In late December, Narendra Modi launched a fierce defence of his decision the previous month to scrap two of India’s highest denomination rupee notes. The Indian prime minister’s move had been staggeringly disruptive, forcing hundreds of millions of people to line up for hours outside banks. But Modi hailed it as a triumph in his battle to curtail the country’s black economy. “This is the beginning of the end of the corrupt,” he told a crowd in Mumbai, the financial capital.
Economists begged to differ. Many criticised the measure’s haphazard implementation and predicted it would needlessly dent growth. Others questioned its effectiveness as a means of targeting everyone from outright criminals to dodgy politicians, and the suitcases of illicit cash they were imagined to keep. Instead, “demonetisation” smacked of authoritarian populism: a dramatic but ineffective gesture designed to unite the angry masses against the wealthy.
If that was Modi’s aim, he has been undeniably successful. Despite the mass inconvenience, by most accounts demonetisation remains popular, a fact that only serves to illustrate the depth of public unhappiness over India’s endemic problems of graft and the political class that in many ways embodies them.
James Crabtree is a visiting research fellow at the Lee Kuan Yew School of Public Policy in Singapore, on sabbatical from the FT.
This article was first published on The Financial Times on 17th February 2017.