(The piece originally appeared in The Hindu, on 2nd January, 2017)
Patience is hardly an attribute that is associated with the Indian
psyche, particularly of the male variety. Instances of road rage at the
slightest pretext leading to death are far too common. A flock is way more
common a formation than a queue. Even if a queue is to be formed, violators run
amok in total disregard for the conscientious and often the geriatric in the
waiting. The urban phenomenon of delirious honking is yet another manifestation
of patience running wafer thin, perennially. The recent past, however, has thrown
up a remarkable exception, namely, general attitude in demonetized India.
As we near the two-month mark, a consensus seems to be emerging among
economists, from either side of the ideological spectrum, that demonetization
will lead to a significantly lower real GDP growth in the transition phase than
expected but will have no effect in the long run. Estimates from academics and financial analysts suggest that demonetization may lead to a decrease
in annual real GDP growth of anything between 1 and 2 percentage points than
expected. One of the many crucial assumptions of course is that the national
accounting norm remains the same. Irrespective of what the exact number is, evidences
suggest that demonetization has left behind a trail of economic consequences in
terms of job loss and diminished economic activity, particularly in the
informal sector and will continue to do so in the near future. Besides the pure
economic cost, the psychological cost of having to wait in serpentine queues
for a couple of thousand rupees is enormous. And queueing up may not yield
rewards anyway as ATMs continue to run dry, especially in the semi-urban and
rural areas. Initial reports suggested that the queues in the second month has
been significantly shorter than the first. Now it seems the shortened queues
have a different explanation - people have a fair sense of how long cash will
last, if at all, and rational that they are, do not wait if they think their
turn will not come. And all this for money that is rightfully theirs and this
makes demonetization even more exasperating and psychologically costly.
For the pain that demonetization has inflicted, the aam aadmi has shown an extraordinary
restraint and patience. There has been no major threat to public order despite
considerable hardship, there has been no major protest, let alone violent ones,
against demonetization. This is quite unlike other instances of sudden and
unexpected economic downturn across the world – the Argentinian riots in 1989
has largely been attributed to sustained hyperinflation in their economy. The
1991 structural adjustments driven economic reforms in India led to considerable
labor unrest in the mid 1990s. Arab Spring, which promised to change the
political landscape in the middle east earlier in the decade, has partly been
attributed to the widespread unemployment and economic hardship of the Arab
youth. Further, research suggests that negative income shock across the world
leads to greater conflict – in fact even scarcity of rainfall, which is
entirely natural and thus exogenous, has been found to have a strong effect on violence
and conflict in India. It is remarkable
that the overall sentiment post demonetization continues to be largely positive,
despite its obvious immediate economic impact, so much so that there is hardly
any wind in the oppositions’ sail. The moot question is why.
Some have argued that the idea of sacrifice is seen as the hallmark of
Indian civilization and the current dispensation has effectively appealed to
it. It has given an impression that any act which is critical of demonetization
is in effect a violation of the spirit of sacrifice, which is an elemental part
of our history and culture. But this is only part true. While sacrifice in
itself provides a moral tone, sacrifice for a greater common good offers the
temporal foundation. And that temporal foundation was initially to eliminate
black money and is now to engender a cashless society. But that is not all
either. The government and its social media allies have gone a step further to situate
demonetization on the tried and tested plank of nationalism. So a dissent to
demonetization is being treated as a dissent to the idea of Indian nation
state. So much so that the Indian military, which till now had been the most luminous
emblem in the pantheon of nationalism, has been replaced, however temporarily, by
the Indian bank teller. Given the automatic tellers have been rendered substantially
ineffective, the hardworking, resilient and ever alert human tellers have been
accorded the status of the jawan. An
unfortunate death in the ranks of bank personnel has even been conveniently
co-opted into the narrative of martyrdom.
It is true that the cashless, opinion making, upper-middle India has
not faced the brunt of demonetization. But even the section of the people which
has been directly hit as a result of the policy, has exhibited an impressive composure,
often found wanting on other occasions. Understanding how human behavior can be
changed is a fascinating academic discipline. Much advances have been made here
in the recent past, but none as spectacular as the effect of a generous dose of
nationalism, however devoid that idea may be of the very people who constitute
the nation.