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Public Sentiment On Demonetisation Is At A Crossroads

11/12/2016 11:05 AM IST | Updated 11/12/2016 11:50 AM IST
Amit Dave / Reuters
People wait for a bank to open to withdraw and deposit their money in Ahmedabad.

The support for demonetisation is enduring into the third week of Cvoter Tracker, despite some visible problems. 85.7% respondents think the inconvenience due to demonetisation is worth the effort of fighting black money. But make no mistake, every fourth Indian is finding it really difficult to manage day-to-day life because of demonetisation. Which means, if just one in four respondents starts feeling the heat, all of a sudden you will find the narrative change to every second Indian showing unhappiness over demonetisation. So we are at the crossroads at the moment.

Ample public support for Prime Minister Narendra Modi was displayed when 82% respondents opposed the Bharat bandh call in Week 2. The PM's strategy to call into question the Opposition's morals has also borne fruit, with 78% of the respondents agreeing with his statement regarding the Opposition not getting enough time to manage their respective personal stashes.

READ: How Modi Might Win You Over After Demonetisation

More than 80% say PM Modi's popularity has increased, or remains high, since demonetisation. India is beginning to experiment with innovative policy measures and wants to own them. Demonetisation is one such measure and therein lies the opportunity or pitfall for the prime minister. He has taken the biggest political risk that India has seen so far. All credit for any success would go to him. So would be the blame for the slightest debacle.

In stark contrast to high approval rates for other questions, only 59% of the respondents deemed the execution of the scheme to be good. Clearly, much has been missing at the end of banks and financial institutions. Currency dispensing mechanism at the last mile was hastily planned and poorly executed, allowing for financial skullduggery. Almost every fifth Indian is saying that the implementation is either "poor" or "worst". And this number is increasing, which should alarm the government.

Rupak De Chowdhuri / Reuters
People queue outside an ATM of State Bank of India in Kolkata, India.

Regarding the "cashless economy" initiative, we observed that respondents tend to be less and less confident of the scheme as we moved from urban to rural areas. A majority of respondents in urban areas -- viz. 52.6% -- considered the scheme as completely practical compared to only 36.5% of rural respondents. Thus the government needs to bridge the trust, infrastructure and know-how deficit between urban and rural areas to successfully implement the "cashless economy". In simple words, an overwhelming majority of almost two-thirds of rural Indians don't see the "cashless economy" as a completely practical move. There's a long way to go on that front.

In response to the question "Who do you think demonetisation is hurting more?" the respondents believe that the rich and the poor are being hurt equally. 42.4% respondents believe the rich are hurt the most while 40.2% believe it is the poor who are hurt the most. Politically, it is hurtful for the PM to let this perception continue, the heavy hand of the state should fall disproportionately on the ill-gotten riches of the corrupt and not the poor.

The contrast couldn't be more striking when you look at the difference in opinion of urban, semi-urban and rural respondents.

The contrast couldn't be more striking when you look at the difference in opinion of urban, semi-urban and rural respondents. While almost 47% urban Indians say the rich are being hurt, this figure drops to 40% in semi-urban and then sinks to 29% among rural Indians. Clearly, the countryside is feeling that at the moment the poor are suffering more than the rich. The government is losing the narrative among rural Indians, purely due to the day-to-day suffering caused by the lack of operating cash.

While a big number still supports the government's mid-way move to tax the cash hoarders big time, every third respondent, or 33% of the common people on the street, feel cheated for having endured the inconveniences of demonetisation due to this move. The government can take solace that a solid 62% do not feel so and are standing beside Modi sarkar in this battle against black money, but it takes only one in three angry Indians to push this narrative upside down. People are waiting for some "big ticket" offenders to get behind the bars.

Ajay Verma / Reuters

Demonetisation should not be seen as a mere economic or financial exercise. The poor of India strongly associate with causes of social justice. For significant sections of society, it was a lifelong dream to see the un-tied/unaccountable local moneybags squirm in misery. People associate this move with almost quasi-divine status and therein lies the political opportunity and challenge for PM Modi. But what if the day-to-day problem of absence of cash continues beyond 50 days? Here lies the biggest question and worry for the government as well.

