The move can turn out to be a risk for him.
Usually politicians are unpredictable, but in the sub-continent entire political scenario is more erratic. The surprise and fluidity factor in politics can provide good political dividends to politicians, but ultimately the quality of leadership and authority get vastly compromised. Narinder Modi from the days of his stint at Gujarat as Chief Minister has been an out of the crowd politician and presently for the last two and half years as Prime Minister of India his volatile politics and political nature has created waves in Indian politics. He, not only surprises his co-politicians and rivals, but at occasion shocks the whole nation.
Demonetisation till date can be termed as most swift and unpredictable political and administrative decision of Narinder Modi, surprising all. With huge risk attached to it, Demonetisation is a big gamble that can either make Modi a messiah or will turn him into a monster. Most politicians toeing Modi line describe Demonetisation as cleanup operation against corruption and parallel economy governed by black money. But, the fact is that somewhere in the back of their mind the looming crucial elections of Utter Pradesh and Punjab, politically vital and influential states have dominated the Demonetisation decision. Modi-ji as overenthusiastic politician, always wants to do something unique—throw political bombshells. And Demonetisation is a big political bombshell with dual purposes of initiating scathing attack against corrupt and harvest its bonus (if any) to influence coming elections and boost his personal image.
By all means Demonetisation is a hypothetical decision. Many economists and monetary experts will challenge my authorizations for using the word ‘hypothetical’. However, the assumption angle in this whole story comes into application because of the unique black-money ‘keeping’ behavior of this vast nation’s corrupt, tax evaders and dishonest. Investing in real-estate, gold and stashing of hard cash in higher denominations are three main areas of parking ill got money. Some high profile people prefer depositing their huge black money in financial heavens out of country. However, Present exercise of Demonetisation will cover only high denomination currencies stashed in closets or secure depths by not so experienced hoarders and political parties and individuals who require ready cash to cover their political agenda and dubious elections. Obviously, with huge infrastructure, sweeping powers and best human resource at his command Modi-Ji before giving a nod may have done meticulous analysis of his (ill or well) conceived hypothesis and deliberated upon in detail regarding pros and cons of Demonetisation. But at the end of the day theoretical estimations have to pass through several tests before getting materialized to the choice of its champion, that too in a country like India, where after every thirteen kilometers not only the linguistic accent changes, but the mindset of whole community behaves differently. Modi-ji has no saintly powers or a magic wand to accurately assess the quality and quantity of black money, so his exercise by all means depends on hypothetical assumptions and involve a huge risk.
Most commentators discussing Demonetisation expect unaccounted currency between five and fifteen percent and if these estimation prove right then Modi will easily sail with his Demonetisation mantra and will rightly claim proprietary rights over his hypothesis. He will easily be able to give a flip to his supposed plans of recharging much talked about millions of ‘Jan Dhan’ accounts of poor Indians with cash rendered irrelevant after expiry of surrender date and will make a fool of all his critics and detractors.
And if all does not go as per supposition of Demonetisation advocates and will yield only a fraction of estimated black currency after stirring the whole nation and its economic and financial setup; what will be the outcome? Now let us make a parallel assumption. If True to ‘keeping’ behavior of Indian corrupt, most of the black money is found invested in other ventures of real estate, gold and foreign tax-heavens and stashing will not touch desired targets. Further, if most of the remaining Indians with stashed black money will adhere to much cherished adage—‘baghtay choor ki langoot hee sahi’ and use the amnesty choice; opt for declaring their unaccounted money, pay penalty. Such situation will decrease estimated results further by several notches and all estimations, assumptions governing much hyped Demonetisation covering more than eighty percent of currency in circulation will fall apart! A situation like that will prove disastrous; rather will oblige Narinder Bhai Modi to meet his Demonetisation Waterloo.