India seems to be going through one of its biggest churning since Independence. So, it isn't surprising that the past week has been an emotional roller coaster as well -- we are hopeful and fearful, excited and irate, gleeful and frustrated, all at the same time.
Prime Minister Narendra Modi's announcement that ₹500 and ₹1,000 currency notes would be demonetised in order to rid the country of black money was widely welcomed. Over the next few days, the euphoria slipped a few rungs when it became apparent that the government was woefully under-prepared to handle the aftermath of putting 86 percent of India's cash supply out of circulation in one fell swoop.
Arguments have been made, both for and against demonetisation as a policy to combat black money. But the sheer audacity of the move, which seems to come from a place of conviction, has left many marvelling. Others are dismayed by its shockingly shoddy execution. People have stood in queues outside banks and ATMs, sometimes for fours days straight. Lives have been lost, and livelihoods are on the verge of being lost.
But there is no denying the glee felt by millions. Glee over the imagined discomfiture of those who cheated the system over and over again with impunity, and at least some of whom might finally get their comeuppance. And riding on that sense of justice being done, Modi could win his biggest political gamble yet. Here are nine pieces that dissect demonenisation and its aftermath.
They don't know what they are doing
In the Hindustan Times, Sushil Aaron writes that the Modi government is attempting to paper over the suffering and distress that people are experiencing by invoking the spirit of sacrifice, and the BJP is assuming that the "satisfaction over the misery of the rich" will be enough to tide them over this exercise. But he warns that India's communities are not capable of coping with such experiments, even if temporary.
"The Modi government is confident that it has infused this project with so much of moral meaning that people will forget their misery, come January," he writes. "The real danger for the BJP is that its model of managing the narrative and influencing public opinion is likely to breakdown during this crisis....It is the first time that the people's everyday experience is, in significant measure, in conflict with Delhi's self-assured narrative. "
The BJP seems to have, however, not fully absorbed what it has unleashed. It has effective put on hold an entire society's means of exchange...
A moral act
In the Hindustan Times, Manu Joseph writes that even though the elderly die in queues, and restaurants and malls bleed financially, people will not punish Modi for the distress. The government has managed to communicate "widely and deeply" that this a "moral act." "It may have been disastrous because of how the parties are perceived by the people. Modi, for now, has the charm to get away with many reforms that other politicians and parties cannot," he writes.
Joseph writes that it may not be apparent at first glance, but Modi has already won the "calculated gamble" of demonetisation, even though the rewards are unclear so far. "It is rare for people to have an accommodating view of a sudden policy that only has long-term benefits, especially one that has hurt them. But there is observable evidence that the general public is with Modi on this," he writes.
We must use this man to get some difficult things done.
Artificially created distress
In The Hindu, Utsa Patnaik writes that the government's inadequate preparation has imposed a severe monetary contraction, taken away people's purchasing power, and caused distress which is worsening with time. "A prior large increase of lower denomination notes should have been ensured through banks and ATMs, so that overall money supply did not reduce and a normal level of activity could be maintained," she writes.
Noting that black money is not hoarded in sackful of notes but is a circulation of unrecorded and undeclared incomes, Patnaik writes that economically disenfranchising the nation was unnecessary. "The majority of farmers are net purchasers of food, and rural labourers and artisans are entirely dependent on purchase from the market. They are in the greatest distress..."
There is nothing to prevent the government from continuing to investigate or raid suspected tax evaders.
Looking Back, Not Ahead
In Quint, Parikshit Ghosh cites academic research to argue that cash circulation, especially in large denomination bank notes, does contribute to black money. He also points out that this exercise of demonetisation is like hitting a "reset button," which looks back but not ahead.
"It may catch or eliminate some of the black money created in the past, but it does nothing to prevent the accumulation of black money in the future, the way a reduction of large denomination bills or more stringent tracking of transactions via PAN numbers might do," he writes.
