In 2014 the GOI launched JDY, its ambitious push to financial inclusion, and with concerted planning and large-scale implementation, some 23 crore accounts were opened, greatly increasing the banked population of India. I was impressed at the scale of the operations and whatever the hiccups and issues, by and large the scheme did help people enter the banking system.
Hence my confusion and bewilderment at this demoniacal attack on our currency this last one month.
At 9:45 pm on Nov the 8th I remember messaging some colleagues and friends that the whole thing sounds like a hare-brained idea and I did feel the GOI was either smoking something or adversely affected by the Delhi pollution. I say this because even at that time it seemed like some Tughlakian idea to me that a country would render its currency illegal overnight.
Since then, I have followed with interest, the framing of the government's communications and the reality on the ground as a lay person from the communication industry. And the din has not been acche, for my ears at least.
(Aside - beats me how PayTM ran that two page ad with the PM's pic on Nov 9th. That would make an amazing case study worthy of an industry Effie for sure. Keep in mind, the use of the PM's picture needs special permissions, which is a tortuous process in normal circumstances. And of course that regular material deadline for advertising for media agencies is midnight at the max. So four hours to create the ad, get permission, buy space and deliver the material, wow!)
The PM's speech outlined two objectives - the rooting out of black money and the removal of counterfeit notes that were adversely affecting our fight against terrorists. (Do remember there was no mention of moving India to a cashless economy at that stage)
The black money battle
Perception framed by government communication: Cash = black money, so let's all starve the evil buggers of their cash, and yes that's the end of their black money. What's a little inconvenience in the face of this great gain?
I found it interesting that in the PM's description of the problem he pointed at government officers with cash under the bed, while glossing over the biggest source of corruption - politicians and elections.
He asked us all to bear the inconvenience for the greater good, and citizens for the most part were convinced that this must be a good way to fight black money. He enlisted us in this battle and we felt empowered, proud and victorious even as we stood in lines to get access to our own money.
Some facts -
# Black money as cash is only 6% of the stash according to several estimates
# The cash removed out of the system is 86% by value
# Demonetisation at best is is like band aid, quick fix and not a measure which addresses the systemic problems that have allowed black money to run a parallel economy
# Introducing a 2000 Re note flies in the face of this whole rooting out black money as now the suitcases required will be halved isn't it?
I thought that if the GOI was serious about the drive against black money, wouldn’t it be more “bold” to look at surgical strikes against political party accounts and their auditing, and the real estate and jewellery industries? Why this carpet bombing involving every Indian citizen? But carpet bombing delivers shock and awe.
Final effect- lets assume we remove the 6% of black money that was cash. (I am of course ignoring the raging hawala and other scams that are probably brewing. ) 6 percent removed for this fiscal, mind you.
Collateral damage - 1% GDP?
Worth it? Majority of Indians think so. Despite these “facts”, despite the inconveniences, despite the loss to businesses, surveys show that 87% of Indian we are told back demonetisation. (No, this is not the Modi survey but the C Voter One reported in the Huff Post. http://www.huffingtonpost.in/2016/11/22/huffpost-bw-cvoter-survey-87-indians-think-demonetisation-is-h). And most importantly, 70% respondents felt it would help the BJP in forthcoming polls!
Counterfeit notes
Perception framed by government communication: terrorists from across the border are counterfeiting our money and this is financing the increased violence targeted at our armed forces and civilians.
Facts -
#RBI reports that of the 8.45 lakh crores deposited until 27th Nov fake currency was 9.6 crores which is what .001% or something. Any little terrorist financing removed is of course good news but doing it before the winter passes freeze just gives them time to regroup isn't it?
# The new 2000 Re note has no special security features (remember all those whatsapp forwards with the embedded-chip notes?) making this whole stated objective hollow and meaningless wouldn’t you think?
# The press subsequently reports news of dead terrorists with new notes on them. Either they were not terrorists or the new notes have already been faked or they have been able to get their hands on the new notes faster than you and me.
Final effect- bafflingly ineffective against stated objective or am I not seeing something?
What really then was demonetisation all about? Didn't the GOI which did such a good job on the JDY, not know these things? I find that hard to believe that in an important 'bold' move like this the GOI was unaware of the planning needed nor that there were some basic logical flaws in the move itself.
So the only conclusion I would draw is that the RBI (The Mystery of the Unavailable Urjit) and the experts were not consulted or that they were and there is some other objective. Now we come to the more recently stated objective - the move towards digitisation and cashless economy. So by pulling the cash from our wallets by force the only people laughing all the way to the bank are the digital service providers. (Even the bank staff on the ground are not laughing as they have the unenviable job of implementing this with their hands tied and their eyes blindfolded and the goal posts changing everyday. )
Any communication professional will tell you that to be effective, communication has to move people. Emotion wins nine times out of ten. And the messenger has to be credible. Perception trounces fact.
By plugging demonetisation as a personal and emotional battle against black money, this has been a masterful campaign, ensuring that we buy the promise. A superbly effective communication campaign of a brand promise of a flawed product, with a great brand ambassador. So while economists of all hues wring their hands and throw up facts, the perception battle for hearts and minds has been won. The age-old hero archetype has been played out. The dragon of black money being attacked with the weapon of demonetisation. We all need to align ourselves in this epic “battle”, either for the Hero or the villainous black money hoarders.
There is much to learn regarding the new methods and channels of communication, managing perceptions and maintaining credibility. At the moment Acche Din continues to ride. Or so it seems. As The Economist noted, "Trust is fragile, and precious".
