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Sunday, January 17, 2021

Demonetisation: What’s in it for us, Mr Modi?

Reading Time: 12 minutes

In conversation with Indian television personality and current affairs commentator Abhigyan Prakash

He may be a charismatic current affairs presenter on television, but Abhigyan Prakash is also an astute political analyst.
Abhigyan Prakash.Indian Link
Prakash has been presenting live election analyses for Indian elections, both state and parliamentary, since 1996 (Election Point, Vote Ki Jung). Interviewing Prime Ministers and top leaders, Abhigyan has become known for his particular style of presentation – direct, honest and credible.
Along with national issues, in the past five years the focus of his hugely popular shows Newspoint and Mukabala has been on political economy.
Here, he shares his views on a variety of issues in a freewheeling interview.
Pawan Luthra (PL): The D word, demonetisation, continues to be the talk of the town amongst Indians the world over. PM Modi’s stated views were that this will expose those with black money, weed out corruption and also, tackle counterfeit currency. Now two months on, where are we?
Abhigyan Prakash (AP): The key issue here is that the payout has been the problem of the process. Since the announcement on 8 November, 2016, the people have been facing huge difficulties, queuing up for hours at banks and ATMs, exchanging their notes. What has been criticised the most, is the process in which this entire exercise has been carried out. Better planning and proper procedure was needed. A large section of the population are in favour of the move, no doubt, they don’t want the economy to run on black money. But you also have to accept the reality that in India, only 3 per cent of the country’s population are direct taxpayers, 97 per cent are indirect taxpayers. About 68 per cent of that are members of the rural workforce, so you’ve got an economy which is very complex as compared to others. That’s why 1991, the year of liberalisation and free market, started under the Narasimha Rao Congress government, is considered to be such a milestone.
PL: Was there much planning done prior to this radical announcement, or do you think this was done rather hurriedly or with very limited consultation?
AP: There are many theories, but my take on it is, of course there was planning, but that planning was not shared with certain relevant people. This point has been raised by the Opposition in Parliament as well.
PL: Would that have diluted the impact and been a case of too many people driving the car at the same time?
AP: It’s not a question of too many people driving the car at the same time, it’s a question of how many roadblocks do you want the car to have to drive through! The point is, could you have reduced the roadblocks? Were you able to convince the Indian middle class – which loved you in 2014 and voted hugely for you, giving you that magical number of 282 (seats in Parliament)?  The people were caught by surprise. Totally caught by surprise. So at 8pm on 8 November the announcement is made, and then you see at least half of urban India standing in queues! I think the surprise element could have been taken away. There could have been a more dialogue-oriented process of telling the people, ‘the government is planning to do something and we need you to back it and support it’. Planning was lacking, from the perspective that the payout has created such problems. That was perhaps not calculated properly.
Abhigyan Prakash.Indian Link
PL: The three reasons given for the policy are: exposing those with black money, weeding out corruption and tackling counterfeit currency. Eight weeks in to the scenario, how successful has demonetisation been?         
AP: Eight weeks is a short time to judge the scenario, but definitely all eyes will be on the budget. I have already written about it in my regular columns for the major publications in India. One of my columns was titled, What will we get out of it? And that’s the key question Indians will be asking, and there should be a clear plan and vision given to that. Prime Minister Modi has done what he wanted to do; and now people want to know from him, what are we going to get? Will you be able to give us competitive interest rates as compared to the global economy?
PL: Which he can’t do. If you look at the global economy, outside the US, in most OECD countries they’re lending at one or two per cent.  In India it’s 10-12 per cent!
AP: That’s right, that’s the same point I’ve raised in my columns. Can you slash that by half? No, you can’t! When the economy is in a sluggish mode or struggling, you can explain it away by saying the global economy is in recession. All governments do this – BJP, Congress, whichever. You’re now living in a globalised world, so once your banks are back to being cash-rich, what is the average Indian getting out of it?
