Through the Looking-Glass

The Readers’ Editor writes: With demonetisation, Indian press shows what journalism ought to be

The press captured in great detail the suffering of millions after the surprise move and the government’s shifting goal posts.

The demonetisation of Rs 500 and Rs 1000 currency notes announced on November 8 last year was easily the most controversial economic policy decision taken in India in two decades. As India marks the first anniversary of the note ban on Wednesday, expect a stream of analysis pieces on the decision and its impact in the past year (disclosure: I have contributed mine to The Tribune).

Useful as it is to look at the economic, social and political fallout of demonetisation and where we stand today, it is equally interesting to look at the press coverage of this major event. Some relevant questions are: How did the media report on the demonetisation exercise? What, in retrospect, did it get right and what did it get wrong? What are the missing pieces?

Demonetisation 2016 evoked strong opinions in private and public conversations and this was reflected in the intense media coverage in the weeks and months that followed the move.

Growing in strength

There was an evolution in the depth of media reporting and analysis after the announcement on November 8. In the first couple of days, the press – print, TV and online – struggled to get on top of demonetisation. This was not surprising because no event of this scale had till then taken place in India or elsewhere in the world. The previous instances of demonetisation in India, in 1946 and 1978, were minor as compared to the 2016 move, where 86% of the currency in circulation was invalidated overnight.

This was also the time when the government had just pulled off the surgical strikes across the Line of Control on September 29, 2016, which received near-unanimous praise in the media. So in the afterglow of this success, demonetisation too was initially seen positively by the press and many journalists described this as one more “surgical strike” – this time against corruption and black money. In one of the more absurd examples of the jubilant coverage at the time, some mainstream media outlets such as Zee and social media accounts went to town with talk that each new currency note contained a GPS tracking chip that could help detect its use in the fight against black money. This piece of news was not sourced to any government official, but who cared?

Within days, however, two rich strands of media coverage developed, at least, in the English language media. One was the reporting of the many aspects of demonetisation 2016 and its fall-out. The other was the analysis in the opinion pages.

No one, from any walk of life, had been spared the impact of Demonetisation 2016 and this was extensively reported in the media. People struggled to manage without cash, small and large establishments hit by a liquidity crunch, patients seeking medical help at private hospitals being made to suffer because they did not have valid notes to make payments, farmers resorting to barter arrangements, women with abusive husbands finding themselves robbed of their safety nets when much of their cash savings had turned useless, and many more issues.

The media coverage was especially rich with regard to job losses and delayed wage payments in the informal sector. There was also no geographical area left uncovered. From the periphery in Kashmir in the North to Nagaland in the East, to the rural hinterland in central India, reporters went everywhere. (A small sample of the coverage can be seen here, here, here and here.)

Then, there was the reporting on the scarcity of cash in the economy and the serpentine lines in front of banks and ATMs. The most disturbing reports were on the deaths of people who died in line while waiting for hours to draw money that was theirs.

Sometimes, words were not necessary to describe people’s difficulties. A striking photograph that appeared in Hindustan Times (buried inside though) of an elderly man crying after waiting in line for hours to get money at the bank conveyed the message clearly and was widely shared.

Another strand was the reporting of how the Reserve Bank of India was changing its regulations day after day. Yet another was India’s experience with making digital payments which had became the new purported objective of Demonetisation 2016 in the days after the move was implemented. The press reported in some detail about how people were managing (or having trouble managing) with unfamiliar forms of transactions in a country with low literacy rates and patchy internet connectivity.

All in all, looking at the coverage the first two-three months after Demonetisation 2016, I would say that this was one of the better episodes in the recent history of the English language press in India. There was a hunger for news and the media satiated it. Reporters were out in the field digging up all manner of experiences of men, women and children. Caught off guard in the initial days, the press quickly recovered to do the job it was supposed to do.

Keeping at it

Scroll.in was one of those publications that went the extra mile in its reporting and analysis, with its sustained coverage of demonetisation for months. The good stories are too many to mention here. A sample of its coverage can be seen here, here and here.

There was a difference in the spread of coverage between the general newspapers and the business press. The business newspapers tended to be more careful in their reporting, tuned as they are to uncritically welcoming any measure that they think looks like reform. But they too did not hold back their punches, such as in carrying out surveys of how small business was affected or in pointing out the frequency of changes in RBI regulations.

The opinion pages of the papers – both the general and financial dailies – saw a more divided set of views, as should be the case. The financial papers by and large had more op-eds justifying demonetisation, while the general mainstream newspapers put out more critical pieces. On the whole, the critical op-eds seemed more convincing. There was some analysis, but not much, about the motivation for demonetisation and the politics behind it. Reflecting the closed nature of the Bharataiya Janata Party and the Narendra Modi Government, this analysis tended to be more of speculation.