It remains to be seen whether it will all unravel or whether we will continue to believe.
Hence my confusion and bewilderment at this demoniacal attack on our currency this last one month.
At 9:45 pm on Nov the 8th I remember messaging some colleagues and friends that the whole thing sounds like a hare-brained idea and I did feel the GOI was either smoking something or adversely affected by the Delhi pollution. I say this because even at that time it seemed like some Tughlakian idea to me that a country would render its currency illegal overnight.
Since then, I have followed with interest, the framing of the government's communications and the reality on the ground as a lay person from the communication industry. And the din has not been acche, for my ears at least.
(Aside - beats me how PayTM ran that two page ad with the PM's pic on Nov 9th. That would make an amazing case study worthy of an industry Effie for sure. Keep in mind, the use of the PM's picture needs special permissions, which is a tortuous process in normal circumstances. And of course that regular material deadline for advertising for media agencies is midnight at the max. So four hours to create the ad, get permission, buy space and deliver the material, wow!)
The PM's speech outlined two objectives - the rooting out of black money and the removal of counterfeit notes that were adversely affecting our fight against terrorists. (Do remember there was no mention of moving India to a cashless economy at that stage)
The black money battle
Perception framed by government communication: Cash = black money, so let's all starve the evil buggers of their cash, and yes that's the end of their black money. What's a little inconvenience in the face of this great gain?
I found it interesting that in the PM's description of the problem he pointed at government officers with cash under the bed, while glossing over the biggest source of corruption - politicians and elections.
He asked us all to bear the inconvenience for the greater good, and citizens for the most part were convinced that this must be a good way to fight black money. He enlisted us in this battle and we felt empowered, proud and victorious even as we stood in lines to get access to our own money.
Some facts -
# Black money as cash is only 6% of the stash according to several estimates
# The cash removed out of the system is 86% by value
# Demonetisation at best is is like band aid, quick fix and not a measure which addresses the systemic problems that have allowed black money to run a parallel economy
# Introducing a 2000 Re note flies in the face of this whole rooting out black money as now the suitcases required will be halved isn't it?
I thought that if the GOI was serious about the drive against black money, wouldn’t it be more “bold” to look at surgical strikes against political party accounts and their auditing, and the real estate and jewellery industries? Why this carpet bombing involving every Indian citizen? But carpet bombing delivers shock and awe.
Final effect- lets assume we remove the 6% of black money that was cash. (I am of course ignoring the raging hawala and other scams that are probably brewing. ) 6 percent removed for this fiscal, mind you.
Collateral damage - 1% GDP?
Worth it? Majority of Indians think so. Despite these “facts”, despite the inconveniences, despite the loss to businesses, surveys show that 87% of Indian we are told back demonetisation. (No, this is not the Modi survey but the C Voter One reported in the Huff Post. http://www.huffingtonpost.in/2016/11/22/huffpost-bw-cvoter-survey-87-indians-think-demonetisation-is-h). And most importantly, 70% respondents felt it would help the BJP in forthcoming polls!
Counterfeit notes
Perception framed by government communication: terrorists from across the border are counterfeiting our money and this is financing the increased violence targeted at our armed forces and civilians.
Facts -
#RBI reports that of the 8.45 lakh crores deposited until 27th Nov fake currency was 9.6 crores which is what .001% or something. Any little terrorist financing removed is of course good news but doing it before the winter passes freeze just gives them time to regroup isn't it?
# The new 2000 Re note has no special security features (remember all those whatsapp forwards with the embedded-chip notes?) making this whole stated objective hollow and meaningless wouldn’t you think?
# The press subsequently reports news of dead terrorists with new notes on them. Either they were not terrorists or the new notes have already been faked or they have been able to get their hands on the new notes faster than you and me.
Final effect- bafflingly ineffective against stated objective or am I not seeing something?
What really then was demonetisation all about? Didn't the GOI which did such a good job on the JDY, not know these things? I find that hard to believe that in an important 'bold' move like this the GOI was unaware of the planning needed nor that there were some basic logical flaws in the move itself.
So the only conclusion I would draw is that the RBI (The Mystery of the Unavailable Urjit) and the experts were not consulted or that they were and there is some other objective. Now we come to the more recently stated objective - the move towards digitisation and cashless economy. So by pulling the cash from our wallets by force the only people laughing all the way to the bank are the digital service providers. (Even the bank staff on the ground are not laughing as they have the unenviable job of implementing this with their hands tied and their eyes blindfolded and the goal posts changing everyday. )
Any communication professional will tell you that to be effective, communication has to move people. Emotion wins nine times out of ten. And the messenger has to be credible. Perception trounces fact.
By plugging demonetisation as a personal and emotional battle against black money, this has been a masterful campaign, ensuring that we buy the promise. A superbly effective communication campaign of a brand promise of a flawed product, with a great brand ambassador. So while economists of all hues wring their hands and throw up facts, the perception battle for hearts and minds has been won. The age-old hero archetype has been played out. The dragon of black money being attacked with the weapon of demonetisation. We all need to align ourselves in this epic “battle”, either for the Hero or the villainous black money hoarders.
There is much to learn regarding the new methods and channels of communication, managing perceptions and maintaining credibility. At the moment Acche Din continues to ride. Or so it seems. As The Economist noted, "Trust is fragile, and precious".
It remains to be seen whether it will all unravel or whether we will continue to believe.
