Has euphoria in Uttar Pradesh over fighting black money turned into disappointment?


Baghpat, Shamli and Sardhana (Uttar Pradesh): Ved Pal, a 35-year-old farmer from the village of Bodda in Baghpat district, thinks demonetisation was the right thing to do even if its immediate aftermath was painful.

“Any new work undertaken by any individual or government will always face problems; so demonetisation was no different,” Pal said. “People faced problems but it was a correct step by the government to end black money.”

On the eve of the first anniversary of the note ban, which took out 86% of the currency in circulation by value and triggered a nationwide cash crunch, there is still popular support in Uttar Pradesh, India’s most populous state, for Prime Minister Narendra Modi’s audacious move.

That support manifested itself in the February-March assembly elections which Modi’s Bharatiya Janata Party (BJP) won to return to power in the state after a gap of 15 years.

The voters rewarded it with 312 seats in the 403-member assembly, seeing the note ban as part of the fight against corruption and black money.

“There is no doubt that we had to face some difficulties but our work got done. It was a good step in the right direction,” said Sunil Kumar, 40-year-old farmer from Shishana village in Baghpat district. “I am a farmer, my money is safe in the bank. We didn’t lose any money.”

Not that people have forgotten the hardship they experienced in the aftermath of the note ban, which was followed by an unprecedented cash crunch that was especially harsh on rural Indians with limited access to banks and automated teller machines.

And some are asking if the government’s action had actually ended the menace of black money, or unaccounted money hidden away from the taxman.

Mohammed Shadab Khan, a 23-year-old tailor, said he was in Dubai at the time and couldn’t change the Rs6,000 that was lying in his house in Therki village, which is part of the Sardhana assembly constituency in Meerut district. Niami Khan said he had to borrow money and limit the expenses for his daughter’s wedding.

“The situation is now better. But at the time of demonetisation, we could not withdraw our own money. We were not getting daily wages and the situation improved only after 5-6 months,” said 50-year-old Bhanwar Singh, a landless farmer. “The biggest problem now is the Rs2,000 currency. It is difficult to get change for such a big currency note. We live in a small village; the government should do something about these new notes.”

Small businesses complain that their orders have dwindled because of the note ban and the 1 July implementation of the goods and services tax (GST).

“Honestly, there is no business. We pay so much tax but hardly get any facility from the government. Our business has crashed,” said Suresh Pal, 52, who owns a brick kiln in Bhabhisha village of Shamli district. “Earlier we used to sell 1000 bricks for Rs4,500-5,000 but now the rates have fallen to Rs2,600 for 1,000 bricks.”

He added: “The government wants us to do business through cheques but we live in a small village; nobody accepts cheques, labourers want cash.”

Another brick-kiln owner in the area complained of similar problems.

“If this situation continues for one more year, we will be forced to beg,” said Rishpal, a 45-year-old resident of Bhabhisha. He is also disgruntled, saying: “We are all educated people, we read newspapers. There are stories how the corrupt managed to change their illegal money.”

8 November, the first anniversary of the note ban, is being observed by opposition parties as black day.

The BJP is celebrating it as “anti-black money day”. Senior ministers in the central government are to visit different parts of the country and spread awareness about the long-term benefits of the government’s fight against black money.

Uttar Pradesh was crucial in bringing the BJP back to power at the centre in 2014 after a 10-year gap, giving the party 71 out of the 80 seats it has in the Lok Sabha. The support of its voters will be equally critical in the next general election in 2019.

One BJP leader from Uttar Pradesh concedes that demonetisation could have been handled better, but claims the move still has popular support.

“There are two sides to demonetisation. The first is the administrative part and it is possible that the Union government could have been more prepared before implementing the decision because it would have helped people,” this politician said on condition of anonymity.

“The second part is to make people psychologically prepared for decision of this magnitude… Having said that, there is no doubt that people supported the anti-corruption and anti-black money decisions of Prime Minister Narendra Modi and the intent of the Union government in dealing with the problem.”

Political analysts feel there is a sense of dissatisfaction with the Union government on demonetisation though the political dominance of BJP continues.

“There is no doubt that people are dissatisfied because of demonetisation. When it was announced almost one year ago, there was euphoria but now it has become a disappointment. But this sense of disappointment or dissatisfaction is not big enough to politically damage BJP nationally or in Uttar Pradesh,” said Sanjay Kumar, a political analyst and director at the New Delhi-based Centre for the Study of Developing Societies.