Vinod Mubayi and Raza Mir


Narendra Modi’s recent acknowledgement that the aim of demonetization is to usher in a “cashless society” is a tacit admission of the fact that the goal is to greatly expand the fledgling financial product industry of credit cards, e-wallets, paytms and more and thus divert more resources from the pockets of the great masses of the poor to add to the fortunes of those atop this sector. For example, in every transaction of Re. 100, the aam aadmi will now have to lose Re. 2.50 or so paid as “transaction” fees to those who issue the plastic cards or their electronic equivalents. Considering that almost 90% of transactions in the Indian economy were carried out in cash, converting even a fraction to cashless forms is guaranteed to generate a bonanza for current and future cronies of Modi who stand to prosper from his risky diktat even as the masses suffer and the economy itself declines in the interim. This upward redistribution of resources, while shedding crocodile tears for the state of the poor, is the hallmark of Modi’s economic policies.


It is evident now that the original reason advanced for demonetization, dealing a death blow to black money, was just another jumla, on the lines of Modi’s earlier promise to give Re. 15 lakhs to every Indian by seizing the famed Swiss bank accounts of dishonest Indians. In fact, the best way to understand Modi’s actions is to ask cui bono? (who benefits). The Gujarat model of Modi basically involved gifting the state’s resources, mainly land, water, and the environment, to enrich the likes of Adani and Ambani who were allowed to set up polluting industries with weak controls in environmentally sensitive areas. And, no doubt, the Adanis of this world repaid Modi and his political machine generously as demonstrated by the election budget of the BJP in the 2014 national election – it was 7 times larger than its nearest competitor.


While demonetization was undoubtedly undertaken with multiple objectives in mind, the huge risks of the maneuver have been demonstrated by the many conflicting and contradictory directives issued in the last 40-odd days by different authorities like the Ministry of Finance and the Reserve Bank. It is apparent that the bureaucrats in-charge of implementation have little idea themselves of what the policy is or what it is designed to achieve. However, despite the enormous dislocation in the lives of millions of people, Modi himself seems to escaped unscathed and unblamed, at least so far, the consequences of his actions.


Meanwhile, the malaise at the heart of Indian society, hyper-nationalism and hyper-patriotism, seems to have spread to other institutions. In recent years, India’s Supreme Court was known more for its encouragement of public interest litigation and its judgments on protecting the environment. This same institution in an embarrassing display of jingoism has now made it mandatory for the national anthem to be played at the end of each film show in every cinema and for the entire audience to stand while the national flag is displayed on the screen. This demarche on the part of India’s highest judicial body is on par with the bellicose rhetoric of surgical strikes of the current political establishment.

Top - Home