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Charge of the Believer Brigade

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The original promise of demonetisation has evaporated. We didn’t deserve to be hit by a 1,100-volt shock just to switch to digital payments

The Narendra Modi government’s ongoing confusions take us right back to a story from an earlier epoch in independent India.

Much before Santa and Banta came on the scene there was a Baldev Singh, with “Sardar” always prefixed to his name just as “Giani” was to Zail Singh’s. You have to tell this story with trepidation in these judicially-mandated humourless times, and I do not even have the licence of a Khushwant Singh, who never ran out of yarns involving Sardar Baldev Singh and Nehru, the Santa-Banta of the Sixties.

Baldev Singh (1902-61), a renowned freedom fighter and India’s first defence minister, was thrown headlong in the post-partition mess, managing the violent migration and the war in Kashmir and by all accounts, was brilliant. But it didn’t stop Khushwant Singh from telling us this one with delight: apparently, Sardar Baldev Singh had been so pre-occupied, he visited his mother in Ropar (now Rupnagar) for the first time, months after he had become defence minister. “Everybody asks me what use is your becoming a big minister,” taunted the mother, “After the angrez left there is such a paucity of coins, everybody is harassed. Can my minister son do something about it?”

The defence minister returned to Delhi, chastened. He set himself the task of resolving the small-change problem. He would collect his salary, reimbursements in coins and scrounged to save as many as possible. Once he had built a hoard of these, maybe a trunk-load or two, he proudly sent it to his mother back home. By money order, of course.

It’s such a pity Khushwant is not with us, or it would have been much more fun to hear him compare the first defence minister’s predicament with coins with the Modi government’s over black money. The horde of demonetised currency is like all the change collected in Sardar Baldev Singh’s trunks. To now pretend that all of it, dishonouring of 86 per cent of a sovereign nation’s entire currency, something no democracy has ever done before, was all about pushing people into digital payments is not at all as funny as the trunk-loads of coins sent home to mom by money order. As an irrationality, it is serious, in fact. Except, the joke is on all of us.

The suddenness with which the demonetisation discourse had been turned on its head, from dirty to digital cash is a tribute to the prime minister’s incredibly persuasive communication skills and his magisterial control over public opinion. It’s now all about digital payments. This mass shifting of public discourse was marked with the finance minister announcing a menu card of service tax cuts and straight discounts on digital payments for the most important goods and services sold exclusively by the government or the public sector, such as railways, NHAI tolls and petrol pumps.

Two important questions arise from this: one, digitisation of payments is great. But if this is all you wanted, where was the need to give the entire economy this 1,100-volt demonetisation jolt? You could just have rolled out your incentives and discounts, even weaving in a tiny income tax discount on all payments made digitally. And second is the question of moral hazard. At this point, no more than 2.5-3 per cent of our population actively uses debit or credit cards. Another few per cent might use e-wallets. In any case, this 4-6 crore would form the top economic, banked layer of a 130 crore population. You are getting the public sector, or ultimately the poorest taxpayer to reward the better off for a privilege (of plastic economy) that they already enjoy over the vast, financially excluded majority.

A more imaginative approach would have needed harder thinking. But it’s tough to think hard in these breathless times. The Ministry of Defence announced last week (on the exact day INS Betwa, a 3,800-ton frigate, toppled over in dry dock at Mazgaon) that the Raksha Mantri was spending the following day at a workshop to teach his department heads about digital economy. My favourite, and most memorable so far, is the Information Technology Minister, travelling in Telangana, finding Gangaiah, who runs a puncture repair shop, accepting Paytm, and sharing this with the world in general, and a cabinet colleague from that region in the greatest excitement–on Twitter. The idea that destruction of at least two quarters of growth, harassment of tens of crores, diminishing of a great institution like the RBI was only about convincing us silly Indians what Barbie Girl has been saying for years but got no attention: life in plastic, is fantastic. Not just in Barbie World, but in the real one too.

On the evening the prime minister announced this bold step, we were excited. Our imagination was fired by this decisive style. We presumed he had done his home-work, got all the data about black wealth in cash, printed enough new notes and war-gamed the consequences. In those stirring hours we had also presumed intelligence agencies and monetary experts had evidence of a sizeable counterfeit element in our floating currency. The idea of a surgical strike is heady, and trendy. At least immediately. That’s where many of us erred.

It is now clear that we (this columnist included) were mistaken. Inured to the leaky Lutyens we were blown over by how successfully the government had kept this secret. Now we know the secret was so well kept that the government also kept itself in the dark. If you don’t bring up something for discussion in the Cabinet, or its apex, select committees, CCEA or CCPA, if you tell them of your decision within minutes from your announcement, you are ambushing not just the black-money crooks but, unfortunately yourselves. The notion that sharing it with cabinet members for discussion could have led to leaks is tricky. Why do we administer them oath of office and secrecy? Why the cabinet system and collective responsibility? You don’t even trust the top 10, or even four (CCS) ministers in your cabinet? Who will you consult, brainstorm with, take into confidence before going to war?

To be fair, there is still wide-spread admiration for the prime minister’s bold decision-making, ironically by the lower-middle and poor class majority or, let’s say, the queuing masses. A month later, they are bemused, but still awed by the arrival of a leader so decisive, so non-risk averse after decades of status quoists. They still believe there must be a sound reason why he led them into this currency war, and that there will be a reward for the risk soon enough. That reward, surely, couldn’t just be a move to digital payments, especially if it brings discounts to the creamy, automobile-owning upper crust, at petrol pumps and toll plazas. Starting out to kill black money, and ending up plugging Paytm, isn’t as funny as sending coins home by money order, but is equally too clever by half.

Postscript: History, however, tells us that even disastrous recklessness can end up in reward if packaged in a guts-and-glory story. Earl of Cardigan, who notoriously led the Charge of The Light Brigade in the Crimean War, was celebrated, rewarded and promoted. It was a bold cavalry charge immortalised for its valour by poet Tennyson and as a great military folly by Norman Dixon, who wrote the classic ‘On The Psychology of Military Incompetence’. French Marshal Pierre Bosquet famously said of it: “c’est magnifique, mais ce n’est pas la guerre, c’est de la folie” (it is magnificent, but it’s not war, it’s madness). Dixon, though, acknowledges that the systematic glorification of that man-made military disaster was so successful that it continued to inspire British cavalry until World War I and the great massacres of Somme and Flanders.

This article was originally published on 9 December, 2016.

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3 COMMENTS

  1. Wah! Well written. So funny and so true. As you rightly said, alas, the joke is on us.
    ” As an irrationality, it is serious, in fact. Except, the joke is on all of us.”

    Your intellectual honesty is appreciated in that you admitted your earlier mistake. In the early days of DeMo, just like you many of us presumed that there was indeed some logic to the madness. In the end, it became all too clear – there was none!

    I had a good laugh at this part –
    “Starting out to kill black money, and ending up plugging Paytm, isn’t as funny as sending coins home by money order, but is equally too clever by half.”

  2. ShekharJi: It is a sad commentary that people even now trust Modi who fooled them, than great “Opinion Makers” like you.

    Is it not time for you guys to INTROSPECT an act which you guys liberally advise to politicians.

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