There is little doubt that there are bigger, juicier and relatively low hanging fruit it is not reaching for.
Modi is the man
In The Telegraph, Swapan Dasgupta writes that this exercise shows that Modi's authority in the BJP and his government is "total and unchallenged." It should also give pause to those who have viewed him as "an incrementalist, not a radical." "Modi has not only emerged as a leader towering above the pack, he has set in motion a political churning. It is likely that the 2019 general election will end up as a referendum on the man," he writes.
Dasgupta also points out that by unsettling traders, BJP's core support base, Modi had taken a "monumental political gamble," triggered a "social upheaval" in the party and reached out to a new support base.
Whether the BJP is able to enlarge and redefine its social base as a consequence will be worth watching.
Cash Is Everything
On the NDTV website, P. Sainath writes that nobody has any cash in Chikalthana village in Maharashtra. "The 'Modi masterstroke', a term contrived by assorted anchors and other clowns on television to hail an unbelievably stupid action, is spreading agony and misery in its wake across the countryside. If there's been any stroke, it's the one the heart of the rural economy has suffered."
"The recovery time from the stroke was first dismissed by the finance minister and his party colleagues as 2-3 days of discomfort. Dr. Jaitley then modified that to 2-3 weeks. Soon after, his senior surgeon, Narendra Modi, said he needed 50 days to restore the patient to health. So we're already into 2017 with this course of treatment. Meanwhile, we do not know how many people across the country have died waiting in queues, but their number mounts daily," he writes.
If there's been any stroke, it's the one the heart of the rural economy has suffered.
Middle Class Morality Trumps Economic Logic
In Scroll, Sanjay Srivastava writes that the "great event" may not be the last word on black money since cash accounts for just about 6 percent of undisclosed income recovered in income tax raids. But the "moral project" around demonetisation "has little to do with economic logic."
"The Great Event is not just financial in nature. It gives vent to a new project within which the middle-classes seek to define their morality as a class. Accusations of obsessive consumerism, lack of interest in public and collective life and abandonment of even the pretense of the idea of distributive justice can now be countered through economic jingoism," he writes.
It gives vent to a new project within which the middle-classes seek to define their morality as a class.
In HuffPost India, Somak Ghoshal writes that demonetisation had brought out the worst forms of elitism among the privileged classes, and in the end it is the poor who end up paying for the bad karma of the rich.
"While the upper crust of the middle income groups wait for their seafood lunch after clicking a few buttons on their smartphones, thousands are being turned away by roadside eateries and neighbourhood groceries in spite of having money on them. It is this latter group that is stranded without public transport because of their inability to pay with the cash they may have on them, as their employers complain on social media while driving around in air-conditioned cars and taxis," he writes.
The obvious casualties of any war are usually the poor and disenfranchised.
Old Notes For New
In The Indian Express, former Finance Minister P. Chidambaram writes that the Modi government's exercise cannot be termed demonetisation, but rather as "old notes for new." "The reality is the old notes will be replaced by new notes. Hence, the true test will be the answer to the question 'what proportion of the old notes will be tendered for replacement'? It is only the notes that are not tendered that will be 'demonetised' in the true sense of the word," he writes.
Chidambaram estimates that the cost of replacing the old with new notes, including the printing costs, would be ₹15,000 to ₹20,000 crore, and wonders whether the whole exercise would be worth it.
How will the government's objectives be met if new and higher denomination series of notes (Rs 2,000) are introduced?
Split Media Personality
In The Indian Express, Shailaja Bajpai writes about the "divided" media coverage in which evening debates applaud demonetisation, while daytime reporting is all about the queues. She underlines the need to "separate fact from fiction and feelings."
"The mainstream American media missed the woods for the trees in the US presidential election, allowing its own self-fulfilling prophesies to cloud journalistic judgement. Hope we avoid a similar fate when the spectre of kala dhan faces off against public distress," she writes.
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