Who Wants Demonetization: The Politics of Governance Through Surgical Strikes

Anshul Trivedi is a research scholar at Jawaharlal Nehru University, New Delhi.

Anshul Trivedi
Anshul Trivedi

In 2014, the PM Narendra Modi,  came to power promising the electorate to check corruption, putting an end to the policy paralysis and ensuring “development” by putting the economy back on track. Mr. Modi fashioned himself as the “vikas purush” who was all about development and “good governance” which would ensure growth. While on the economic front, things have been sluggish, to say the least; the promise to tackle black money and corruption was much awaited.

On November 8th, PM Modi took the drastic decision to220px-500_inr_obs_lr demonetize “high denomination” currency at a short notice of a few hours. This move led to the withdrawal of 85% of the currency in circulation in one go; leading to an induced decline in purchasing power which would have an overall adverse effect on the economy for two quarters. It is not as if demonetization hasn’t been adopted by governments before, with little success, it must be added. However, such a move, with enormous logistical consequences, at such short notice, is unprecedented.

Does Demonetization Qualify as Good Governance?

The UN definition of good governance lists out the following features of the term: participation, transparency, rule of law, responsiveness, consensus oriented, equity and inclusiveness, effectiveness, efficiency and accountability. Demonetization fails on all these counts.

The decision has caused immense hardship to the ordinary folk by bringing economic activity to a grinding halt. Government has estimated 50 days for a return to normalcy, although other estimates indicate that a longer period would be required. On last count, 50+ demonetization related deaths have been reported. The decision has impacted small businesses and the informal sector – which accounts for 80% of the employment and 45% of the GDP – the most; with reports of daily wage labourers being forced to skip meals due to non-payment of wages and lack of work. Add to that the increasing law and order problems across the country, recalibrating new ATMs etc. has led to a logistical nightmare for billions of common people; leading the Supreme Court to observe that the hara-kiri caused by the move could lead to a riot-like situation, if not set right at the earliest.

While it is true that any macro change causes some inconvenience as it shakes up the systemic inertia; there is a consensus evolving among the economists across the ideological spectrum from the Left to Right that the costs of demonetization far outweigh its benefits. Then was this a prudent decision; or did political considerations trump economic and governance considerations?

From Good Governance to “Governance through Surgical Strikes”

While paying lip service to the slogan of good governance, Mr. Modi, prefers to govern by surgical strikes; which it seems are meant more for public consumption and less for long term structural transformation. Public deliberation, one of the hallmarks of Indian democracy, has been replaced by absolute personalization of decision-making; so much so that many ministries and institutions seem redundant in this regime. The announcement of demonetization which could have been made by the RBI Governor was made by the Prime Minister himself, emphasizing its personalized and political nature. The decision was veiled in secrecy and even cabinet members, reportedly, had little idea about such an important decision. Moreover, this secrecy was presented as a positive to the media, which readily lapped it up.

For Mr. Modi, fighting corruption and black money, it seems, is not a matter of establishing strong and transparent institutions to guard against these ills. He prefers to fight it by publicized and personalised surgical strikes even though they may have little systemic impact in the long run.

Such an approach is not restricted to the economy but runs through the entire Modi regime. Whether it was PM Modi’s abrupt meeting with Mr. Nawaz Sharif ending Pakistan’s diplomatic isolation post 26/11 to the unprecedentedly publicized surgical strikes post the Uri attacks to this abrupt move to demonetize currency; there seems to be no consistent rationale or long term vision guiding these actions or statements, except reinforcing the personal authority and projection of strength on the part Mr. Modi. What is worse is that the bug seems to have caught on to the other cabinet ministers with Defence Minister Parrikar giving callous remarks on India’s “no first use” doctrine regarding nuclear weapons; when apparently this government has made securing a seat at the Nuclear Suppliers Group a priority!

The principle of collective decision making and integrity of institutions and public deliberation under a democratic setup – which act as checks and balances in the system – has been supplanted by faith in the wisdom of Mr. Modi and his coterie; and the public must fall in line or risk being labeled unpatriotic or now corrupt.

Demonetization – The Vicarious Revolution of the Elite

How can Good Governance and centralization of authority go together? The answer might lie in the social base of those who share this idiom of politics. Aijaz Ahmad in one of his essays on Hindutva, poses the question, “Can fascism be built within a liberal democratic framework?” The provisional answer to that, unfortunately it seems, is yes. What we are witnessing is the rise of hegemonic right across the world; which does not disavow democracy but uses it to undermine and erode those very structures – from Trump to Erdogan to Modi.

