Modi's Trump Card: Demonetisation

Demonetisation is a dramatic Modistroke. And well-timed too, ahead of crucial polls.

- Bhavna Vij-Aurora

It was barely a few hours before his address to the nation on November 8 that Prime Minister Narendra Modi took his cabinet colleagues into confidence about his dramatic decision to demonetise Rs 500 and Rs 1,000 currency notes. All senior cabinet ministers had been told to leave their mobile phones outside: it was in this secured environs that the prime minister shared his ambitious plan to curb black money and corruption with them, one that would be the talking point all over the country for days to come.

It was a momentous decision that sent shock waves down the whole system—as it was intended to do. The late evening announcement, and the narrow window offered before the order was to take effect, meant just about everybody was caught off-guard. Many wondered whether his move to bolster economy would pay off. But, in one fell swoop, Modi had sought to burnish his image as a decisive leader—a man given to big ideas and bold strokes— something that made him a hero of the middle class with a massive electoral mandate two-and-a-half years ago.

And this was an issue that resonated widely with that class. Not just that, there was some serious tactical leverage to be had beyond India’s urban centres and its black money hoards. Significantly, the initiative comes only a few months before crucial assembly polls in Uttar Pradesh and Punjab, where huge amounts of illicit funds are believed to be in circulation.

Sources close to the government let on that the demonetisation policy—pitched as a ‘surgical strike’ against black money, corruption, and fake currency notes that fund terror—was being evolved quietly for over six months. In hindsight, many of Modi’s colleagues in the party and government say there indeed had been straws in the wind about the ‘historic’ decision.