Modi’s Shield Against Black Money Will Boost Garib Kalyan Economy

Modi’s demonetisation move has ushered in economic democracy across India, writes Vinay Sahasrabuddhe.

Demonetisation continues to remain the most discussed subject across India. Broach the subject at a dining table discussion or a gathering at a family wedding and you would soon find yourself in the midst of a barrage of heated arguments. The ‘Argumentative Indian’ was perhaps seen at his or her best while discussing demonetisation.

While the arguments varied during these debates and discussions as also the vehemence from all quarters, the one and only constant in the pro- and anti-demonetisation camp was Prime Minister Narendra Modi.

One witnessed robust confidence among people about the PM's intentions or fundamentally about the doubtless ‘purity of purpose’ on part of the PM. Even for those belonging to the diehard anti-demonetisation camp, the unmistakable point of agreeing to agree wholeheartedly was the ‘Grand Nationalist Design’ of the national leadership behind this hotly debated move.

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Move Towards Financial Inclusion

• Demonetisation has been effective in dealing a blow to terror networks in Kashmir and underground economy in the states of the north-east.
  
• Note ban has pushed tech-friendly India towards social assimilation.
  
• Mobile phones and apps have emerged as the new social equalisers pervading caste.
  
• A slew of ‘garib kalyan branches’ that lend money to small-time borrowers can address the needs of the marginalised.
  

Intention Can’t be Questioned

It is this doubtless ‘purity of purpose’ of the PM that has proved to be the kavach kundal or an impregnable protective ring. Thanks to this, the commoners braved serpentine queues at ATMs or took a remarkably considerate view of repeated changes in rules introduced by the RBI. Notwithstanding the repeated attempts of opposition parties to create artificial turbulence, people dealt with the situation peacefully and in an exceptionally responsible manner.

Never before in the past have people from across geographical regions, social groupings or economic strata unitedly handled the situation even while facing a situation which in certain areas demanded extraordinarily high tolerance levels. For those engaged in clinical research in the science of leadership, demonetisation could easily become a very unique case study.

Yet another aspect that merits deeper analysis but is completely missing in the current national discourse around demonetisation is the art of communication. Modi's address to the nation on D-day (8 November) and his subsequent Mann ki Baat in November and December, had all the elements of mass education.

With remarkable clarity of thought, simplicity of diction and an inimitable style of delicately touching finer aspects while taking masses into confidence and extending a strong appeal to grant requisite time-window, the PM has once again emerged as a great communicator. Neither the deliberate washout of the winter session of Parliament thrust upon the people nor the so-called Bharat bandh helped Opposition parties cut any ice. The sooner they realise that the PM’s teflon image is not god-gifted but hard earned, the better.

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Moving Towards Tech Literacy

What next? As a student of social science, it would be interesting to analyse India after demonetisation on at least three counts. First, it should not be overlooked that elements rampantly indulging in illicit liquor and drugs are facing tough times. Human trafficking is also on the wane and there is a considerable decline in terrorist activities in the Kashmir valley. Underground economy in Nagaland and Manipur has also received severe jolts. All these are significant takeaways of demonetisation that have been largely ignored by the media.

Secondly, and more importantly, it is high time that we realise the emergence of an India that is aspiring and not agitating. This new India refuses to crib and complain. It has readied itself to perspire and aspire. It is this emerging India – from a vegetable seller to a boy mending shoes – that has adapted app-based money transfer fairly easily. This social mindset has to be built upon. Post-demonetisation, vigorous attempts to take tech-friendly India to higher levels are urgently called for. This is important not just for seamless transactions but for further leveraging technology for social assimilation as well.

Mobile phones and apps are the new social equalising tools. Touch screens are now out to eliminate residual untouchability. Demonetisation has driven the masses towards tech literacy. Those who were denied social respect and faced deprivation of one kind or the other, happily realised that in front of ATMs, everyone is equal. Policy wizards would do well to understand the strength of technology as a social connector and build on it.

Also Read: Managing Notebandi Anger: Modi Reaches Out to Small-Time Traders

Promoting Entrepreneurship

Thirdly, post-demonetisation compulsions have enhanced the penetration of the Internet. Internet today is more than just an entertainment platform, with greater social consolidation and sustained deepening of knowledge for the society of tomorrow. Digitisation has a great potential for exposure to the Internet, and thereby internet market places, vastly increasing access to capital. Handled adroitly, this may lead to entrepreneurship culture crossing social boundaries, developing a large base of micro entrepreneurs in smaller cities.

Also Read: Why Atal Bihari Vajpayee Could Never Have Gone for Demonetisation

‘Garib Kalyan’ Branches

Fourthly, in the long term, demonetisation will lead to increased access to capital. Increased bankability (bank credit worthiness) of those businesses, enterprises, accounts which are now digitised will help provide increased access to capital for a lot of small lenders and micro capitalists.

An idea worth pondering upon therefore will be converting the existing rural branches of nationalised and cooperative banks as well as post office banks into a network of ‘Garib Kalyan’ branches. Demonetisation brought the rich and poor on the same footing as the rich were more inconvenienced.

Having reached this stage, let’s now strive for respecting the innate honesty and integrity of small credit seekers. Given the fact that they have always sustained themselves on timely repayments, it's time that their integrity is rewarded through a chain of branches that will cater to the needs of marginalised sections on a priority basis. This may also lead to replacement of the non-banking financial companies (NBFCs) not known for a humane and un-exploitative approach.

Besides, if efforts are made to integrate women self-help groups into this chain of Garib Kalyan branches, it may lead to the concept of financial inclusion acquiring many more dimensions, leading to an equitable economic participation of those deprived and forced to remain at the margins. Garib Kalyan branches could propose to include some basic mandatory lending to rural micro SMEs on the lines of the Gramin Bank of Bangladesh. The Garib Kalyan fund too could in some way be used to enhance the creditworthiness of those borrowers. The banks then with more touch screens in rural areas will push the revolution further. It may work like a self-propelling engine!

In this entire saga of demonetisation, Modi has also emerged as a strong advocate of economic democracy, a concept cherished by Dr Babasaheb Ambedkar. Noted American poet Edwin Markham had famously underscored the strength of love and wit, passion and performance, desire and determination when he wrote, "But love and I had the wit to win: We drew a circle and took him In !" Prime Minister has clearly drawn a circle to take in those who’re deprived and forces responsible for the same, out!

The article is part of The Quint’s series on 50 days of demonetisation. This is the Counterview. You can read the View by Shashi Tharoor here.

(The writer is BJP Vice-President and a Rajya Sabha member. He can be reached at @vinay1011. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)

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