I’ve reported extensively on rural agendas, economies and farmers. It’s an agrarian economy in India, with 68 per cent of the workforce in rural labour. Is the farmer now going to come out of the clutches of the local man who lends him money, the sahukar? Who eventually forces the farmer to commit suicide if the crop doesn’t work out? The distress of farmers, will that change? Is the farmer going to get cash-rich? You’ve taken money away from the middle class, or those who you thought had a lot of black money, which was the right thing to do, no one is questioning that. But are people going to get a share of that now? Is this farmer going to get it? Will he be able to plough his fields without the worry that ‘I’ll have to borrow money from the local lender who will eventually take my signature, own my land for the next 100 years and, every time, add interest?’
PL: So, do you think it will filter through?
AP: I’m not the right person to answer that. That’s the question that Narendra Modi has to answer eventually, with Jan Dhan or various other schemes that he’s working on or has introduced. Will it actually reach these people? That is the question. Let’s be honest, nowhere in the world can you create a cashless economy. You can reduce it. Even in the most developed nations, you don’t have a cashless economy. It’s a great notion, but it doesn’t happen. And about terrorism, yes, it is very important to check counterfeits because that’s your main source of funding for terrorism. India has been struggling with terrorism for the past 25 years, with Pakistan’s ISI regularly disturbing parts of India through homegrown terror. So all this is the right move, but will it reach the people it needs to reach, and how fast? That is why I’ll be very closely watching the next budget.
PL: Anything else people can expect in the next budget which could be effected by demonetisation?
AP: Worldwide, look at the example of the second Obama administration: we all know he was struggling with a lot of his people becoming jobless. Economies have to be refunded in a way by governments pulling them out of their own crisis. If that is the agenda, if that is the reason the Indian government has collected money, then it will have to reinvest it into the economy. And that reinvestment has to be very evident for the people to know and realise. You can’t build all the roads and hospitals and bridges in two and a half years. That reinvestment has to be highly visible and that will surely be one of the challenges.
Abhigyan Prakash.Indian Link
PL: To your knowledge, how have corporates taken the demonetisation?
AP: A lot of them have officially said, yes this is short term pain for long term gain. That has been the line. Again, corporates are very tax driven, what else is business about? It’s about how much tax they have to pay to the government, so they will also want to know, what are the concessions coming their way from the government? Already there has been a time-bound reduction suggested for the corporate tax in the last budget. Everybody agrees, this country shouldn’t be living off a cash, black economy. But if it’s about getting organised, about implementing structure, let us know. That’s my key point. Let us know, what are we getting back from you? Tell us a clear plan of what Indians are getting back – be it industry, farmers or new business sectors, and of course the huge middle class which has literally changed the landscape of India in the past 25 years.
PL: Is this the biggest gamble Modi has taken in his political career?
AP: I think you’ve hit the nail of the head. I have written about this. In my columns for Outlook and Business World magazines, my first paragraphs argue the point that Narendra Modi will be judged very critically, just like Narasimha Rao was with the economic liberalisation and Babri Masjid incident, Viswanath Pratap Singh for the mandalisation of Indian politics. Many Prime Ministers have been very critically judged by what they did in history, so will Narendra Modi.
PL: What drives Narendra Modi?
AP: I’m sure he has a certain conviction; he has his vision for the country. He has been known to be a person who works on that and takes a decision. This is a very bold decision Narendra Modi has taken. Any Prime Minister who has 282 seats in parliament and has a comfortable majority, has no threat to his government for the next five years, has to have a lot of conviction within him to take a bold decision like this, which could easily take away his entire popularity.
PL: You have spoken about the difference between being the ‘Chief Minister of India’ versus being the ‘Prime Minister of Gujarat’.
AP: The reason I said that about Narendra Modi is, he was a very different kind of Chief Minister, compared to other Chief Ministers in Gujarat. Quick decision maker. Would push the decisions. But Gujarat is a state. Now he has to deal with a very complex socio-economic scenario of a huge country like India. And yet, people want him to take decisions in that same manner. He had nothing to worry about as far as this term was concerned. Still he took the decision and he knows it can go against him if it doesn’t work out the way Indians want it to, or expect it to.

