The Public Reaction to India’s Currency Demonetization: A Deeper Dive into Support and Apathy
India’s demonetization decision by Prime Minister Narendra Modi in 2016 aimed to curb black money and control corruption. The policy involved the withdrawal of Rs 500 and 1000 denomination currency notes. This article delves into the public reaction, tracing the narrative from initial support to eventual apathy and resignation.
Total and Complete Support
The announcement was met with widespread enthusiasm. The public felt it was a proudest moment in Indian history, believing it would revolutionize the country by wiping out black money, reducing corruption, and promoting financial inclusion.
Experts agreed that the move could expand the tax base immensely. According to some estimates, it could lead to a 65% tax base by 2020. Most people were optimistic and willingly scrapped their old notes for new ones, even standing in long queues for days at ATMs, believing in the righteousness of the policy.
The Public's Theories and Realities
While many believed in the efficacy of the measure, others had their own theories. Some imagined Mukesh Ambani converting black money to white due to his alliance with Reliance Jio. Others speculated that the new notes might have nanochips, a notion that was quickly debunked by financial experts.
Initial Support and Delayed Realization
Initially, the public was extremely supportive of the government’s move. However, as the realization set in, various challenges surfaced. The policy was meant to eliminate black money, but it failed to do so. Instead, the system became the largest bank in the world overnight as people rushed to banks to exchange old notes and deposit new ones.
Corruption and the Aftermath
Despite the expectation that demonetization would curb corruption, the reality was quite different. Although it did create a short-term panic and forced some criminals to deposit their ill-gained wealth, it did not last. Authorities, including law enforcement, quickly converted their black money into white. Some bankers also profited from the situation, earning hefty commissions.
Economic and Social Impact
The move had a significant economic and social impact. The cashless environment led to an expansion of the digital payment ecosystem, with platforms like Gpay and PhonePe gaining significant traction. However, the sudden shift was accompanied by inconvenience and disruption, particularly for those who were not tech-savvy or who did not have access to ATMs and digital payment systems in the early days.
Public Memory and Accountability
Over time, the public began to forget the hardships they faced. The initial support transformed into resignation as they adapted to the new digital landscape. This transformation was marked by a desire to move on from the immediate inconvenience.
Democratic Accountability: Past and Present
India's democratic principles were put to the test during this period. Traditionally, mistakes in governance led to shifts in political power. Indira Gandhi’s 1977 loss was a direct result of a mistake during the Emergency. Similarly, both Jayalalithaa and Moraji Desai saw their political fortunes rise and fall based on their governance styles.
However, modern-day democracy in India, as well as in other countries like the USA, UK, India, and Japan, seems to be increasingly impervious to public dissatisfaction. Despite inflicting significant damage on the public, these governments continue to win votes due to a divided, impotent, or even apathetic voter base.
Conclusion
The demonetization policy of 2016 was a mixed bag of success and failure. While it did have a noteworthy impact on the economy and digital payments, it did not significantly curb corruption. This case underscores the importance of accountability in a democracy. If Prime Minister Modi had faced real challenges for his mishandling, policymakers would likely have been more cautious in implementing future policies.