While 52% Indians say they will continue to support demonetisation even if their day-to-day problems continue beyond the 50-day period, an equally huge number -- 48% -- is unsure about it. Compare this 52% with the current support of 86% who are happy to support it and you will know why we consider we are at a crossroads.

In other words, the support for demonetisation will crash land from the current high of 86% to a probable low of 52%, if the problems are not sorted out within 50 days. You can also read the data the other way round. If even after 50 days, the problems continue to exist, then the number of people upset with the government might shoot up from the current paltry 14% to massive 48% within the next three weeks.

Demonetisation should not be seen as a mere economic or financial exercise. The poor of India strongly associate with causes of social justice.

A large part of public support for demonetisation is because the man on the street and his own political cadre believe in Modi. The fact that the prime minister's heart seems to be in the right place on demonetisation is beyond argument for a huge number of the electorate. To cement this reputation, the prime minister and the BJP should come out with concrete confidence-building measures.

Almost 86% in the tracker say there should be no roll-back. This underlines the support for the cause. So massive is the support for the cause and goodwill of the PM that almost 57% say the country's economy will weaken for a period of time due to demonetisation, but it will be beneficial in the long run. Add the 23% who say the country's economy is benefiting at the present and will be benefited in the future as well, and you get a total of a massive 90% Indians who are optimistic about the future at large.

This massive optimism or hope for future is what is keeping people patient and stand in lines quietly even when the Supreme Court feared "riots" due to demonetisation. This remarkable patience of the people is based on two things. First: unparalleled optimism for future. Second: unparalleled faith in the ability of PM Modi to take a decision for a better future. This could easily be the make-or-break moment not just for Modi, but also for a billion Indians.

READ: One Delhi Trader Sold ₹100 cr Worth Gold In Just 4 Hours, Right After PM's Demonetisation Announcement

Against all odds, the good news of the government is that people are reporting the cash-stress going down over the last three weeks. While almost 28% have hit the panic button saying their problems related to demonetisation have remained intact or become worse over the last four weeks, there is also a soothing 57% Indians reporting that the initial problems have started to lessen over this period. The number of such people is higher in urban areas than in rural areas. Clearly, the government has a concrete task in its hands to bring down this number of absolute panic. For every one Indian who says there is no problem at all (14% to be precise) there are two Indians who say there are huge problems (28% to be precise) due to demonetisation.

Last but not the least, the ultimate test of the cash crisis remains the time spent in banks or ATM queues to get cash. We have been tracking this question not just for the days right after the demonetisation, but also for the time spent as on today.

While in the very first week, about 9% confirmed spending half a day, 11% said they spent entire day and 6% said "more than a day" to get cash from banks/ATMs, this totalled to almost 26% Indians reporting gruelling "day lost just to get some cash", another 26% said they just dropped the idea of queuing up anywhere looking at the number over the counters.

Indians expect their PM to deliver on his "50 days to normalisation" promise. They are supporting him against all odds.

This number looked like getting down to 9% in the second week reporting gruelling "day lost just to get some cash". But in second week a massive 47% just dropped the idea of queuing up. So the total number of cash strapped Indians remained 55% plus, who either spent the entire day or just could not even get into the queue. But the latest data could give a huge sigh of relief to the government as only about 2% confirmed spending half a day, 3% said they spent an entire day, while another 2% said "more than a day" to get cash from banks/ATMs. This totalled to only about 7% Indians reporting gruelling "day lost just to get some cash" as compared to 26% just three weeks back.

In other words, while three weeks back only about 11% said it took them less than an hour at the bank, as of today this number has shot up to 37% respondents saying the same. This number shoots up to 48% when we asked how much they expect to spend after about a month from now. Only 3% Indians fear they might still spend "almost a day" in bank to get their cash. So a lot will depend on how quickly the lines get "normalised". Indians expect their PM to deliver on his "50 days to normalisation" promise. They are supporting him against all odds. Optimism is superseding practicality at the moment. So would be pessimism if the promises are broken.

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