What Will We Get Out Of It?

As India stands IN queues outside banks and post offices, Narendra Modi’s demonetisation debate is perhaps, the biggest debate in a long time. And rightly so. Because most people are asking the question that is pertinent. “What will we as Indians and the country get back from this economic move? ”There is little doubt in my mind that Modi has made a very bold move. For a Prime Minister with a comfortable majority of 282 seats and no threat to his government for his full term - there is no denying that history will judge Narendra Modi. And it could be very critical of him. Just as V.P. Singh is remembered for Mandalisation of Indian politics and P.V. Narasimha Rao for the 1991 liberalisation, as well as his alleged inaction in the 1992 demolition of the Babri Masjid. Even if we look at the clichéd India versus Bharat debate, let’s see who expects what. First, India - because Modi was a hugely popular leader of the middle class in 2014 leading up to a historic mandate. It is the same middle class that has now stood in queues. Will it eventually get lower interest rates from cash rich banks? Or will it bear the brunt of what is largely being anticipated as recessionary times for at least a year or more? Will it be more jobless than ever before or can it look at greater employment avenues? Sectors like real estate are all set to be badly hit, but they also generate a lot of employment in urban and semi-urban India. Will lower interest rates do something cleaner and better to sectors like these, so that employment avenues don’t get dramatically reduced?

There is no doubt in my mind that sectors such as these, which provided a big space for absorption of black money, particularly in land deals, have to clean up in the long term. Much before Modi’s move, I had, in my columns, written about the new real estate Bill and also debated the need for a clean-up and regularisation of this sector in my shows. The clean-up will hopefully, not happen at the big cost of taking away employment from it.

It will provide greater fiscal prudence and the middle class agenda of inflation will be addressed. Inflation was the issue Modi used effectively to hit at the Congress-led UPA in his 2014 campaign. His campaign slogans were of ‘acche din’ and the key element of that was inflation and corruption.

Often when a government’s own economics fails, it blames the international economy, which is also true because we now live in a global economy and the markets cannot be delinked. So, could our futuristic model be such that we be minimally affected by what is happening in the world as we move closer to a cashless economy? These are a few of the many questions that will need detailed answers and perhaps, a vision plan.

Now let’s look at Bharat. Bharat still makes for 68 per cent of the rural workforce in India. How will their life change? Having reported and written extensively on rural India and farmers, I wonder if this farmer, who dies in distress, will escape the clutches of the local lender, the ‘sahookaar’, through the Jan Dhan Yojna and cash less moves. The government benefits don’t reach farmers fully. Will farming now be an easier economic option for them, with more of their own legitimate money in hand and not those borrowed at exorbitant rates of interest from a local sahookaar?

Contrary to the charges of the Opposition, political calculation and the Uttar Pradesh elections were not the sole motivation for this move, because it will impact every aspect of people’s lives in this country. It will especially impact those like me, who have never backed any kind of black economy.