It is now clear – 1,020 days after Prime Minister Narendra Modi told India he was wiping out 85% of its currency, by value – that demonetisation was not just a failure but a spectacularly misconceived move.
That its destructive effects took at least 100 lives in its immediate aftermath, destroyed the incomes of millions, shuttered countless small-scale enterprises and shook the edifices of the largest companies was anecdotally obvious, aside from likely leading to a 45-year high in unemployment. This week, quoting a government report – probably suppressed for what it inadvertently disclosed – journalist Puja Mehra revealed that investments after the big D dropped Rs 4.25 lakh crore, down 60% over the previous year; falling, as a proportion of gross domestic product, from 10.5% to 2.7% over seven years.
Let’s first put some perspective to the Rs 4.25 lakh crore India lost in investments in the financial year 2016-’17: that is more than the amount India will spend this year on roads, railways, metro transit, education, the space programme and housing. It is more than the defence budget for this year – or enough to buy more than 250 Rafale jets (at their original 2014 price; France is now offering a 25% discount) and replace all those 44-year-old jets, as the air force chief put it this week, when no one even drives “cars of that vintage”.
But these are the value of investments India lost in 2016-’17. We do not yet know what happened over 2017-’18 and 2018-’19.
Crippling effects
We do know that the crippling fallout of demonetisation, in human and economic terms, continues, as a 11-part IndiaSpend series reported this year. We do know the government lied that demonetisation ended black money nationwide and terror financing and stone-throwing in Kashmir.
We do know that demonetisation was not the only evidence that Modi’s government is given to broad-brush “masterstrokes” – such as the siege in Kashmir, a chaotic citizenship drive and the hasty announcement on July 1, 2017, of a new goods and services tax, which, together with demonetisation, further shredded the economy and led to a 10% decline in government tax collections.
We do know that the government has repeatedly told us we are being overwhelmed and menaced by millions of Bangladeshis, when its own census data – made public briefly before being pulled down, but not before the website Newsclick downloaded it – listed no more than 270,000 immigrants in 2011, a 15% drop since 2001. We do know that despite this datum, ignored by the mainstream media, four million may lose citizenship in Assam through a dubious process that Modi’s government now wants to implement nationwide.
We do know that the latest evidence of misrepresentation and manipulation of the facts is the unconstitutional method used to abrogate Article 370 of the constitution, which conferred special status on Jammu and Kashmir. What the government did not say was that in 40 years after 1954, as my colleague Shreya Khaitan reported, 94 of 97 entries in the constitution’s Union List – matters under New Delhi’s purview – and 260 of 395 articles of the Constitution, previously not applicable to J&K, were extended to the state. So, Article 370 was little more than a fig leaf, which the government then snatched away for short-term political gain.
It did not say that the Constitution provided special provisions to 15 states, for instance, Sikkim, where 12 of 32 legislative assembly seats are reserved for one tribe and one for monasteries and some fundamental rights are subservient to local religious interests. It did not say that some of these provisions were, instead of being diluted, strengthened over the years.
Jammu and Kashmir’s subsequent demotion to Union Territory, a military occupation of the Valley and the humiliation of its people have made an uncertain situation far worse, drawn international attention, and, as many have pointed out, marked India as an uncaring, majoritarian nation willing to subvert its own democracy.
We know that each of the enormously damaging misrepresentations listed above appear to have widespread backing. Modi was re-elected after demonetisation and the GST, his actions in Jammu and Kashmir are widely and wildly popular, and there is no significant political opposition to his plan to root out illegal immigrants. It does not matter that these moves are shorn of facts, long-term perspective and national benefit.
But knee-jerk euphoria – in an age when even Indians with doctoral degrees willingly place their faith inWhatsapp forwards and fake news – fades with time. The statistical evidence of the inevitable creep of reality is evident with demonetisation and the GST, both of which are now more directly implicated in India’s economic woes than an uncertain global economy. Some CEOs are speaking up, and if more are not, it is because they fear a government that shows no hesitation in being vindictive to those who criticise it.
Disquiet in North East
The effects of the reduction of Kashmir and the divisive anarchy of the citizenship drive may not be evident for a while. In Kashmir, a communication and news blackout continues, as security forces harass local reporters and restrict their reportage. But those other parts of India amalgamated into the republic with special constitutional provisions grow increasingly nervous.
In Nagaland and Mizoram, people and politicians have expressed their disquiet. On Independence Day, many in Nagaland made it a point to fly the Naga flag and sing the Naga anthem – think of that happening in Kashmir. “If the special status of J&K has been withdrawn, then what is the guarantee that the special status of Nagaland – and other states in North-East India – won’t be revoked,” wrote Sudeep Chakravarthi, a writer and columnist who closely tracks disaffection in the North East and elsewhere.
Let’s talk about these facts and nuances because the government will not.
The republic was created by accommodating disparate peoples and cultures by using special constitutional provisions. This is not an uncommon way to address fears of amalgamation. This week, US president Donald Trump created a kerfuffle when he asked if his government could buy Greenland, an autonomous Danish territory. The Danish prime minister’s answer revealed the depth of Greenland’s autonomy and the ease the Danes have with that self-rule.
“Greenland is not Danish,” said Prime Minister Mette Fredericksen. “Greenland belongs to Greenland.” Denmark’s sovereignty extends only over foreign affairs and defence (much as India’s once did over Jammu and Kashmir), despite the fact that more than half of Greenland’s budget is paid for by Denmark.
Greenland has just 56,000 people, 30,000 fewer than Jhumri Telaiya, and its people have never rebelled against Denmark, but those in Northern Ireland have, bloodying England and being traumatised in return. Northern Ireland, which once wanted to merge with Ireland, now enjoys peace, thanks to an autonomy that allows it to even use a different measurement system, kilometres instead of Great Britain’s miles.
“Creating the kind of openness that Northern Ireland enjoys requires imagination and magnanimity,” writes London-based columnist Salil Tripathi. “Maverick politicians can only overturn chessboards, regardless of the consequences – as India may have done, and as [British prime minister Boris] Johnson threatens to do. J&K is not yet Northern Ireland; Northern Ireland must not become like J&K.”
A thoughtful, accommodative approach to national issues in a country as complex and diverse as India requires a national character that is not grounded in majoritarianism and ignorance and government policy that is not a sophisticated version of Whatsapp and other social media. A secure democracy requires governance devoid of deceit and manipulation of data, facts and institutions, and it requires leaders who give due and deep regard to consequences.
The opposite is evident today.