Demonetisation to Unfreedom

Forget about Black Money & Corruption, Ashwin points to the demonetised attack on civil & political #liberties

In the run up to the 2014 General Election, Narendra Modi promised that his government (if elected) would tackle issues of corruption, black money, and cut the existing red tape in the bureaucracy in order to fuel growth and ensure the delivery of services and goods to the populace by adhering to the dictum of “minimum government and maximum governance”. His blog quotes him as saying “I believe government has no business to do business. The focus should be on Minimum Government but Maximum Governance”. If the last year alone was anything to go by, it is palpably clear that this government has become far more intrusive and operates on a larger scale as well.Most recently, his November 8th demonetisation decision, despite being pretentiously framed as a ‘war against corruption and black money’, has served us a glimpse of the technocratic utopia of the State in its promotion of digitization and the drive towards as cashless economy. While the demonetisation decision has come under much criticism on the grounds of economics, I will argue in this essay that the success (and therefore danger) of the demonetisation decision was in making the Aadhar card virtually mandatory in strict violation of the the orders of the Supreme Court.

The Unique Identification Authority of India (UIDAI) and the Aadhar Card Project was set up under the auspices of the Planning Commission in the year 2009 by the then United Progressive Alliance (UPA–II) government. This project was sold on the promise of making every ‘resident’ and in particular the poor and the marginalized visible to the State. In essence, the UIDAI project aimed to bring the marginalized sections of the society under the broader ambit of financial capital and the catchword used was “financial inclusion”. The UIDAI aimed to achieve this through plugging out leakages in the distribution of public services to the poor such as the Public Distribution Services (PDS) and payments under the National Rural Employment Guarantee Scheme (NREGS). The argument put forth was that corruption in the distribution of public services could be eliminated by facilitating direct cash transfers to those in need of such services, thus eliminating the middlemen and leakages in service delivery. While enrolment in the UIDAI was not made mandatory, its inevitable linkage to essential services was evident since the beginning. Subsequently, the UID project gained traction in the aftermath of the 2014 General Election, the BJP came to an agreement with the UIDAI to promote the Aadhar exercise along with the National Population Register (NPR); backtracking on its previous opposition to the UPA launched scheme.

The new BJP government’s promotion of the UID project gained impetus when the Supreme Court in August 2015 allowed the Central government to link the Aadhar card data with the Public Distribution System (PDS) and the disbursement of Liquid Petroleum Gas (LPG) subsidy. The court however, denied the government permission to link the data received by the UIDAI with payments to the Mahatma Gandhi National Rural Employment Guarantee Assurance (MNREGA) and student’s scholarship schemes and referred the matter to a Constitutional bench to resolve issues regarding the legal status of the ‘right to privacy’.

The controversy over the UID grew further last year when the Central government passed the Aadhar Bill, 2016 as a Money Bill, riding on its majority in the Lok Sabha and thereafter attempted to make the Aadhar mandatory for all government (Central and State) schemes and subsidies in violation of the Supreme Court’s order in 2015. The move to pass Aadhar as a money bill was challenged by Rajya Sabha Congress MP Jairam Ramesh in the Supreme Court but remains unresolved yet. The Supreme Court has to its credit been pro-active in coming down upon the government’s decision to make the Aadhar mandatory for student scholarships and reminded the government that the “Aadhar card Scheme is purely voluntary and it cannot be made mandatory till the matter is finally decided by this Court one way or the other” as recently as September, 2016.

[perfectpullquote align=”full” cite=”” link=”” color=”” class=”” size=””]In what has become characteristic of the ruling government’s disposition, the idea of national security continues to be deployed to justify the hardship caused due to demonetisation.[/perfectpullquote]

It must be remembered that the Aadhar card was initially sold on the promise of ‘financial inclusion’. In effect this translated to expanding the reaches of financial capital (formal institutions such as banks) to India’s large informal sector, which does not rely on the banking network. With the transition towards formalizing the entire economy hitting a roadblock in the light of the Supreme Court’s orders; the demonetisation decision on November, 8th has decisively allowed the central government to resolve the impasse over the constitutional status of the Aadhar card. This was achieved by changing the narrative from the “war on black money” to emphasising the need to embrace a ‘cashless and digitized economy’; in the process by-passing the orders of the Supreme Court and virtually making the Aadhar compulsory! With the Supreme Court yet to decide on the constitutional status of the ‘right to privacy’ in the context of the Aadhar, the demonetisation move, much to the delight of the State and market heralds the rise of a society’s gradual transition to full-blown consumerism under the watchful eyes of the surveillance state.

A recent article in the Indian Express reported that the government was keen on developing mobile (smart) phone applications to ease Aadhar-enabled payments “bypassing credit and debit cards, pin and password”. The ingenuity of the demonetisation move and the subsequent push towards a cashless economy was in its ability to bring the entire economy under the minimum digital platform of the Aadhar. While the note-ban move prompted virtually every India to step into the bank to either deposit or withdraw cash; it also necessarily involved the opening up of bank accounts, largely by individuals who make their living in the informal sector. In casting the net of financialization over the entire economy, the central government has also laid the platform for the sharing of consumer data collected in the UID database by allowing private players in the market to make the Aadhar card compulsory, as in the case of Reliance Jio sim-cards. Admittedly, the full-fledged impact of the linkages between the Aadhar card and private players remains to be seen, for instance in terms of an actual co-relation between consumption patterns (arrived at through the data collected in the UID database) and market behaviour but there is no doubt that we are now witnessing an unprecedented promotion of a consumerist ethos supported by the government.

In what has become characteristic of the ruling government’s disposition, the idea of national security continues to be deployed to justify the hardship caused due to demonetisation. It has been emphasized in both of the PM’s preferred media of communication – his Twitter feed and election rallies. On Twitter, he saluted the citizenry for “wholeheartedly participating in this ongoing Yagna against corruption, terrorism and black money” and remarked as recently as December 27th at a poll-rally in Dehradun that “In one stroke fake notes, terrorism, human trafficking, drug mafia were dealt with after demonetisation announcement on November 8”. His cabinet colleague, Mr. Venkiah Naidu, not wanting to be left behind opined that demonetisation was aimed at “attitudinal change and a behavioural modification” towards modernity. However as much as the Prime Minister and his colleagues hail and fantasize the transition to a cashless society, the consequences of this “attitudinal change” do not bode well for our democracy.

The Prime Minister’s narrative of ‘development’ has primarily allowed for the establishment of a massive surveillance enterprise headed by the UID/Aadhar card. The controversy over the Aadhar and the concerns over data-sharing erupted due to its inevitable use (and abuse) by the agencies of the State has been well documented and available in the public domain since its inception. Along with the proposal to amend the Citizenship Act, the misuse of data collected through the Aadhar for the political agenda of Hindutva, remains an ever-present threat. Secondly, by ignoring the order of the Supreme Court, the government has not only subverted the due process of law but has dangerously sacrificed the civil and political liberties of citizens for an ill-conceived technocratic utopia. Finally, what the demonetisation decision most shockingly demonstrates is the virtual subjugation of the entire decision making process in a democracy to the autocratic tendencies of one man. As the alleged success of an ill-conceived economic move continues to be evaluated through the jingoism of Bharat Mata Ki Jai, we look set for another year of the convenient deployment of the nationalism card to justify the gradual decay of democratic values in India.


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Ashwin Written by:

Ashwin works as an Independent Researcher, having graduated from Azim Premji University, Bangalore.

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