Saturday, January 7, 2017

Demonetisation For Good Governance By 3I- 2P

             3I:Intention-Idea-Initiative        2P:Policy And Political Economy
          Demonetisation is the talk of town since 8th November, 2016. On this day, Indian Prime Minister (PM) banned 500 and 1000 notes. Now time is ripe to evaluate the success and failure, positives and negatives of this risky and tricky decision. The question before us, Is Demonetisation a successful exercise? A simple answer is 'Yes'.
          With affirmative answer, question comes, how and why? The answer of how is visible. There is no public unrest except few minor protests due to administrative mismanagement by banking sector and sponsored by opposition. Instead, public supported the Note-ban step, taking it as fight against corruption.
           Citizens are hopeful to get some good fruits out of this. They are also knowing that it is one step among many serial actions to curb corruption. Government officials hinted at different points of time that many more steps are in queue. This is to meet the promises made on reducing corruption and giving Good Governance (GG). People are expecting implementation of  Benami Act as next step. It is a good example to prove the point regarding serial actions against corruption.
          Now, we need to find answer why public is supporting this move even if it is creating hardships for them. For pubic actors and their decisions, intentions behind the issues and their overall image, matters the most. Demonetisation is intended- as it appears to the public- to curb corruption  by reducing Black Money(BM) for bettering the quality of citizen's life.
          The Government of India (GoI) has taken many steps to reduce corruption. The first step was constitution of an SIT headed by a retired Supreme Court judge. As the second step- a law was passed in 2015 for disclosure of foreign BM. The third step is-agreements were signed with many countries for sharing banking information. The fourth step is- strict law came into force for benami transactions in 2016 by amending it to make it more relevant, stringent and effective. The fifth is- the introduction of a scheme for declaring BM after paying a heavy penalty. And many more invisible steps are being taken.
        In above series of actions to clean economy, Demonetisation is a part of a well chalk out plan to kill corruption. It is well intended to help accelerate the process of  development and GG.  The intention behind the Note-ban has backward and forward linkages.
          Backward linkages are promises made in election campaigns and steps taken to fulfil them. Forward linkages are steps coming one after another- expecting next in the chain is strict implementation of Benami Property act as is indicated on many occasions. Hence, there is no scope for creating any confusion for anyone. This is the reason that all efforts aimed at to oppose Note-ban proved fiasco. Public is supporting this good looking and promising  intentions of the move to dig out BM to make Indian economy strong.
          Loosely united opposition tried to get some political mileage out of this. But CM Bihar and Orrisa weaken it by supporting Demonetisation. Opposition could not prove verbal blames by documentary proof. So, scattered opposition could not arouse necessary sentiments due to well intention of the move. Albeit appealing and attractive intention brought support to this step.
          Mismanagement, while implementing the decision, was a good catch in the hand of opposition to corner the GoI. But by hitting the move as wrong doing and blaming leaking of information to some selected, weakened opposition to a greater extent. If they would have supported the move and opposed  administrative failure, then public might have given some support. But here too, opposition failed strategically.

The immediate few negatives associated with the move are: One; the economy would lose momentum. Two; it will hit the drive of new job generation. Three; business related demands would reduced widely. Four; money shortage at a particular point of time for a particular act would curtail the opportunity and adversely affect the income and growth of the masses. All above has lead to latest reducing trend of GDP.
The immediate few positives are: One; J&K sees 60% dip in terrorism-related violence. Two; Havala operaions are down 50%. Three; Two main Pakistani presses engaged in printing counterfeit Indian courrency have been forced to shut shop. Four; Northeastern insurgent groups are finding it difficult to procure arms and ammunition from across the border.
Our leaders have many innovative ideas. But, they do not initiate them due to different reasons. So, intentions could not convert into a reality and die as utopian ideas. PM Modi mustered the required courage and took step - highly risky initiative of Note-ban. The good intention behind Note-ban initiative helped the process to normalise the situation in stipulated time of 50 days.
          This move of Demonetisation is relatively a novel idea. Demonetisations were tried in the past but not on such a big scale. This idea involved  and jolted almost every citizen directly or indirectly and proved it a hit move.
          Indians have firm belief that BM is the root cause of many problems.  They understand that demonetisation move would reduce public problems in the long run. This belief brought huge public support to this step. To understand it, we can compare it with 'Labor Pain.'
          Corruption is hitting hard our citizen round the clock in different forms- visible or invisible, directly or indirectly. Pubic know BM and corruptions are two sides of a coin. Hitting one means hitting others. Reducing  and cleaning BM from economy will lead to minimize corruption.
          Demonetisation impacted all of us in different ways. This shows the range and reach of the issue. It is a social as well as political product. PM is marketing it as a social product for convincing the masses that he is doing it to minimise their pains and attack internal BM generation.
          BM is the mother of all corrupt transactions. Corruption would reduce if BM is minimised from our economy. As a result, it would help and accelerate Good Governance(GG) and improve citizen's life.
          GG is a social product. All like and love it's benefits. Everyone desires to embrace GG for going up and acquiring prosperity. It is perceived that finally Demonetisation would fetch GG to all of us. This idea is being sold by GoI as social products to citizens.
          This is a potent political product from the angel of political marketing and management technique. Widespread reach of Demonetisation generated a huge awareness among pubic about BM and corruption.  Citizens dislike and hate corruption, so the BM. Our public actors have assessed this angle of the move to catch mandate of masses by showcasing themselves  as fighters against corruption.
          Demonetisation matter is associated with morale and values of society. Who is doing it? What are his credentials? What is hidden agenda behind it? What is its backward and forward linkages? Evaluating in these contexts, GoI is not a looser but rather a gainer.  The total sum is a beneficial political product with good political economy for GoI.
          Note-ban forced the masses to learn about social evils- BM and corruption. Now, Indians are more aware than before about these issues. Corruption is a massive hurdle in the path of progress. 
          Every crisis creates an opportunity. The forward looking positive approach of Indian citizen is converting crisis, suddenly generated by Demonetisation, into an opportunity. Digital India and Make in India programs are contributing the conversion process- from crisis to opportunity.
          Pubic is now more empowered to break the brake in the path of progress. Certainly, it will push governance towards GG. That in turn will improve citizen's life. The expected positive hope is compelling masses to bear with hardships to support the move for better and brighter future. We can compare whole situation with 'Labor Pain' to understand and visualize the move completely.

Heera Lal (  A research scholar, Views are personal based on research)


  1. Demo. Was a good step but lack of g.g. & visionary policy ruined it.

  2. Demo. Was a good step but lack of g.g. & visionary policy ruined it.