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Welcome to the age of post-truth politics. Facts are increasingly of secondary importance only emotions that matter. These have worked, think India 2014, Delhi 2016, Brexit, Trump etc.

Plus it is not as if the PM is speaking illogically. He is merely changing the narrative as it suits him. If you see the way in which the key terms have changed in his speeches over the last 3 weeks, you will see what I mean (Chart below from IndiaSpend)

While launching the scheme it was important to whip up passions around corruption (black money) and terrorism (fake currency). After all who could ever argue that these two problems didn’t ail India? So that was what was said, no matter that it made no sense then or now.

People who had loads of black money were supposed to be in a fix and unable to bring it into the system and thereby their money would turn to worthless paper overnight making a huge profit for the government (which then did not have to honour the notes). Within 2 weeks it was evident that the money was coming in fast and through many means. More amnesty schemes did not help. Now it is expected that most of the money will be coming back into the system. So no windfall gains for government there.

When there was a realisation was that it made little sense, the narrative was toned down. Counterfeit money was slowly dropped. See these headlines

  1. Fake currency smuggling falls along India-Bangladesh border
  2. Smuggling of Fake Notes Substantially Down: Venkaiah Naidu

They seem very impressive. No? Read the articles to find out how ludicrously low the amounts in question are. I am not saying that counterfeit money is not a problem. But the measures to combat must be in line with the enormity of the same. You don’t burn down your house to kill a couple of mice who have come in.

Going cashless sounds nice, appeals to the middle-class, internet-savvy Indians who are the most vocal supporters of the PM. However, considering the tiny percentage of Indian citizens who have internet on the move (I don’t for instance) and access to credit cards (I do have one), this is a silly idea, at least for now. You don’t force people to use dubious and insecure methods, (Paytm drops PoS feature on app on security concerns), just because you think it is a good thing. What is wrong with cash? It is something that everyone understands, even PK understood it soon enough and he was an alien. Further cash is technologically secure and cannot be hacked into. If India has to move to cashless let it move there not be pushed off a cliff.

I feel that since the policy has it’s origin in politics and not economics, it is being flogged to death. It cannot be repealed without loss of face which cannot be allowed. There aren’t any clear yardsticks / measures to determine What Success Will Look Like and When. Which helps a lot because then one cannot be held accountable. Plus one can keep changing the narrative every day and no questions can be raised.

Since no success can be demonstrated with hard numbers, only option is to keep talking about the policy in vague, emotional tones. The PM is a superb orator and KNOWS what his audience wants – like a good politician he gives it to them. Which is why

  • He will tell the middle class that their hard work will be rewarded, they will not lose money to corruption.
  • To the poor he says “black money retrieved from crooks will come into your account”
  • He will make jokes about beggars using credit card machines without pausing to think of why there are so many beggars in India in the first place.
  • Laugh at the rich having no money to wed their daughters (he said this to NRIs in Japan but weeks later went to one of the biggest and fattest weddings in recent time, Nitin Gadkari’s daughter’s wedding in Nagpur).

He also has his shouting brigade on social media cocked and ready to shoot down all dissent. He does not need to test the logic of what he says. Just make sure that the audience laps it up.

Interestingly, as I write this, the PM has not said a single word where it matters – in Parliament; I think the PM does not care that his silence shows that he has utter disdain for Parliament and his colleagues there. Sad.