Demonetisation may ruin India economically, but not Modi's image
"The black economy will be crippled", "we'll become a cashless society", "we will be able to exert more control on counterfeit currency", et al.
These are all balls that were tossed whose trajectory will become apparent once they land. However, a pertinent question to ask is: What will PM Narendra Modi reap from this drive? What have been his motivations to cause such a major disruption in the life of so many people?
I want to look at what he gains personally and discount all the touted national benefits, because a politician uses his country in the same fashion as a priest uses religion - to get his way with people. Any benefit to public at large is purely unintentional and coincidental.
The first and obvious benefit of demonetisation for Modi is political. It comes with a binary.
First, the election results in UP and Punjab. Modi has struck a deathly blow to the wealth of his opponents, and by safeguarding his own (obviously), he has gained a huge logistical advantage over them. Come election season, this will work in BJP's advantage.
The second political advantage is that he has hijacked the poll agenda. These elections will now be fought for or against demonetisation as the central issue. If in a battle you dictate your opponent's strategy, they are fighting on your terms.
Another important advantage that goes in Modi's favour is consolidation of his own power. Though already towering above others, it will further strengthen his support base.
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| Modi, like all good autocrats, is mindful of his place in history. (Photo: PTI) |
To explain this, all leaders who declare a war, an emergency, civil unrest, are doing just one thing: They are sowing chaos. Chaos, though a high-risk strategy, often works like a charm for powerful leaders.
In these uncertain times, when expectations are low, the poor naturally gravitate towards a leader who they perceive as strong. Someone who can help them sail through tough times. He is their anchor of hope.
So the ostensible lack of preparation on currency printing and rollout, policy flip-flops, furtive income tax laws, random raids are all concerted efforts to stir chaos.
The rampant rumours of other such "surgical strikes" to follow, and how gold, real estate will also be targeted are all aimed at fueling fear in the society.
Irrespective of this demonetisation’s economic outcome, its suspect merit, or the deceleration it will cause to Indian economy, the current chaos can help PM Modi take extreme steps in the near future. Critics, however, will keep crying foul and PM will keep usurping the collective mindscape.
Furthermore, Modi, like all good autocrats, is mindful of his place in history. He knows he's playing to future galleries.
Demonetisation, thus, is his signature move, much like Indira Gandhi's bank nationalisation, and will now forever be mentioned with his name stamped on it.
India will now be referred to as before and after currency demonetisation. This future agenda setting should be a huge high for his personality.
So overall, PM Modi has outmanoeuvred his political rivals, baptised his faithfuls and ghostscripted his own legacy.
Well played, sir.
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