Why PM Modi's New Year's Eve speech on demonetization failed to inspire hope

When it was announced that PM Modi will address the nation on New Year’s eve, social media was flooded with rumours and speculations about his next steps to fight black money. But for many who expected the PM to continue his surgical strike against unaccounted wealth, Saturday’s 43-minute speech was a damp squib, a drab Akash Chopra snooze-fest as opposed to an explosive Sehwag show. In a mini-budget speech, PM tried to soften the body blow of demonetization, especially for those who have been collateral damage in the entire cash call-back exercise. The PM announced a string of sops for the weaker sections of society, tinkering mostly with pre-existing schemes.

Why the speech failed to make a mark:

The first half of the PM’s speech was about how people have endured a lot of hardship to participate in the entire black money clean-up operation. Keeping up the political rhetoric of 125 crore Indians willingly participating in this 'yajna' and ignoring the fact that they were forced to be part of it, PM Modi's speech refused to shed any light on how hours of standing in queue had led to tangible benefits for the economy and society.

While it is understandable that it's too early for him to provide actual figures for the amount of black money that may have entered the system, he could have furnished numbers to show how demonetization has affected evils like Naxalism, Maoism, human trafficking, drug trade and counterfeit currency trade.

Assuming PM Modi’s claims are correct, all these ills were down, owing to the cash crunch. Once the system is remonetized, will it be back to square one? Unfortunately, PM failed to shed any light on this. A shakeup like demonetization can be a one-time exercise to dust the system of its lacunae, but only a structural change in governance and policing can fundamentally alter the ground realities.

Sadly, such nuance was compromised at the altar of tall claims and boastful grandiose. PM Modi in his speech repeatedly said that the corrupt will not be spared. He also said that it is the duty of the government to protect the innocent. As of now, there is no alternative to take the assurance at face value, but the fears of 'inspector raj 2.0' can’t be ruled out. While PM Modi in his India Today interview assured that this would not happen, one can afford to be weary, knowing how corruption is often institutionalised in the system.  

The PM’s push for more affordable housing, loans for MSME, greater risk cover for farmers and enhanced amount for pregnant women are all welcome steps. But how exactly are they related to a speech which was supposed to be a report card and way forward at the 50-day juncture of demonetization?

The only way to look at it is, Modi was trying to salvage some of the political capital that he lost among the weaker sections of society in the last 50 days. He tried to soften the blows of demonetization by announcing these sops. By highlighting and lamenting on the rich and poor divide, PM tried to reaffirm that he is fervently with the less fortunate.

The better part of PM Modi’s speech

Policy decisions shouldn’t be taken on a whim and one should applaud the PM for resisting the temptation of giving a one-time lump sum amount to Jan Dhan accounts or to BPL families as many had predicted. He chose the tougher but saner path of looking for incremental growth and Saturday’s announcement alongside those already in place can go a long way to eliminate poverty and improve the lives of crores of Indians. By giving a push to Digital India and Aadhar-based payment system, the government is looking to cut leakages, empower the poor by directly reaching out to them and bring the unorganised sector under its fold. How well these schemes are implemented will finally determine if Modi’s grand vision of Sabka Saath, Sabka Vikas succeeds or simply tapers off like the Garibi Hatao agenda of past Congress governments.

A major point of yesterday’s speech was the PM’s assertion that only 24 lakh people have declared an income of Rs 10 lakh per annum. It is indeed a shocking number, and is a challenge for the IT authorities to crack down on all those who have so far managed to hide under the radar. It is likely that the government will base the nature of success of demonetization to the extent that the number of tax payers is increased, once the cash flow in the banks is accounted for and money trail is ascertained. A significant widening of tax base will not only help the cash-strapped government, it will enable them to blunt the attack of the critics.

But for now, PM Modi had to be content to package demonetization as a one-stop panacea for manifold social ills with dollops of nationalism in between. The mentioning of past wars and how the country has stood united was done to precisely evoke that imagery. After avoiding any major incidence of unrest in the past 50 days, the government can feel it is in the home stretch with the situation slowly coming back to normal.

But it must also be acutely aware of the wrath of the silent voters who may not be mollycoddled by mere grand statements and demand hard facts or tangible change to justify if undergoing the hardship was really worth it. Herein lies the greatest failure of PM Modi’s New Year’s eve speech. He failed to make any new points to make us believe that demonetization was truly the need of the hour. PM Modi packaged demonetization as grand success, but failed to provide any hard numbers to support his claims. The government is still winning the battle of perception, but only just.