On November 8, 2016, Indian prime minister Narendra Modi announced the withdrawal of the currencies of a certain denomination out of the blue leading to mass panic and a shortage of cash. This particularly led to the human rights violation of several citizens who did not have access to electronic cash or banking services. There were widespread protests against demonetization in the country, yet the government had claimed that 90% of the country supported demonetization. PMO’s office supported this with the data by saying that 93% of the people who took a survey on the NaMo App, the prime minister’s app, supported the demonetization. However, the BBC reported that the only three options in this survey to answer the question “Do you think demonetization will bring real estate, higher education, healthcare in the common man’s reach?” were “completely agree”, “partially agree” and “cannot say”. This case will explore the demonetization related statistical disinformation that was shared to influence public opinion.
Context:
On November 8, 2016, Indian prime minister Narendra Modi announced on live television that all 500- and 1000-rupees notes will be banned in 4 hours’ time. The main reasons given by the government were as follows:
- To tackle widespread corruption and black money
- To tackle cross border terrorism. To quote Mr. Modi, “Enemies from across the border run their operations using fake currency notes. This has been going on for years. Many times, those using fake five hundred- and thousand-rupee notes have been caught and many such notes have been seized
Modi claimed that the magnitude of cash in circulation is directly linked to the level of corruption. He further observed that money earned through corruption increases inflation and reduces the purchasing power of the poor. He also connected black money to illegal trade in weapons and elections. Modi also announced certain actions such as giving citizens a 50-day period to deposit the notes in banks and post offices to minimise their difficulties. He further said that the Reserve Bank of India (RBI) will be issuing new 2000 rupees and new notes of 500 with new design will be introduced. Modi appealed to the citizens to be part of this grand sacrifice of cleansing the country as they cleaned surroundings during Diwali as well.
The impacts of demonetisation in the Indian economy is heavily contested with supporters of the move claiming that the overall impacts were positive and critics claiming that the overall impacts were negative. However, what can’t be denied is that this unprecedented move threw the country into a panic situation especially impacting those without financial literacy, digital financial literacy and access to formal banking systems. According to the critics, demonetisation led to the death of over 100 people while waiting in queues, over stampede, etc. However, the BJP-led government only acknowledged four deaths.
It must be noted here that BJP came into power in the backdrop of the India Against Corruption (IAC) movement, that channelised anger against alleged corruption by the congress government into a movement. It led to the formation of Aam-Aadmi Party (AAP) by Arvind Kejriwal, a leader of the IAC movement. In the aftermath of the protests, AAP came into power in Delhi and BJP decimated congress and came into power at the union level. However, early leaders and later dissidents of IAC movement, later claimed that the movement was orchestrated by the BJP.
Actors
BJP IT cell spearheaded by Amit Malaviya was a prominent player in shaping the narrative. Mr. Malviya describes himself as in charge of BJP’s national information & technology department ( popularly known as BJP IT cell) For example, Nobel prize winner Richard Thaler was misquoted as supporting demonetisation by Amit Malaviya while a part of his tweet was selectively discarded.
Rightwing magazine OpIndia claimed demonetisation reduced left wing terrorism.
State bank of India estimated that at least 2.5 lakh crore won’t come back into the banking system ( report published on First Post) https://www.firstpost.com/business/demonetisation-rs-2-5-lakh-crore-wont-come-back-into-banking-system-says-sbi-3137058.html
While people experienced difficulties, Modi in an emotional speech, asked voters to bear the pain and give him 50 days. He also invoked his humble background in the speech. However, even after 50 days, there were long queues in front of ATMs that often ran out of money.
Behaviour
Evidence of a well-coordinated effort at trending ‘Demonetisation Success’ is visible even today in Twitter
A coordinated campaign also took place after the Reserve Bank of India report that made it evident that demonetisation was not an effective measure to counter black money as seen in the screenshots gathered by the Wire.
Content
There was anger against the perceived elite. There was an attempt to paint those who opposed demonetisation as corrupt.
There was happiness expressed over people being caught
Degree
All social media platforms including Facebook, WhatsApp , YouTube, Twitter were used to spread the narrative. Additionally, official channels such as the press information bureau and mygov India were also used. Digital media and News channels were also used heavily. However, WhatsApp fake news were more outrageous (such as claims of GPS chips in the new notes) and less statistical.
