How not to talk about Demonetisation?

Exactly one year ago, India was subject to demonetisation – a country where more than 90% of our transactions are in cash, and in such an economy, about 86% of the notes were declared illegal overnight. How do we understand what happened?

Even the most basic calculations would have sufficed to show that any black money recovered from exchange of notes, or simply extinguishing of black money would just not be worth the damage to our economy. The government very well knows that there is no infrastructure in rural areas to switch to digital transactions. So then the inevitable conclusion is that the government behaved completely irrationally. However, if we simply dismiss demonetisation as madness in the method, we will fail to see method in the madness. In fact, the entire exercise was a very self-aware and deliberate act of transgression, a complete rejection of slow rational policy making that achieves often invisible and incremental growth over decades. This on the other hand, was action for its own sake, and what’s more, meant to be understood as just that. Many ministers came to Mr. Modi’s defence with a strange argument. It was basically that to do such a thing would normally be political suicide, and the fact that Mr. Modi has pressed on with it just goes to show his honesty and commitment and so on. Now, we see that the very irrationality of the decision is presented as virtue. There were many proclamations of how Mr. Modi was a ‘bold’ leader, willing to do something[1].

Thus, there is now a self-perpetuating dynamic that comes into play. Madness gets presented as its own logic. The result is that action taken by a strong and bold leader is valourised for its own sake. The modus operandi is to keep repeating this process every few months so that before the failure of the first instance becomes obvious, there is already another action ready, ad infinitum. It seems like a hopeless nightmare from which no escape is possible. What is to be done?

The first thing is to move away from the orthodox Marxist belief that people are in the sway of false consciousness, and hence they support demonetisation or for that matter a ‘bold’ leader. The fact of the matter is that when demonetisation was announced in 2016, the bottom half of the population owned only 2.1% of the total wealth in India, while the top 1% owned nearly 60%[2]. Calorie intake has been decreasing since decades now[3]. Mr. Modi is doing exactly what he should be doing – addressing the poor and giving them hope that he will improve their material conditions in one swift masterstroke. The conditions on the ground may not have changed at all, but it is quite plausible that people still believe in his intentions (with his readiness to ‘act’ as the proof of intention).

Thus, it is one thing to say that demonetisation has failed empirically, but quite another to assume that it will lead to BJP’s defeat. On the contrary, Mr. Modi has jumped from one policy to the other, and every time, the residue in public consciousness is the honourable intention. Meanwhile the opposition parties seem to be completely unaware of these dynamics.

Mr. Rahul Gandhi has of late been deploying some humour, both in public speeches and online. There is no doubt that humour has some redemptive value, perhaps even some therapeutic value in a deeply polarised atmosphere. The parliamentary Left parties have criticised the government every single day – all with flawless logic and the right numbers. The other regional leaders have more or less done the same. No doubt they all think that relentless criticism with some jokes thrown in is what constitutes opposition.

However, given the current dynamics, the more they criticise the government, the more entrenched supporters will become in their beliefs. The more fun they poke at Mr. Modi, the more outraged his supporters will become. We can see a glimpse of this in the United States. Smug comedy show hosts on television and wry newspaper editorials continue to deplore Donald Trump. They believe that to make fun of him is to erode his authority and this is the big mistake. What people need is opposition in a positive sense. They need a vision that is convincing and radically different from what is on offer.

Every time opposition leaders restrict themselves to blind and noisy criticism of Mr. Modi, they are reducing their own stature in the eyes of the people. It has become a circus where leaders take potshots at each other. People may laugh but the status quo remains the same. It is high time that our opposition leaders took a cue from the politics of Bernie Sanders in the U.S and subsequently, the rise of Jeremy Corbyn in the UK – both coming from old, big political parties.

Opposition parties need a sea change in the substance and aesthetics of their politics. Important policies have to be articulated in positive terms, with clarity on challenges, timelines and budgets. Leaders need to acknowledge that these issues are not just ‘technical[4]’ but rather affective and embodied – they speak to the everyday lives of people and act upon the body. Without this element, leaders will continue to be alienated from the people.

One hopes that after one year of demonetisation, the opposition is not still obsessed with Mr. Modi, who is already getting far too much attention in any case. As for any claim to wrongdoing by government, the people have direct experience and do not need any reinforcement from these prophets of the obvious. Rather the opposition leaders need to take up the opportunity to change the very grounds of political discourse.


[1] For a more detailed account of how this ‘irrationality’ works, see Prabhat Patnaik’s Second Annual Lecture of Centre for Policy Analysis on Demonetisation and Democracy on 5th February 2017. Available at

[2] ‘The richest 1% of Indians now own 58.4% of wealth’ by Manas Chakravarty in Livemint, published on 24th November 2016. Available at

[3] ‘Theorising Poverty and Food Security in the Era of Economic Reforms’, Utsa Patnaik, 2008. Available at

[4] A term now made (in)famous by Mr. Amit Shah. For example, see


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Ram Bhat Written by:

Ram is a co-founder of media and arts collective Maraa (

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