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A fortnight after Prime Minister Narendra Modi’s 8 November announcement of the invalidation of all old high-denomination currency notes, I wrote that the prime minister seemed to have banked on his personal equity to convince people about the demonetisation exercise.
The results of the assembly elections in India’s most populous state, many experts said, would serve as a referendum on demonetisation; I believed so too, albeit with the usual caveats about Uttar Pradesh’s unique caste dynamics (expertly exploited by the Bharatiya Janata Party during the Lok Sabha elections in 2014 when it won 71 seats from the state and 42.3% of the vote).
Election results showed the BJP has won 312 of the 403 assembly seats in Uttar Pradesh. If the election were a referendum on demonetisation, the people have answered.
Demonetisation wasn’t one of those radical reforms that, while hugely significant, do not affect the lives of most people, at least, not directly. It affects everyone—as the vegetable vendor who scrambled to get on to the Paytm platform, the daily wage labourer who struggled to split a Rs2,000 denomination currency note, and the salaryman who spent six hours in a bank queue can all confirm.
The long-term impact of the move is still unclear. As Mint’s Niranjan Rajadhyaksha wrote in a column in November: “The real puzzle is what this means in the long run. Much depends on whether this exogenous shock alters citizen behaviour—in terms of whether less cash will be used in the future, whether the tax base will expand as more transactions are done through the formal financial system and if other policy measures restrict the creation of fresh black money.” That analysis hasn’t changed in the months since.
Yet, the move has popular support. The BJP’s performance in Uttar Pradesh proves that beyond doubt.
As a digression, I am hoping the prime minister can reboot his Swachh Bharat (Clean India) campaign and give it the same sort of momentum. It started well, but seems to be floundering, and while it is no doubt encouraging to see posts on social media about remote villages becoming “open defecation free”, it is depressing to see residents of neighbouring slums defecating openly opposite two high-rise buildings in South Delhi that house officers of the Indian Administrative Service and Indian Police Service. I’m hoping none of those officials is involved in the Swachh Bharat campaign.
But what is it about Modi that has resulted in this groundswell of support for demonetisation? There are two possible explanations. One, as his critics (and there are many) claim, he is a demagogue who preys on fears and prejudice, not logic, to get his message across. Two, as his supporters (again, there are many), insist, he is a visionary who has captured the imagination of a young country with a younger population. I belong in neither camp—journalists are expected to be equal opportunity offenders—but would like to think that he is a man who is trying to get a tough job done. In an interview with Mint in November, General Electric Co. chairman Jeff Immelt described Prime Minister Narendra Modi as “hardworking and honest” and said: “It is not up to me to judge policies. But, if you look at somebody that is forceful, hardworking, honest and transparent, I would say sign me up.” I believe that is an accurate description of Modi.
Modi is an astute man, which means he knows his ability to sell radical changes to the people of the country. The Uttar Pradesh election results are proof that this belief isn’t misplaced. It is up to him to pick the right kind of policies and campaigns to sell. It is also up to him to listen to the right kind of people—those with expertise and experience. The problems facing India are complex ones and are rendered more so by the size of the economy ($2 trillion is not to be sniffed at) and its rate of growth. The solutions (and their implementation) are likely to be as complex.
It is a rare man who has the ability to shape the narrative. Modi has proved that he is that man. What he does with that power is entirely up to him.