The most intense coverage was seen in November-December 2016, the first two months after demonetisation. Then as cash returned to the system and as the deadline for returning old notes passed, the reporting and the analysis tapered off.

But it never died out.

Revisiting demonetisation

In keeping with the enormity of the decision on demonetisation and the negative impact it had on people, there were many occasions on which the press revisited the event.

First there were the surprising GDP numbers announced in March, for the third quarter of financial year 2016-’17. which showed that Demonetisation 2016 had no impact on growth in October-December 2016. This brought out a small number of commentators saying “I told you so”. Then there were the eruption of farmer protests in central and western India in April and May, which again were linked to the collapse of prices and markets because of the shortage of cash and forced digitalisation. In end August, the futility of demonetisation as an instrument to destroy black money became apparent when the RBI announced that 98.6% of the demonetised currency had returned to the banking system.

The same week, new GDP numbers showed that growth had plunged in the first quarter (April-June) of 2017-’18 indicating that the full impact of demonetisation was yet to play itself out. This led to another burst of intense reporting and analysis of what much of the media finally seemed to agree was an unravelling of Demonetisation 2016. Scroll.in used the occasion to run a series aptly titled Revisiting Demonetisation.

The story continues. Both the fallout of demonetisation 2016 and the government’s ever-changing justification are regularly reported on and analysed in the press, usually more critically than in approval. The disruption caused by the hurried implementation of the Goods and Services Tax that came on top of the lingering effect of demonetisation has further complicated the story.

Yet, there is one thing that continues to be missing in the reporting and the analysis. If indeed demonetisation has had such a negative impact on the lives of people, why is it that they never came out on the streets or punished the ruling party at the Centre when elections were held to various states in February and March, most of which were won by the BJP?

The early signs were in the statements made by people who were interviewed by journalists as they stood in lines through much of November. The reigning sentiment was: “It has caused us problems but this is all for the good if black money is rooted out” or “The rich too are paying for it; it is not just the poor who are suffering” and the like. There was the rare piece of interesting analysis in this regard but no concrete follow up.

Yet, a year later, the citizen still seems to give the government the benefit of doubt. Why? In one of my earlier columns I had pointed out this gap in our understanding of the public response to demonetisation and suggested that this was an important area for Scroll.in to take up in its next round of reporting. However, the media in general has skirted this subject, preferring sometimes to dismiss it as a case of the poor deriving pleasure from the troubles of the rich, a sort of Schadenfreude. I think there is something more there that we have not tried to comprehend.

This is an important but small gap in what I still think was an example of a time when the Indian press (as usual with some exceptions) stepped up to the plate. For once, they did not swallow official handouts and were rightly sceptical of grand claims. This was what journalism was supposed to be.

The Readers’ Editor can be contacted at readerseditor@scroll.in

We welcome your comments at letters@scroll.in.
Sponsored Content BY 

Behind the garb of wealth and success, white collar criminals are hiding in plain sight

Understanding the forces that motivate leaders to become fraudsters.

Most con artists are very easy to like; the ones that belong to the corporate society, even more so. The Jordan Belforts of the world are confident, sharp and can smooth-talk their way into convincing people to bend at their will. For years, Harshad Mehta, a practiced con-artist, employed all-of-the-above to earn the sobriquet “big bull” on Dalaal Street. In 1992, the stockbroker used the pump and dump technique, explained later, to falsely inflate the Sensex from 1,194 points to 4,467. It was only after the scam that journalist Sucheta Dalal, acting on a tip-off, broke the story exposing how he fraudulently dipped into the banking system to finance a boom that manipulated the stock market.

Play

In her book ‘The confidence game’, Maria Konnikova observes that con artists are expert storytellers - “When a story is plausible, we often assume it’s true.” Harshad Mehta’s story was an endearing rags-to-riches tale in which an insurance agent turned stockbroker flourished based on his skill and knowledge of the market. For years, he gave hope to marketmen that they too could one day live in a 15,000 sq.ft. posh apartment with a swimming pool in upmarket Worli.

