LESSON

http://www.deccanchronicle.com/…/note-ban-the-art-of-buildi…
OPINION, OP ED

PRADEEP S MEHTA AND AMOL KULKARNIThe writers work for CUTS International

Note ban & the art of building narratives

Published Dec 5, 2016, 1:00 am ISTUpdated Dec 5, 2016, 6:43 am IST

Emotions are increasingly becoming important in politics. The economy
is gradually being replaced by “emotonomy” in the global political
discourse. Unsurprisingly, our country is no outlier to this shift. The
banning of high-value currency notes has predominantly been an
emotional plank, having real economic consequences, only bad, in the
short as well as long term, on diverse stakeholder groups.Modi suddenly
took out more than 80 per cent of the currency in circulation on
November 8. The move appears to have struck an
emotional chord with the public, which was ready to bear “short-term”
inconvenience in the hope of long-term benefits. The poor chuckled at
the notion of the rich being taken to task. However, when the
“short-term” slowly started to border on the medium and, perhaps, long
term, Modi pundits spurred into action and started working
towards building a parallel narrative. Consequently, what started as a
measure to curb black money is being quickly and intelligently turned
into a campaign to promote digital money.

Let us revisit the initial days of this drive. One of the predominant
questions at the beginning of the demonetisation debate was how would
this move prevent generation of black money in the future, given the
immediate issue of fresh notes of Rs 2,000 and re-issuance of Rs 500
notes. This and similar doubts would have died their natural death had
the generation of new notes met their demand if the pain had been short
lived, and the public would have gone back to its usual ways of
functioning. However, the inconvenience continued for much longer than
initially expected, and it still continues. Even after working overtime,
government printing presses have been unable to print an adequate
number of currency notes, or replenish bank branches and ATM outlets
quickly and efficiently. One wonders why Modi does not look for overseas
suppliers as it does whenever there is a domestic shortage of anything.

As a result, concerns of collateral damage such as unemployment and
underemployment specially for daily wage earners; lack of access to
medicare, severe damage to the informal economy, including small and
medium enterprises, farmers, construction labourers, migrants and the
like, emerged. This resulted in the poor wondering if the pain was worth
it. To counter such growing negative narratives, Modi started adopting
a digital payments agenda and promoting its benefits of greater
transparency, accountability and formalising of businesses.

It publicised its already launched initiatives of Jan Dhan Yojana,
RuPay cards and avenues offered to go digital. In effect, the
government is increasingly emphasising that demonetisation is not an
exercise to curb the supply of money in the economy, but a nudge to
shift from cash payments to digital payments.

Latching on the agenda of a cashless society and showcasing the
efforts which the government has been making to promote has resulted in
two primary outcomes. First, it takes away the burden on Modi to meet
the increasing demand for paper currency, and thus hiding the poor
planning and inefficiency in the execution of the
demonetisation exercise. Second, it shifts the responsibility of pain
to the poor and informal workers to informal businesses, merchants and
the like who have been reluctant to shift to the formal economy due to
fear of being subject to the tax net and increase in regulatory
compliance cost. Blame has also been shifted to financial sector service
providers who have been unable to lure the poor to shift to digital
payments.

In this background, the government has been arguing
that this “shock” to the economy was necessary for long-term benefits.
The perceived inconvenience will last till the time industry and market
players remain reluctant to shift to the formal economy. Modi has
argued that long-term benefits of this exercise would be greater
transparency, enhanced tax base, access to formal finance, and the
like. This strategy of taking control of the political discourse by a
sudden announcement, thereby building a narrative and shifting
responsibility has not been a first. Modi did a similar
thing when it declared carrying out a surgical strike on select
Pakistani outposts, avenging the terror attacks at Uri and Pathankot,
and neutralising potential terrorists. Overnight, nationalist emotions
were aroused and questions of “what went wrong” and “how to prevent repetition” were swept under the carpet.

Unsurprisingly, a comprehensive security review and corrective
measures were absent, which left scope for terrorist attacks. The
recent attack in Nagrota is a case in point. It will not be surprising
if black money comes back to haunt governments of the future,
requiring well-planned concrete multi-pronged measures, beginning with
greater transparency and accountability in funding of political
parties and elections. Already, there are reports of public servants
being caught with huge bribes in new currency and black money hoarders
using creative ways to hide their wealth or converting the same to
white. The relentless push to digital payments has heightened concerns
with respect to misuse of personal information, consumer protection and
increasing barriers to access formal financial services.

It will
also not be surprising if Modi comes up with another issue to take
control of the political discourse once the debate around

demonetisation starts becoming boring and the focus begins to shift to
real issues like jobs, agriculture, poverty, health and education, by
building a narrative and striking another emotional chord with the
public.
—
Peace Is Doable