Effect
The narrative building around demonetisation ensured political success for BJP despite the hardships suffered by the citizens of India. Political theorist Pratap Bhanu Mehta wrote that “It signifies the arrival of a new kind of politics that will redefine the relationship between citizen and state. “He further elaborated that “This is politics as a vast morality play whose three central elements are personification, puritanism and punitive imagination.” He warned of the institutional imagination that underlies demonetisation that will unleash the state on the citizens in the name of protecting their virtue. This politics of asking citizens to make a sacrifice, to be part of a movement, emotional appeals by the leader were all repeated again during the covid lockdown in India. After the lockdown was suddenly announced, citizens were again asked to sacrifice, to clap and to light diyas making them feel part of the movement despite the unpreparedness of the government.
Critical response:
While the government’s claims over shell companies seems true, 4000 crore nowhere makes up for the nearly 1 lakh crore ( conservative estimate as per economic survey ) GDP loss due to demonetisation https://economictimes.indiatimes.com/news/economy/policy/demonetisation-all-cost-and-little-benefit/articleshow/65639832.cms
Additionally, experts pointed out that most of the black money is kept in the form of land, buildings or gold or kept abroad. What is in cash constitutes only 4% of the total amount of black money on which taxes are not being paid.
An alt news report however, debunked it. https://www.altnews.in/debunking-false-narrative-around-impact-demonetization-naxal-violence/
According to the RBI reports itself, demonetisation did not impact fake currency.
Wire report, citing RBI “While 6,453 pieces of fake Rs 50 notes were detected in 2015-16, this number jumped to 9,222 in 2016-17 and then increased to a whopping 23,447 in 2017-18.”
Even Richard Thaler, whose initial endorsement of the move was widely shared by the supporters of demonetisation, turned a critic when he learnt that a new 2000 rupees note was introduced. However, his negative comment was not shared by the prominent supporters including Amit Malviya despite being pointed out.
Most interestingly, alt news exposed a google doc with trending instructions for demonetisation success pointing towards an influence operation.
Alt news video exposing it:
However, as per RBI reports, 99.3% of the demonetised currency or roughly Rs 15.31 lakh crore was returned. Essentially, the RBI report itself contradicts most of the claims made by the Modi government in favour of demonetisation.
Diagnosis: Influence operation with elements of misinformation and disinformation both.
| Actor | Government of India, Reserve Bank of India, Right wing supporters, mainstream media, BJP IT cell, Op India, State Bank of India Fact checking website – Alt News, opposition politicians, left leaning media – Wire, Scroll |
| Behaviour | No hiding of the identity as it was considered as a legitimate sacrifice to be done by the countryMisrepresentation (e.g. Nobel laureate economost’s tweet was misrepresented despite being called out) Infrastructure: IT cell, govt machinery, central bankers, NaMo App Anger against the eliteHappiness at people being caught. Repeated broadcast of such images assured common people demonetisation was a righteous cause even when they were suffering. |
| Content | Unsubstantiated claims that were later proved to be false, however, some facts were also published. While the old claims persisted, when it was counted as a success, the discourse became around cashless economy, and digitisation thus shifting the goalposts. Similarly, small fries getting hurt and caught as shown as narrative success influencing the popular imagination and feeding the anti-elite sentiments. While there was an increase in tax compliance, that does not indicate reduction in black money. |
| Degree | Well-coordinated with evidence of IT cell involvement. Audience: general public, especially aimed at middle class and poorPlatforms: almost all social media including Twitter, FB, Whatsapp, Press Information Bureau official, pro-government channels and mediaLarge scale |
| Effect | Society is divided on benefits and goods even after six years of demonetisation; sharp polarisation. However, the PM was firmly positioned as a champion of the poor who will defend India against the corrupt and the elite and won’t hesitate to take tough actions. Increased financial digitalisation. BJP won UP election with people even those suffering under demonetisation voting for him. GDP loss; destruction of handicrafts and increased suffering in the msme sector |
Conclusion:
Widespread adoption of digital financial services is often pointed out as a success of demonetisation. It is undeniably true. However, it is equally true that it failed in the original claims it made – black money, corruption, reduction of terrorism etc. At the end of the day, Indians were only too happy to suffer if they thought their rich neighbour would suffer more. The leader who asked them to sacrifice, who asked them to become part of a movement, only became more dearer to them.