LESSON FROM INDIA’S DEMONETIZATION: RUSHING FOR “CHANGE”Kartikeya Batra
Part I: The Rise of a “Radicalized” Citizenry
It is at the least tricky and at worst dangerous writing such a piece when it is plausible that between now and publication, much of what the reader will read herein might change dramatically. Yet, this seems too important a phenomenon to be missed owing to what one may call ‘writer’s risk aversion’. By means of this word of caution, I, hereby, insure myself against this piece’s possible obsolescence in the days to come.
Demonetization: “Indians cheering despite chaos”
On the evening of November 8, 2016, India’s Prime Minister Narendra Modi made a sudden appearance on national television. Promising a frontal assault on money laundering and counterfeit currency, he unexpectedly announced that currency notes worth INR 500 (~US$ 7.5) and INR 1000 (~US$ 15) would cease to be legal tender beginning midnight, and that fresh currency supplies (for swaps) will hit the banking system the very next day. The move would suck out approximately 85% of all hard currency floating within the country’s cash-dominated economic system. Among other declarations, in order to avoid bank runs, he also announced a cap on maximum cash withdrawals from ATMs and banks until adequate supply of fresh currency (denominated in INR 500 and INR 2000) is available within the economy. Foreign Policy columnist James Crabtree’s opinion piece’s title “PM Modi’s Massive Gamble Has Indians Cheering Despite Chaos” (as published on NDTV.com) aptly explains the situation that ensued.
Following the November 8 announcement (until December 2, 2016, the date of completion of this piece), an over-stretched banking system – as unprepared for the announcement as common citizens – has been trying to cope with anxious customers and inadequate currency supply. Long, serpentine queues outside banks and ATMs are commonplace across cities, while remote villages and tribal areas are still awaiting cash supplies. Public distress is apparent, with major inconveniences being caused to, among other sections, daily wagers, small businessmen, families (in the millions) preparing for weddings during this time of the year, and depositors who can’t station themselves outside banks/ATMs for long hours due to physical constraints.
Nevertheless, from anecdotal evidence that one gathers overhearing people across urban streets and press reportage from the hinterland, there is significant support for the intent of weeding out ‘black money’ from the system – a privilege that has been exploited by the socio-economic elite for decades. Such is the sentiment towards this bold drive against “dirty” money that shoddy execution is being excused for the time being, and the country’s average citizen is patiently queuing up to withdraw her own money, in the hope that the PM’s audacious move – aided by public support – will yield a cleaner politico-economic system (although this might turn for the worse if patience depletes too rapidly), while also forcing the top of the country’s economic hierarchy to pay back for their unscrupulousness. It is remarkable that this support is pouring in despite the absence of a clear and objective assessment of the actual medium-term and long-term consequences of the policy.
That the opposition’s call to oppose demonetization has not received robust public support corroborates the aforementioned. Additionally, recent wins registered by Prime Minister Modi’s party in by-elections held after the November 8 announcement across as many as 5 major states also indicate this public sentiment (although it must be noted that the BJP is in power across all these states, which may have automatically improved the party’s chances).
Thirst for Change; Appetite for Policy Adventurism
A discussion on the merits and demerits of the move is a topic for a separate piece (which may not be required considering the rapid pace at which articles are being churned out from either side of the divide). In my opinion, however, this public sentiment in itself conveys something unique.
A remarkable thirst for immediate change is in the air. It is palpable across different geographies, all of which among them share the ideals of liberal democracies. I use the word “change” with a lot of caution, for I realize the decreasing marginal utility it carries today, after having been used (and abused) by a variety of stakeholders promising a range of deliverables across a wide spectrum of different political contexts.
This unencumbered appetite for dramatic change is manifesting itself in unexpected political mandates and mass responses to unconventional policy decisions. “Short term churn for long term reform” is a narrative being sown into public discourse, which is resonating with the masses. The socio-economically median (and below median) voter, running out of patience, is visibly turning against not only status quo, but also liberal incrementalism.
Manifestations are apparent without much ambiguity, and India is no exception. Risk appetite among the electorate has risen sharply. Ultra-ambitious promises are attracting votes, while tough policy decisions are being swallowed in the hope of a better future. In addition, such is the divergence among perspectives on these issues that I dare not judge their rationality from my limited perspective of being a privileged liberal.
In this context, the response to demonetization, from a sociological perspective, may be viewed as the Indian middle and lower classes’ participation in a mass campaign against an unjust economic system skewed in favor of those at the top of the socio-economic hierarchy. Yet, within India, this is only the most recent such manifestation.
In February 2015, after a horrific national debut, the Aam Aadmi Party – projected as the crusader against widespread political corruption – swept to power in New Delhi’s state elections winning a staggering 67 out of State Assembly’s 70 seats, thereby dismissing the massive mandate that the country had given Prime Minister Modi barely 9 months ago. The road to New Delhi’s Secretariat was indeed paved with tall promises of subsidized electricity and water tariffs, punishment to the corrupt, improved healthcare and women’s security, among others. An assessment of the Government’s performance on these promises is a different subject altogether. Nevertheless, in December 2015, reprimanded by the the Supreme Court of India – the country’s highest court – on the issue of increasing air pollution in the national capital, the Delhi Government took the courageous decision of implementing the “odd-even” scheme, which allowed odd and even numbered cars to be driven on alternate days. Most definitely, it meant massive inconveniences for Delhi’s citizens, but the warm reception it received suggested a similar appetite for accepting policy adventurism.
In fact, it is safe to argue that the very election of Prime Minister Modi and Chief Minister Kejriwal were facilitated by the disappointment and fatigue born out of the very nature of conventional politics in India. Somewhat analogous, although across different geographical contexts, are the election of Donald Trump as the U.S.’ President-Elect, U.K.’s vote in favor of exiting the European Union (“Brexit”), the rise of Italy’s Five Star Movement, Rodrigo Duterte’s election as President of the Philippines, and the visible rise of the French Right, all of which convey the rise of an agitated and socio-politically “radicalized” citizenry, who are no longer content with incremental change.
However, much like all forms of extreme tendencies, this phenomenon has the potential of yielding unanticipated and undesirable consequences. In Part 2 of this article, I will delve into reasons behind the rise of India’s “radicalized” citizenry, and the downside of this electorate’s rising impatience.