In India, the ideological base of such an assertion is found in the elite, urban, Hindu middle and upwardly mobile classes while not being restricted to them. If one were to unpack the ideological content of the term – Good governance – one would find its resonance with the urban elite’s version of squalor free politics inherent in the idea. The world of the urban, Hindu elite whose precarious upward mobility has been secured by prosperity built on the back of a post liberalization boom in the technical and service sector and who are products of a highly technocratic and uncritical system of pedagogy want to ensure and safeguard the boom in their consumption and affluence at all costs.

This increasingly politically assertive, homogenized cultural mass has little patience for democratic articulations of cultural difference – religious or based on caste – or demands of redistributive justice by the poor. That is why a redistributive program like the MGNREGA or AAP’s subsidies on water and electricity would be called out for its inefficiency, corruption, bad governance or simply appeasement of the poor; but the “surgical strike” on black money – which has cost 50+ lives and makes no economic sense at all – is the best move in the history of politics or loan waivers of billionaires an incentive for growth.

While Mayawati and Lalu – the leaders of the excluded – would be denigrated and slighted; the unrooted and unrepresentative politicians like Subramaniam Swamy or Arun Jaitley would find backers among these folks for they speak their language. Moreover, they will find ready echo chambers in the mainstream English media with studio demagogues like Arnab Goswami reinforcing their worldview from studios in metros claiming to be the voice of the nation.

This elite bloc or mass stripped off all particularities except the identity of consumer or tax payer then uses “Nationalism” to draw ideological sustenance and coherence for its project of accumulation and dominance. Its ideological symbols are no longer oppressed caste leaders or social reformers/workers or those who fought British colonialism like in the past; but the Army, the corporate honcho, the self-made cricketer or the actor – all free of particular identities. Their “other” or enemy won’t be the exploitative businessmen or dominant castes who perpetrate atrocities but poor students termed parasites for getting “subsidized” education on “their” taxes and still not falling in line; or human rights, environmental activists or anti-land grab activists for hindering the prospects of growth of the “nation”.

In the era inaugurated by the financial crisis and the resultant global recession leading to a sluggish economy; this elite bloc/mass requires a strong and decisive leader who ensures accumulation, therefore, is openly pro-big business and uses the language of Nationalism – where minorities are projected as the constant other – to sweep claims of poverty, inequality, difference and oppression under the carpet. One who can firmly deal with this “democratic squalor”; a politician who does not invoke the language of redistribution, recognition or right but of duty and a vaguely defined national interest; the apotheosis of that is of course – Mr. Narendra Modi. The identification of this bloc with their leader and their leader with the nation and its interest is total and indisputable.

For long the Indian, Hindu elite have toyed with the idea of dictatorship setting India straight during idle conversations. It is among this bloc that we can locate the support for Mr. Modi’s style of governance through surgical strikes and policies like demonetization. The tendencies towards authoritarianism and unprecedented centralization of power are passed off as decisive leadership and initiative in this narrative.

Manufacturing Consent in the Post-Truth World

So what happened to Modi’s signature slogan of good governance?

In a world where interpersonal connection is the highest in human history ironically we are living in times when social polarization is so massive that making sense of the world is becoming increasingly difficult. That is why pollsters across the world are having a hard time gauging the public mood; from the decimation of Congress in 2014 to AAP’s Delhi landslide to Mahagathbandhan’s Bihar sweep to Trump’s upset – the media did not have a whiff of what was going on.

The polarization of opinion on Demonetization is similar. The Indian Elites are just not ready to believe that this “surgical strike” is causing immense strife to the working people who are completely absent from the mainstream narrative anyhow. For them this monumental governance disaster is a minor inconvenience to be borne with a grin for the greater good.

In the post-truth world, controlling the narrative is often considered more important than producing demonstrable results. Mr. Modi is a master narrator and the elites haven’t been that affected by the cash crunch. Those affected by demonetization don’t have a voice in the mainstream media. Hence, deaths and chaos due to demonetization has been called a “minor inconvenience” and not be painted as a “breakdown of governance” but the odd-even scheme or worker strikes are painted as such.

The absence of public deliberation and a lack of consistent rationale guiding such massive policy decisions of the government, and their endorsement by the elite, are disconcerting signs for any democratic culture. While the Left tries to debate whether the present conjuncture is authoritarian or fascist; an admixture of both is unfolding in front of our eyes but with the backing of a vocal hegemonic public within a liberal framework. Maybe these terms – fascist or authoritarian – will derive closure only in retrospect; but in the present, the opposition seems woefully ineffective in countering the Leader.

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