Black money and political alienation

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Small traders and businessmen are not big fans of the demonetisation drive and its incoveniences. Does the BJP government not care to placate their core support base or is it expecting some political consolidation in its fight against graft?

Right after Prime Minister Narendra Modi’s address to the nation, where he announced the demonetisation of currency notes of denominations Rs.500 and Rs.1,000, a BJP office-bearer received a phone call from a friend and supporter, who happened to be a small-time trader. “I picked up the phone,” he told this writer, “and as is my practice, said, ‘ Jai shri Ram ’ in greeting. He retorted “what jai shri Ram ? Tumne toh hamarajai jai shri ramkar diya , (you have ruined us, what Jai Shri Ram are you chanting?).” Small traders and dealers, for long the warriors of the cash-only economy, have been hit hard by the decision to demonetise, they also form the core support base of the BJP and have been so for the longest time.

This, therefore, raises questions over the political merits of the decision, after all, General Elections are only two-and-a-half years away and Assembly polls in Uttar Pradesh and Gujarat, where this community is particularly aligned with the BJP is up next year.

The political wages of the Greater Common Good

The most charitable explanation for the decision taken by Mr. Modi, risking the alienation of his party’s core support base, could be his determination to root out black money and corruption. The most cynical one (after all we are in Delhi, the home of the imperial court) could be that it is an effort to stymie the cash-only operation that the electoral machines of various regional parties are, in view of the upcoming Assembly polls. As in all things with Mr. Modi, the truth is to be parsed between the lines, or possibly in some other dimension.

His own political playbook has given plenty of instances of such seemingly unpopular acts, aimed a “greater common good” involving the common man’s investment in good fiscal or governance behaviour. The power reforms that he initiated in Gujarat — the Jyotigram Yojana, in 2006, where arrears from farmers were strictly extracted and a 24-hour three-phase grid for domestic and field consumption of power were separated — is cited by those close to Mr. Modi as a classic example of measures that are indeed tough and feared to be unpopular but pulled off by Mr. Modi with some élan. The scheme saw protests, but also large public participation. In a political atmosphere that mandated that Indian farmers did not want to pay for power supply, it proved otherwise.

The supply of 24-hour power through a domestic grid to rural households saw the shifting of smaller diamond-cutting businesses to move to the countryside. The scheme was commended by the Stockholm International Water Institute (SIWI) for having radically improved lives in rural areas. That campaign and the investment of then Chief Minister Modi’s personality in a campaign for a governance issue directly led to him being identified with issues of governance and development, as someone who could take supposedly unpopular decisions for the greater common good. His campaign slogan for the 2007 polls was “Jeetega Gujarat” or Gujarat will triumph, a complete identification between him and the State.

BJP leaders say that the Prime Minister had warned them at the party’s national executive meet, held in June this year in Allahabad, that he would not spare anyone who didn’t declare black money. “Wagging an accusing finger at us, he said ‘ main kisi ko chhodne wala nahin hoon, kah do sabko ki September 30 thtak declaration de dein [I won’t spare anyone; tell everyone to declare black money under the Income Declaration Scheme by September 30 th] ’,” said a senior office-bearer who was present at the meeting.

If Prime Minister Modi pulls this off, then the alienation of a small section of his party’s support base, traders and dealers, may not matter after all.

These actions point to a strategy for political consolidation that moves beyond just segments of the population and a politics that is very much campaign-oriented. A campaign mode of politics allows wider participation of people, and is different from the public policy build-up followed by the previous regime via the National Advisory Council (NAC). The NAC was consultative in nature, and drew activists from various fields into the legislative process, and could be construed as a meritocracy of sorts. It did, however, spin off two centres of authority and looked distant and unaccountable at the same time.

Prime Minister Modi’s moves on the other hand has a heavy investment of his personality, and looks all embracing in the execution of its plans. An example of such campaign-based politics was the “Shastri Vrat” that former Prime Minister Lal Bahadur Shastri launched when there was a shortage of food in the country. He asked Indians to give up one meal, in a similar address to the nation, over the radio. The response to that appeal was overwhelming. The current government is attempting a similar ‘ samvad ’ or conversation with the people — a campaign that would unite a large swathe of people and avoids the pitfalls of segmentary politics.

The personal appeal from the Prime Minister in the name of fighting black money and terror financing is an attempt to resist being labelled and boxed into one section of support, and seek out new ground. BJP maintains that its jump from roughly 18.8% in 2009 to 31% in 2014 — from 116 seats then to 282 seats now — has been the result of large-number voters, not the traditional BJP supporters who voted Mr. Modi into Prime-Ministership. It is also admitted that the near-100% strike-rate that the party saw in several States like Rajasthan, Chhattisgarh and Madhya Pradesh may not be repeated in 2019. The solution is to build a bigger plank, inspired by more than just parochial loyalties.

The speed and efficiency with which the process of replacement of notes takes place (and we have heard of banks running out of cash by noon the first day of the replacement process) will decide which way this gamble will go. The satisfaction that virtuous fiscal behaviour brings will have to outweigh the inconvenience of standing in line for hours for getting your tax-deducted money re-routed back into you pocket. Fighting black money is all very well, but not if the banks give you the short shrift while you attempt to raise money for groceries. If Prime Minister Modi pulls this off, then the alienation of a small section of his party’s support base, traders and dealers, may not matter after all.

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