Midway through his prime ministership, Narendra Modi has made his first blunder, the botched exchange of high-value currency notes for new. But the remarkable point to note, politically, is that so many people have said (at least in the initial days) that they are willing to live with the inconvenience and dislocation, since it is in a good cause: attacking the black economy. This is one more example of Mr Modi’s ability to get the country to accept the narrative that he spins out. Weeks earlier, much of the country had bought another Modi narrative, as he successfully diverted attention from the extreme alienation, violent unrest and prolonged curfew in the Kashmir valley, by posing tests of nationalism that rode on the back of an army operation (don’t question the army, don’t question the government — or you are an anti-national).
Economists can argue till they are blue in the face that the scrapping of un-surrendered currency notes deals only with the existing stock of black money, not the flow of black economy transactions — which will continue. Reporters will draw attention to the thousands of crores that the BJP (and Congress, among others) has received in the past from unnamed sources —underlining the underlying hypocrisy. Analysts will point out that all economies have black economies that range from a low of 9 per cent of GDP to 30 per cent and more in even the advanced countries — no higher or lower than in India. What is worse, the black component of economies has generally been growing faster than GDP. The scrapping of old high-value currency notes, therefore, may cause unrecorded transactions to stop for a while, but they will resume. Undaunted, an emotional Mr Modi has stuck to his script and vows to take even more drastic steps.
This must be our version of what Oxford Dictionaries has declared to be the word of the year: post-truth. Mr Modi is a master in evoking the emotional reasoning that is the essence of post-truth — as indeed is Donald Trump. Don’t confuse me with the facts, what I feel is the reality. For decades, commercial advertisers have sought to exploit this limbic level of reasoning and consumer response by mixing up images of consumer products with, say, movie stardom, or success with the opposite sex. Mr Modi needs no such props. He is the messenger and the message.
The second point to note, mid-way through the life of this government, is how much a cadre-based party of many leaders has morphed in such a short space of time into having just one leader whom no one in the system will dare question. The party could not name a chief ministerial candidate in the Bihar elections last year, and is unable to name one for Uttar Pradesh now. To many observers, this is Indira Gandhi re-born. She had her post-truths too: three decades after her death, millions of poor voters continue to believe that she stood for the poor, though her record during 16 years of prime ministership shows that poverty barely declined. But like Mrs Gandhi, Mr Modi has become a populist. It is also uncanny that her advisors told her that, with bank nationalisation, it may be possible to abolish the income tax because the government would have access to so much money. Today, the Pune-based Arthshastra Prathishthan that says it met Mr Modi and advocated the currency note expropriation also argues that the income tax should be scrapped!
And so India has slipped into the category of countries with strongman leaders, democratically elected. Russia’s Putin and Turkey’s Erdogan are the contemporary examples usually cited for this category, but there is a slew of East Asian leaders before them who are seen to have delivered for their people. For Mr Modi at this point, it is easier to get marks for effort than for results; but that is only in the world of unemotional facts and numbers. For the future, we have to wait on events to see whether the strongman narrative plays out differently from other countries.