One such marketman was Ketan Parekh who took over Dalaal Street after the arrest of Harshad Mehta. Ketan Parekh kept a low profile and broke character only to celebrate milestones such as reaching Rs. 100 crore in net worth, for which he threw a lavish bash with a star-studded guest-list to show off his wealth and connections. Ketan Parekh, a trainee in Harshad Mehta’s company, used the same infamous pump-and-dump scheme to make his riches. In that, he first used false bank documents to buy high stakes in shares that would inflate the stock prices of certain companies. The rise in stock prices lured in other institutional investors, further increasing the price of the stock. Once the price was high, Ketan dumped these stocks making huge profits and causing the stock market to take a tumble since it was propped up on misleading share prices. Ketan Parekh was later implicated in the 2001 securities scam and is serving a 14-years SEBI ban. The tactics employed by Harshad Mehta and Ketan Parekh were similar, in that they found a loophole in the system and took advantage of it to accumulate an obscene amount of wealth.

Play

Call it greed, addiction or smarts, the 1992 and 2001 Securities Scams, for the first time, revealed the magnitude of white collar crimes in India. To fill the gaps exposed through these scams, the Securities Laws Act 1995 widened SEBI’s jurisdiction and allowed it to regulate depositories, FIIs, venture capital funds and credit-rating agencies. SEBI further received greater autonomy to penalise capital market violations with a fine of Rs 10 lakhs.

Despite an empowered regulatory body, the next white-collar crime struck India’s capital market with a massive blow. In a confession letter, Ramalinga Raju, ex-chairman of Satyam Computers convicted of criminal conspiracy and financial fraud, disclosed that Satyam’s balance sheets were cooked up to show an excess of revenues amounting to Rs. 7,000 crore. This accounting fraud allowed the chairman to keep the share prices of the company high. The deception, once revealed to unsuspecting board members and shareholders, made the company’s stock prices crash, with the investors losing as much as Rs. 14,000 crores. The crash of India’s fourth largest software services company is often likened to the bankruptcy of Enron - both companies achieved dizzying heights but collapsed to the ground taking their shareholders with them. Ramalinga Raju wrote in his letter “it was like riding a tiger, not knowing how to get off without being eaten”, implying that even after the realisation of consequences of the crime, it was impossible for him to rectify it.

It is theorised that white-collar crimes like these are highly rationalised. The motivation for the crime can be linked to the strain theory developed by Robert K Merton who stated that society puts pressure on individuals to achieve socially accepted goals (the importance of money, social status etc.). Not having the means to achieve those goals leads individuals to commit crimes.

Take the case of the executive who spent nine years in McKinsey as managing director and thereafter on the corporate and non-profit boards of Goldman Sachs, Procter & Gamble, American Airlines, and Harvard Business School. Rajat Gupta was a figure of success. Furthermore, his commitment to philanthropy added an additional layer of credibility to his image. He created the American India Foundation which brought in millions of dollars in philanthropic contributions from NRIs to development programs across the country. Rajat Gupta’s descent started during the investigation on Raj Rajaratnam, a Sri-Lankan hedge fund manager accused of insider trading. Convicted for leaking confidential information about Warren Buffet’s sizeable investment plans for Goldman Sachs to Raj Rajaratnam, Rajat Gupta was found guilty of conspiracy and three counts of securities fraud. Safe to say, Mr. Gupta’s philanthropic work did not sway the jury.

Play

The people discussed above have one thing in common - each one of them was well respected and celebrated for their industry prowess and social standing, but got sucked down a path of non-violent crime. The question remains - Why are individuals at successful positions willing to risk it all? The book Why They Do It: Inside the mind of the White-Collar Criminal based on a research by Eugene Soltes reveals a startling insight. Soltes spoke to fifty white collar criminals to understand their motivations behind the crimes. Like most of us, Soltes expected the workings of a calculated and greedy mind behind the crimes, something that could separate them from regular people. However, the results were surprisingly unnerving. According to the research, most of the executives who committed crimes made decisions the way we all do–on the basis of their intuitions and gut feelings. They often didn’t realise the consequences of their action and got caught in the flow of making more money.

Play

The arena of white collar crimes is full of commanding players with large and complex personalities. Billions, starring Damien Lewis and Paul Giamatti, captures the undercurrents of Wall Street and delivers a high-octane ‘ruthless attorney vs wealthy kingpin’ drama. The show looks at the fine line between success and fraud in the stock market. Bobby Axelrod, the hedge fund kingpin, skilfully walks on this fine line like a tightrope walker, making it difficult for Chuck Rhoades, a US attorney, to build a case against him.

If financial drama is your thing, then block your weekend for Billions. You can catch it on Hotstar Premium, a platform that offers a wide collection of popular and Emmy-winning shows such as Game of Thrones, Modern Family and This Is Us, in addition to live sports coverage, and movies. To subscribe, click here.

This article was produced by the Scroll marketing team on behalf of Hotstar and not by the Scroll editorial team.