Has he treated India like Gujarat? In Gujarat he took decisions very quickly and implemented things very fast, but this is India, a very complex country.

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PL: What are his fall-back options should demonetisation not work and he hurts the very voter base who brought him to power?
AP: He is a very popular leader among the middle class. They are a huge, affable, loveable support base for him. So it will be very interesting to watch.

Women, in particular will be an important factor because demonetisation has directly affected them. Women, our home-makers, I feel are some of the finest economists India has – the way they run their households. Remember, it was their savings that were brought out of the house during the recent weeks; it’s something which has never happened earlier.

PL: If you were Modi, what would keep you awake at night?
AP: The question that whatever I’ve thought of, is it being quickly implemented? And also, am I getting honest feedback? Feedback is extremely important in a country like India. Many politicians come to power and sit in an ivory tower; they don’t get the feedback until it’s time to vote again! It happened to the Congress in 2014. A majority government by a national party, went down to a mere 44 seats.
PL: You have been a keen observer and commentator of politics in India for 20-odd years. How has politics changed in this period?
AP: In a lot of ways! For a simple reason: we’re a very young nation, and our youth are very active in politics in terms of opinion making, in terms of contributing to that opinion, and of course in terms of being part of the electoral process. There are new political parties that have emerged in urban centres like the Aam Aadmi Party in Delhi. A lot has changed. I think politicians are coming closer to the reality that new ways of politics have to be adopted. But despite that, caste politics hasn’t changed. It has segmented sections of Indian politics over the last five decades… that hasn’t changed the way it should have.
PL: Is there room for sensible discussion in politics today? Is there too much far left and far right but no middle ground?
AP: That’s a very pertinent, serious question. I was on a program recently with Javed Akhter and we both made this point: India’s greatest socio-political strength has been in its liberal, centrist, secular position in key times of crises. At the moment, it’s becoming difficult because either it’s extreme left or extreme right. People are looking for the opportunity for the middle ground to come back. That’s also why it’s very important to see how Congress will go from here.
PL: Is the media in India stopping sensible debate?
AP: A lot of the time, yes. The solution is you have to change the way viewers look at the media. The media has to understand it has been completely positioned – either against or for.
PL: Let’s dive a little deeper into the politics of India. The Congress party had a resounding loss in the last general election. The BJP had an overwhelming majority. India, as the largest democracy in the world, needs strong opposition to any elected government. Fast forward 15 years from now, how do you see the political landscape in terms of central major parties and regional but strong parties?
AP: There’s no doubt that the national parties, India’s only two major alternatives to each other – BJP and Congress – have both ended up running the country through understanding the politics of coalition. Traditionally, both of them were against it. The new space will not entirely be left to a national party, or not entirely to a regional party. It will always be a combination.
The national parties are not being able to reinvent themselves in the states. They do come to power in the states, but it’s also very obvious, whenever they’re in power in the centre, naturally they also do very well in the states. But it has not yet come to a position where the regional parties are going to be finished. That is not going to happen. They will have to live with that reality. The senior party will be the main political parties, but you will not be able to ever look at Indian politics where regional parties are completely sidelined, it is not possible. There are regional aspirations; the people want and demand more, and may feel that the regional players might provide better.
PL: Moving on from national to international affairs, within 24 hours of the demonetisation announcement, we had another seismic change in global politics with Donald Trump elected as the 45th US President. How did the world, and media, get this so wrong? Nobody had predicted this result. Is media now more focussed on creating the news such as who should win rather than reporting on ground reality of what actually people are thinking?
AP: I don’t know how to answer. Those who are taking definitive lines or following definitive agendas in the media will have to watch out. The American election again is a lesson for the media itself to learn, worldwide. There’s no denying the fact that the credibility of the media is at stake in India. A lot of people now question the media, massive opinion has come against the media. People have to be very careful, because they generally feel media is not getting the kind of independence it should, by itself. I don’t know about the American media, but of course I also watched the elections and results very closely. Your question is very relevant, because I saw, after news of Trump’s winning in different states started coming in, the experts and their views also started changing on television.
PL: What does a Trump presidency mean for India?
AP: It should be good, for a very straightforward reason: he has his views on Pakistan which he has voiced in the past. India has been putting a lot of pressure on Pakistan, given the last incidents of terrorism. The Indo-Pak relationship itself, started off well under Modi, with Nawaz Sharif attending Modi’s swearing in ceremony. And then Modi was criticised after he stopped by unannounced in Lahore to attend a family function. But there was a lot of effort made. Sushma Swaraj went to Islamabad and announced talks. Then of course it all derailed after a series of terrorist incidents.

Narendra Modi had a very good relationship with Barack Obama and it should continue with Donald Trump. The key factor there will be to see the kind of American pressure a President like Trump puts on Pakistan, and how his friendship with India goes forward from here.

PL: What about Trump’s xenophobic statements? How does that play into the extreme right elements of the world, including the BJP?
AP: It will take time to understand the reactions. The good thing about Trump – of course he has a lot of people who disagree with him – but his positions are quite well known. He’s one person from whom there’s not much of an element of surprise. I don’t think the BJP will have much of a problem on that front.
PL: You have travelled extensively overseas and met with a number of Indians abroad – do you see them playing any role in India’s future or would you believe that as they have no skin in the game, they should keep quiet about the reality in India?
AP: They should play a much larger role. We are living in an era of information and change. There is a need to gather the information and pass it on to the youngsters back home and make them more alive to what the world is about and how the world is changing.
PL: What has been the most fascinating story you’ve worked on – something which has been an absolute game changer?
AP: When the Pokhran nuclear test took place in 1998, I was the first reporter to break it. Atal Bihari Vajpayee was the Prime Minister then and I literally broke the story from inside his house. I still remember that very clearly. It was a huge game changer for India, because just a few days later Pakistan also tested. That was a momentous time for Indo-Pak relations.
The disturbing bit was 26/11 – the attack on Mumbai and at the Taj Hotel. I was there as a reporter all through the period. I had seen many terrorist incidents in the past, but when you realise how close terrorism can actually get to a normal human being’s life, that’s when you really understand how internal security is not just some phrase to be discussed intellectually, it has to be implemented. It made me realise how absolutely vital it is to live in a safe and secure environment.

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Pawan Luthra
Pawan Luthra
Pawan is the publisher of Indian Link and is one of Indian Link's founders. He writes the Editorial section.

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