NEWS

Why Demonetisation’s Failure Didn’t Benefit The Opposition

Broken trust.

02/09/2017 9:01 AM IST | Updated 02/09/2017 9:02 AM IST
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Indian Congress Party supporters shout slogans during a protest against demonetisation at the Reserve Bank of India in Mumbai on January 18, 2017.

It is easy to give post-facto explanations for anything. The Delhi commentariat consensus is that demonetisation's real intention was political — in other words, the Modi government knew the economic disaster it would beget. Secondly, we are told demonetisation helped the BJP win the Uttar Pradesh assembly elections.

Both of those are wrong. The Modi government has been keen to chart an economic success story. Demonetisation was as big a political risk as an economic one. Proof that demonetisation didn't help the BJP win UP lies in the BJP's campaign. They referred to notebandi rarely, pretended it hadn't happened, and were on a backfoot about its failures.

Would it not have been politically beneficent to this government if demonetisation had actually succeeded in destroying some black money? It is likely that prime minister Narendra Modi actually expected black money hoarders wouldn't be able to put their ill-gotten cash in the banks.

Demonetisation was as big a political risk as an economic one

The Uttar Pradesh elections began exactly three months after demonetisation was announced. The BJP worked quietly on the ground, polarising non-Yadav OBCs against Yadavs and Hindus against Muslims, even as the SP-Congress alliance was reduced to Muslim and Yadav votes, and Mayawati to Jatav and some upper caste votes.

In my experience of travelling through that election, most voters were ambivalent about demonetisation. They were supportive of it, especially the intention behind it, but they were not voting for BJP because of it.

It wasn't like November, when most people were gung-ho about demonetisation, feeling that the rich are going to be punished and the poor rewarded. The schadenfreude of November had given way to a feeling of ambiguity. In fact, people expected rich dividends by 31 December, Prime Minister Modi's deadline to end the hardships caused by demonetisation. This didn't happen.

The BJP campaign in UP successfully managed to take people's attention away from demonetisation, with an anti-incumbency campaign against the Samajwadi Party.

Be it in December or today, it has always been clear that demonetisation was a blunder of monumental proportions. It failed in its intention of destroying black money or ending terrorism or Maoism. Instead, it has slowed down economic activity to the point that jobs have been lost on a large scale, and few new jobs created.

Be it in December or today, it has always been clear that demonetisation was a blunder of monumental proportions

Why has the opposition not benefited from the failure of demonetisation? Despite a blunder so big, why does Narendra Modi remain popular? The answer lies in the failure of opposition leaders to communicate effectively with India's voters.

1. Gave up too soon: Opposition leaders were stumped and left speechless by the public support for demonetisation. Many of them spoke up against it, Arvind Kejriwal travelled from state capital to state capital doing rallies against it. But public support — driven by the schadenfreude that the rich were feeling hurt, as were corrupt politicians — defeated the morale of the opposition leaders. They also had to worry about securing their money and fighting the forthcoming state elections.

By contrast, Prime Minister Narendra Modi made it clear that demonetisation was only step one in his fight against black money. That narrative continues this day, with raids on opposition politicians.

The difference between the two approaches is of consistency. PM Modi, despite the failure of demonetisation, managed to give voters a consistent narrative. The opposition just forgot about notebandi after being scared by its initial popularity.

Hindustan Times via Getty Images
Delhi Chief Minister Arvind Kejriwal, Delhi Deputy Chief Minister Manish Sisodia, Tourism Minister Kapil Mishra, AAP Haryana Convenor Naveen Jaihind and party leaders during a 'Tijori Tod Bhanda Fod' rally, on January 1, 2017 in Rohtak, India.

2. Inability to shift the narrative: As the failure of demonetisation became clear, PM Modi quickly shifted the narrative to cashless economy. When a barely literate farmer in a UP village argued "Demonetisation ka fayda tab ho ga jab cashless ho ga (the benefit of demonetisation will be felt when the economy will become cashless)," one knew the power of Modi's ability to set the agenda.

The opposition first tried to corner the government on the hardships demonetisation had brought to the people. It showed the disconnect between opposition leaders and ground reality that many days passed after they realised the move was actually popular among the masses. This is when they needed to shift their narrative — from demonetisation brought suffering to demonetisation had failed. But the opposition has been clueless about both message and how their message will reach that UP farmer.

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NEW DELHI, INDIA DECEMBER 27: Congress Vice president Rahul Gandhi with West Bengal CM Mamata Banerjee during a joint press conference by the opposition parties against demonetisation at Constitution Club, in New Delhi. (Photo by Parveen Negi/India Today Group/Getty Images)

3."At least he's trying": This is the most important point, and it applies to everything Modi, not just demonetisation. No matter how much the Modi government fails, no matter how its work measures up to its promise of achhe din, people say at least he's trying. The implicit and unsaid in that statement is that the opposition isn't even trying. Modi might fail in destroying black money through demonetisation, but he doesn't go to Europe to celebrate his birthday and New Year's Eve like Rahul Gandhi.

An endless stream of scam headlines brought down the UPA. The opposition has no credibility before the voters. They were seen as opposing demonetisation because their own black money was under threat.

The opposition thus has to convince voters that it is trying. It can do so, for instance, by demanding that Modi take other policy initiatives to destroy the black economy. For this to have any impact, it would have to be done in a big, agitational way so the last man in the last village also gets to hear the opposition leader's idea of extinguishing black money. The voter would then be able to contrast the opposition's idea of dealing with the problem of black money against Modi's failed idea of demonetisation.

Instead, the opposition's critique of demonetisation is easily misunderstood as an insincere criticism of Modi from people who don't even want black money destroyed and corruption finished.

This applies not just to demonetisation but to politics in general. What is the opposition proposing to do differently from Modi that would bring jobs, development, prosperity? The voter doesn't know, the opposition just wouldn't say. Meanwhile, Rahul Gandhi is planning another foreign trip.

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