The litany of problems for the Indian government in the aftermath of Prime Minister Narendra Modi’s sudden decision to scrap 86 per cent of India’s legal tender seems to be compounding by the day, with a protracted standoff in parliament and a planned nationwide protest on Monday being the latest developments.
Yet, on closer scrutiny, the chaos and vocal public protests come across as manifestations of the lack of meticulous planning and inept execution of the so-called demonetisation of 500 and 1,000 rupee notes, rather than signs of fundamental problems with the policy itself. Despite the unprecedented queues at banks across the country, there have been few incidents of violence that is so typical of such large mass mobilisation in India. Modi mostly seems to have got the support or the benefit of doubt from the industry, financial institutions and a significant section of the public on his avowed battle against corruption and unaccounted piles of cash, or ‘black money’ in Indian parlance.
But the same cannot be said of the manner in which this disruptive economic policy is being thrust upon the Indian public, which has now assumed the contours of a national emergency. Millions of frustrated people continue to line up for elusive currency notes every day and dozens of them have died as a direct result of the cash shortage. From hospital beds to wedding pavilions, stories of misery and misfortune are pouring in every day. Modi’s repeated assertions, including one yesterday, about the necessary secrecy of such a decision, is understandable, but in a nation where 98 per cent of all consumer payments are made in cash, the logistics of such a massive disruption should have been planned in a rigorous and foolproof manner.
Caught in various stages of unpreparedness, the government must now uphold accountability for the logistical nightmare and provide immediate relief, especially to the poorest sections of the society who neither have access to banks nor plastic money. It must adopt pragmatic steps to reduce people’s sufferings, such as exceptions for medical emergencies in private hospitals and deploying extra personnel to ensure all cash vending machines are refitted. This decision must be followed up with sustained action to improve the common man’s pathway to a digital economy. Modi must also address the opposition’s grievances to avoid further political escalation of an economic policy shift. Otherwise, if it indeed takes another six months for the situation to normalise, then the government’s declared zeal to battle corruption will only be remembered for public fury and crippling India’s economic growth.