Shortly after the Uttar Pradesh Assembly election earlier this summer, an Opposition stalwart confessed his intense bewilderment at having misread the public mood. Active in politics since the early 1970s and a veteran legislator both in the State Assembly and Parliament, he imagined that the demonetisation of November 8, 2016 would have generated a backlash whose intensity would have devastated the Bharatiya Janata Party.
Certainly, media reports spoke of massive public inconvenience and mounting anger at the Narendra Modi government. Yet, when the EVMs were unlocked, there was a landslide victory for the BJP and a complete decimation of those parties that had protested loudly against the peremptory scrapping of the Rs 1,000 and Rs 500 currency notes. “I can’t believe”, he told me, “I got it so wrong.”
This veteran politician wasn’t the only one. Cutting across party lines — yes, there was intense nervousness within the BJP too — there was a feeling that Prime Minister Modi had overplayed his hand by undertaking an exercise that others had felt was too politically daunting. As the queues grew longer and the shortages of cash triggered exasperation and anger, the pundits saw parallels between Modi’s demonetisation and Napoleon’s Russia campaign. The expectations of imminent doom were also triggered by the scepticism of most established economists.
In putting demonetisation to the test of public opinion, Modi took on the big guns of the Establishment and the core support base of his own party, and won quite resoundingly.
Yet, the war has not ended. With the Goods and Services Tax adding another dimension to the reformist impulses of the government and signs of a post-Modi vacuum in poll bound Gujarat, the Opposition has sensed another chance to fell a Prime Minister who has a larger than life reputation and whose hold on the government is near total. The first anniversary of demonetisation has come in handy to resurrect the debate and portray Modi as a reckless adventurist who must be stopped and reduced to a lame duck Prime Minister. What began as an attempt to muddy the waters of caste politics in Gujarat has quickly been elevated into a larger battle against Modi’s larger campaign to reshape the contours of public life. Every aspect of government policy — from Aadhar and GST to bullet train — has been dragged into the poll campaign, with economists and the media playing cheerleaders.
The debate so far has centred on statistics. The fall in the GDP growth, the estimated job losses resulting from demonetisation and GST, the apparent slowdown in digital transactions and the fact that nearly 99 per cent of the scrapped bank notes found their way back as deposits have been cited as evidence of a flawed approach. Against this, the government has retorted with claims of an additional 56 lakh new taxpayers, nearly 40 per cent accretion of direct tax revenue, the deregistration of some 2.24 lakh shell companies and 30 crore new accounts under the Jan Dhan Yojana to demonstrate the big strides towards a “much cleaner, transparent and honest financial system”.
The debate over statistics and economic consequences is certain to be unending and fractious. However, at the political level, the debate is centred on a moral dimension. Modi has never lost an opportunity to drive home the point that following his bold measures, the dishonest are on the retreat and the generation of black money has begun to be rolled back. That he has also busted a business model whose competitive edge stemmed from the non-payment of taxes is also apparent. However, this fact is not being widely publicised for fear of giving offence to many traders and even professionals, particularly those in mid-sized towns, who were guilty of creating zero tax havens for themselves.
In India, however, nothing is ever discreet. The most telling anecdotes about demonetisation were about the gloating among the poor that their inconvenience was nothing compared to the pain and harassment experienced by those who had many briefcases of unaccounted cash to launder. Their anxiety hasn’t gone away with the government making it quite clear that post-demonetisation “the entire cash holding of the economy now has an address”. For those who have some explanations to give to the taxman, this government is an irritant. To be credible, Modi has to be unrelenting in his desire to roll back the tidal waves of corruption and black money. And the more he is unrelenting, the greater will be the decibel levels of those who want the Opposition to succeed.
In India, the quest for a brighter and more prosperous future has either involved Ram bharosa or sacrifice. It was Mahatma Gandhi who persuaded Indians that Swaraj wouldn’t come on a platter but had to be accompanied by sacrifice and even personal suffering. That, in his view, meant accepting lathi blows without retaliation and even giving up all relations with the government. Thus, lawyers were encouraged to give up their practice and students were asked to abandon their studies. Swaraj didn’t come instantly but did materialise as a consequence of cumulative sacrifice over a long period.
Modi’s appeal to endure personal inconvenience for a larger, ethical cleansing of India had elements of the Mahatma’s message built into it. Despite the cynicism of our age, millions of Indians not only responded but did so without any civil unrest — what my Opposition friend could not fathom. Through demonetisation, Modi involved every Indian in the biggest Swachch Bharat campaign crafted to date — a campaign that involves much, much more than getting rid of physical dirt.
Demonetisation was merely an aspect — an important aspect — of the larger bid to make India a corruption-free and law-abiding society. It was a battle. The war is ongoing.
The author is a senior journalist and Member of Parliament, being a Presidential Nominee to the Rajya Sabha.