Demonetisation exercise could backfire for BJP if cash crunch endures for long
High stakes gamble:
November 15, 2016, Times of India Editorial
(Note: The towering Himalayan news in India is Demonetisation, also called the midnight surgical strike to wipe out black money. It is comparable only to the least expected Trump Victory in US which makes the American and world press still struggle unsuccessfully either to swallow or to vomit it out of their throat. Least of all none is able to digest it.
All agree that a targeted decisive strike at black money was timely, nay overdue. Modiji got the full backing of the bulk of Indian people, even of outsiders for his master stroke. But a brutal strike at a deadly beast should have got the hell out of it for good instantly, without allowing the beast to have any shred of life to prowl back on the striker. Unfortunately this has not happened even after a week, as evidenced by the serpentine queues of the Aam Aadmi before banks and ATMs due to cash crunch and a wrong or total lack of preplanning. This has now almost convinced the general public that the adventure was the brain wave of just one or two at the very top, who wanted to surprise the nation and take the full credit after its uncertain success.
Politicians make wild promises to capture public attention. The unthinking, credulous public just swallow them and get hooked like brainless fish. But the discerning public will wait to see their actions to give them any credence or pass any judgments. Now the PM himself seems to have realized that he had bungled. But how can a PM admit that in so many words. So instead of doing that he is resorting to the next respectable option of correcting what he said and did on Nov.8th almost every day after seeing the lengthening queues for cash and some of them succumbing to death.
It is human to make mistakes, but it takes a wise man to correct his wrong decisions at least for the sake of reducing hardships caused to the Aam Aadmi all ready to cooperate with the PM. May be what Modiji needs is a team of wiser, more mature and foresighted advisers. May he be blessed with such a wise 
team so that he may not have to change his solemn promises – the first being to deposit some 14 lakh rupees in each Indian account in one month after recovering black money locked up in foreign banks — given to the nation. james kottoor, editor)
With Prime Minister Narendra Modi strongly defending the demonetisation of Rs 500 and Rs 1,000 currency notes in recent public speeches, there’s no denying that the move is a high stakes political gamble for BJP. Though aimed at fighting black money and counterfeit currency, the exercise has also caused much hardship to the common man. Aside from long queues at banks and ATMs, people facing medical emergencies or planning weddings have been hit hard by the cash crunch. The situation is even worse in small towns and villages where banking penetration is weak.
Yet, despite the inconvenience caused, the public has so far been largely supportive of the demonetisation move. They hope that it will fight corruption. But if the cash flow isn’t normalised soon and queues at banks and ATMs remain long, this supportive mood could quickly flip. It isn’t clear that the government has prepared adequately for the demonetisation effort. Even accounting for secrecy, it could have taken steps such as increasing the flow of Rs 100 notes and quietly recalibrating ATMs for the new notes, that would have mitigated public hardship.
The move is risky as it could alienate a core support base for BJP: small traders and businessmen who largely deal in cash. In recent days, they have seen their supply chains dry up and customers dwindle for the want of liquidity. The pain can’t be sustained for long. BJP might want to advertise the demonetisation effort as a surgical strike against black money. But given India’s economy depends largely on cash, and 85% of the currency in circulation was in Rs 500 and Rs 1,000 denomination, the move is nothing short of a full-blown conventional strike with massive collateral damage. Given the nature of Indian politics, it shouldn’t come as a surprise that opposition political parties will use this opportunity to attack the government.
We have already seen West Bengal chief minister Mamata Banerjee try and reach out to arch rival CPM to corner the Centre on the issue. The upcoming winter session of Parliament is likely to be stormy with political battle lines clearly drawn – BJP will continue projecting demonetisation as a bold move to fight graft while opposition parties will highlight the plight of the common man. BJP’s strategy will work to the extent the government is able to stem the cash crisis quickly.
