes. He then beseeched the people of the country to stand by him for 50 days as he battled the black money hoarders and scamsters.

The PM, more than his Cabinet, seems aware of the mess that this step has landed them in and by investing his own, valuable political capital at this moment, is trying to steer the narrative back to a positive one for the government.

The situation has exposed the lack of planning undertaken before such a massive operation began. Jaitley now talks about two-three weeks time needed to ensure all ATMs start working normally since the new Rs 2000 note is incompatible with these machines. Even after three weeks, the currency disbursal will not be normal as new currency supply will take a long time to reach old levels.

Speeches, emotional appeals and spin may perhaps ensure a positive political narrative for the government and the BJP, but this move has jeopardised the reputation of the Indian monetary system. 

As demonetisation sucks cash out of the Indian economy, it may clean out the cash component of black money, but it will also paralyse smooth functioning of the economy. As one of the commentators has argued, this move may only tackle the stock of black money, but not its future generation or the flow. One big reason for generation of black money is an oppressive tax system. India had been trying to move towards a simplified indirect tax system in the form of the Goods and Service Tax, but even this now seems under threat. The form the GST is taking is likely to ensure that compliance will not be simplified while evasion might remain lucrative. This will continue to provide reasons for generation of black money in the future.

So, if this huge step is unlikely to lead to reduction in black money in the long term, why was the Indian public subjected to this discomfort? Was it done only to put other political parties on the backfoot in UP and Punjab or was it done to inform the faithful that some action had indeed been taken to counter the menace of black money, as had been promised in the 2014 election campaign by PM Modi?

The reasons could be one or all of these but the present situation suggests that a ill-thought out action that has led to chaos in the Indian economy needs a kinder and more generous approach from the Prime Minister and his government. The people who make this republic are fairly adjusting people who work hard to get by in their lives. The least they deserve is a government and a Prime Minister that does not mock their helplessness. LOLing at your citizens, suffering because of your decisions, does not make for good politics.

Twitter: @Bhayankur
 

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