The propaganda of currency patriotism

The NSA and armed forces must be looking askance at demonetisation—and currency-patriotism: a propaganda weapon that has clearly shot its load


There was even a much-publicized claim that the new Rs500 and Rs2,000 notes are impossible to counterfeit. Photo: Reuters
There was even a much-publicized claim that the new Rs500 and Rs2,000 notes are impossible to counterfeit. Photo: Reuters

What’s with the so-called demonetisation and consequent claims of reduced protests and militant—even terrorist—activity?

The past fortnight has been full of pro-government, ultra-nationalist fervour from several constituents and fans of the National Democratic Alliance (NDA) government about the Kashmir Valley returning to normal for the first time in several months. According to them, this is directly linked to the enforced absence of old Rs500 and Rs1,000 notes and counterfeit notes of those values manufactured in Pakistan and transported across the border. There was even a much-publicized claim that the new Rs500 and Rs2,000 notes are impossible to counterfeit.

This led to the assumption that militant and Pakistan surrogates in Jammu & Kashmir were paid to incite stone-throwing at security forces. And, that children and youngsters with eyes blinded by pellets and bodies marked with pellets and beatings were in effect paid to be hurt and, in several cases, ruin their lives.

Assume all this is true. But to think a political play to curb black money will end protests and militancy in Kashmir is hallucinatory. Only a government and its fans in absolute denial or in the throes of self-congratulatory stupor would actually believe it. Because it also means, logically, that in the absence of long-term plans to actually lessen the incidence of black money, a peace plan for Jammu & Kashmir, a plan to severely contain Pakistan by military and diplomatic pressure—and get rid of Pakistan’s Hogwarts-educated counterfeiters with the morally upright force of India’s Hogwarts-educated currency designers—protests and militancy in Kashmir will resume as soon as money supply builds up.

This applies to all rebellions and militant movements across India, from the Maoist rebellion to those in north-east India in outright rebellion or uneasy ceasefire with government, and to radical Islamists who can, frankly, operate in most parts of India.

It is no secret that all rebel groups maintain reserves of currency. Any organization working offline, with a parallel revenue stream that feeds off the regular economy, will have a stash. It accrues in a variety of ways. Maoists take a cut from local infrastructure projects and other business like mining and transportation, and especially contractors who work in the forests that such rebels in central and southern India call sanctuary.

Rebel organizations in northeastern India do all this and more: money from tea gardens, truckers, frankly any business in their areas of influence (they fight over revenue areas as much as stated ideologies). If in Manipur they raise demand notes, in Nagaland they have a rate list. Employees even pay a part of their salary to whichever Naga rebel group—even the ones in ceasefire!—can pull its armed weight.

Such funds are used to feed, clothe, arm, train and pay cadres; the bad apples, and they are legion in eastern India and northeastern India, even siphon off such funds. This is vastly visible in northeast India. You have only to see the houses of rebel leaders or those of their relatives, track their business ventures, track how some live—or have lived—overseas.

But this currency, for use on the ground, as it were, and stashed, isn’t infinite, and follows a cycle of accrual and spending. Even assuming vast sums are now effectively defunct on account of demonetisation, vast sums will gradually accrue as soon as reintroduced currency begins to filter into the system—the legitimate system—before it begins its inevitable journey to the offline economy. This is as true for rebel economies as it is for the regular corrupted economy.

The prime minister cracking a joke about refunds being in new currency notes at a Coldplay concert in Mumbai, and quoting Vietnam-era lyrics by American legend and freshly minted Nobel laureate Bob Dylan may help optics. But real solutions to conflict will emerge with outreach, visible and transparent steps to such solutions—the same as working credible economic policy, overhauling taxation, and seriously working to snag capital flight; let alone deliver on outrageous campaign promises to bring back from abroad Rs15 lakh for every Indian, money that took wing under the successive tenures of centre-left and centre-right governments.

India’s national security advisor, its intelligence apparatus and the armed forces structure are well-versed in psy-ops, the psychological operations so critical in conflict management—its creation, sustenance, reduction and cessation. But even they must be looking askance at demonetisation—and currency-patriotism: a propaganda weapon that has clearly shot its load.

Sudeep Chakravarti’s books include Clear.Hold.Build: Hard Lessons of Business and Human Rights in India, Red Sun: Travels in Naxalite Country and Highway 39: Journeys through a Fractured Land. This column, which focuses on conflict situations and the convergence of businesses and human rights in India and South Asia, runs on Thursdays.

Respond to this column at rootcause@livemint.com

READ MORE