How demonetisation, GST and Aadhaar united the Left, Right and Centre in India
A shared concern for civil freedoms has created an unusual anti-Modi coalition.
Himanshu Sharma/REUTERS
It is rare to suffer a double shock on a single day of the kind we experienced on November 8, 2016. That night, India’s Prime Minister Narendra Modi announced a crazy plan to replace high denomination currency notes, and citizens of the United States elected a man who will almost certainly be remembered as one of the nation’s worst presidents.
Experts on the Left, like Amartya Sen, Jean Dreze and Prabhat Patnaik, criticised the note swap, but their arguments, however sound, could be dismissed as the rationalisations of those who would oppose any policy proposed by Modi. These critics were joined by a number of free market enthusiasts, who saw the move as at best a misguided attempt at uncovering illicit wealth and at worst a vicious attack on private property. Ajay Shah and Ila Patnaik of the National Institute of Public Finance and Policy, Devangshu Dutta and Amit Varma were among such critics.
Sadanand Dhume, a keen supporter of the Modi government in its initial years, who contributes regularly to the Right-wing Wall Street Journal, was gently sceptical at first, calling the move an “audacious gamble”, but by mid-December referred to it as a debacle.
As the lines that formed outside banks and ATMs did not recede; as the unpreparedness of the government and the Reserve Bank of India grew obvious; as new rules, U-turns and broken promises piled up; as the administration shifted the goalpost from targeting black money, counterfeiting, and terror funding to encouraging digital transactions; as the economic ramifications of the move became apparent, the unexpected coalition between the Left, Right and Centre strengthened.
Business leaders like Gurcharan Das and Deepak Parekh shifted away from their initial praise, with the latter stating “demonetisation has derailed the economy”, in an interview that was hastily taken down from the News 18 website. International observers from Larry Summers and Paul Krugman to Steve Forbes came out against the move as well. It felt like the only economists still supporting Modi’s decision were those with close ties to the regime, like Bibek Debroy, Surjit Bhalla and Jagdish Bhagwati.
The Uttar Pradesh elections in February-March 2017 proved that the public at large had taken Modi’s claims at face value. Demonetisation was, in the short run at least, a stroke of political genius. The pain it caused, however, was not forgotten.
When the administration botched the Goods and Services Tax rollout a few months later, traders were unforgiving, and a number of commentators interpreted the confusion as ineptness rather than inevitable teething pains. The Gujarat polls in December will tell us how deep the anger runs among those who have suffered a double blow.
The Goods and Services Tax consolidated the loose coalition between a certain section of the Left and Right, and this has been strengthened further by the government’s most ambitious and potentially most destructive policy: making Aadhaar ubiquitous. Aadhaar was, of course an initiative of the previous government, but under Modi a constant mission creep has transformed it from a method of reducing leakages while delivering services, to a mandatory identifier for everything from school and hospital admissions to telephone connections and bank accounts.
Dangers of Aadhaar
The technology undergirding Aadhaar is not indigenous. Despite our vaunted software skills, the core biometric identification system was set up using technology supplied by the foreign corporations Morpho and L-1 Identity Solutions. From the United Progressive Alliance days, the links these companies have with intelligence services in the United States and France have been a source of concern. These were heightened in August by a Wikileaks report suggesting the Central Intelligence Agency has gained access to the Aadhaar database.
Every day provides a new example of how gullible citizens are being defrauded by digitally savvy cheats. Every week shows us how the government cannot be trusted to keep our data private. Limitations in the identification system and short cuts taken by operators have led to a series of disasters, from starvation deaths in Jharkhand to stalled disbursals to needy farmers in Maharashtra.
The greatest threat posed by a ubiquitous Aadhaar is its potential to become the infrastructural backbone of a dictatorship. We underestimate at our peril the potential for India to take an authoritarian turn, considering how a number of constitutional authorities from the Election Commission to the Reserve Bank of India appear to have compromised their independence. That is the biggest difference between the United States under Donald Trump and India under Modi. Trump is far less qualified for office, but has been prevented thus far by a robust system of checks and balances from doing something truly dreadful.
Our Supreme Court continues to assert its independence, but has proved how justice delayed can be justice denied. Even as it upheld the fundamental right to privacy, the court, which did little to help citizens in distress through the trauma of demonetisation, has allowed the government virtually untrammelled power to impose Aadhaar linkages on the population. Even if it produces a judgement that gives relief to a few holdouts, much of the damage has already been done.
Fight for freedom
In the face of this attack on privacy and the seeding of a surveillance state, individuals with very diverse ideologies who share a commitment to civil liberties have joined together in an unspoken coalition. A number of erstwhile Modi supporters, like the chairman of the Skoch Group Sameer Kochhar who wrote the book ModiNomics, have turned anti-Aadhaar activists.
Libertarians, Left libertarians, Centrist liberals, anybody who is suspicious of excessive state power, ought to be part of this coalition. Demonetisation was a bad idea badly implemented, and the Goods and Services Tax a reasonable idea badly structured and rolled out. Aadhaar as currently conceived has the potential to become something far worse than either of these. It may well be that in a time far in the future when American historians look back on the horrors of Trump’s presidency, Modi’s reign will be remembered in India not for demonetisation and the Goods and Services Tax, but for the Frankenstein’s monster that was Aadhaar.
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