TRYST with Destiny” is the speech delivered by Jawaharlal Nehru, independent India’s first prime minister, to the Constituent Assembly, on the eve of the country’s independence toward midnight on Aug. 15. 1947. Considered one of the greatest speeches of the 20th century, it includes the sentence, “At the stroke of the midnight hour, when the world sleeps, India will awake to life and freedom.”
Some 69 years later, another prime minister of India, Narendra Modi, announced a momentous decision which took effect on a midnight: Scrapping of 500 and 1000 rupee notes. Indians were given notice that much of their cash would be reduced to scrap paper within four hours.
The prime minister said this was a surgical strike on corruption and black money. The move was to force tax evaders and corrupt officials hoarding cash to deposit or exchange their old notes at banks by Dec. 30.
Modi may not like it, but people are paraphrasing Nehru’s speech to describe the effects of his Nov. 8 decision on the country: At the stroke of the midnight hour, when the world slept, India slid to an economic chaos.
And a chaos for which nobody was prepared. Modi said the scrapping of notes, aimed at bad guys, may cause “temporary hardships” to “honest citizens.” But going by the long queues in front of banks and comments and reports in the Indian media, hardships appear anything but temporary. And the victims are not bad guys with hoards of unaccounted money, but ordinary people. Especially hurt are the poor in remote, rural locations, who are holding higher denomination notes as savings. Most Indians don’t have credit cards, they buy and sell everything in cash. Small sellers or street vendors are suffering the most as they are dependent on cash transactions. Canceled rupee notes were used in an estimated 78 percent of transactions in India, compared to 20 to 25 percent in industrialized countries like Britain and US. Even in urban areas, many do not have bank accounts or credit cards, and even those who do often must use cash because many businesses don’t accept other forms of payment. Reports speak of long waits, scuffles and banks and ATMs running out of cash. The people are desperate for cash to pay for the things they want — medicines, food or pay for transport to get home. Hospitals deny treatment to those who don’t have legal tender. The situation has become so grim that India’s apex court on Friday warned that there “may be riots” if the situation is allowed to continue.
It now looks Modi has done something which may prove very costly for him and his Bharatiya Janata Party (BJP) politically. Political gimmicks or histrionics like having his 95-year-old mother wait in front of a bank is not going to help him avoid the consequences of his action or inaction.
Yes, there are things the government failed to do or did not think about.
For example, it should have issued enough new bills in right denominations and initiated measures to recalibrate India’s 220,000 cash machines to handle the post-monetization situation. Nothing was done with the result that people have to wait in lengthening queues outside ATMs or banks to get limited quantities of new bills and cash exchange or to find both have run out of money.
Government says elaborate arrangements would have robbed the operation of its secret nature. But maintaining secrecy of an operation and botching it are two different things. True, surprise was necessary if the operation were to have any chance of success, but that does not absolve the government of its failure to foresee the enormous challenge ahead.
Claiming the fall in violent protests in Kashmir is a result of turning the tap off on terror funding, as Defense Minister Manohar Parrikar did, shows how defensive and isolated the government has become on this issue.
