Ever since PM Modi announced demonetization of high value currency notes on 08 November, experts and media have said and written a lot, some to glorify and some to vilify it. All economies have shades of white, grey and black. The white economy runs through banks/payment gateways, grey economy includes the informal, business and rural cash transactions, while the black economy includes hawala and money laundering cash transactions. The white economy is within the ambit of tax collectors, but the intention of people indulging in both grey and black economies are largely to hide earnings and evade taxes. This shadow economy has been assessed at 18-25% of our GDP. The demonetization is just part of the war that has been launched against the corrupt and black marketers.
In times of war, it is not only the military that fights. The entire nation does it by rallying behind its military in every conceivable way. Accordingly, this is not Modi’s or his government’s war, but our righteous war against black money and corruption, which our elected leader has launched on our behalf. Our participation in this is not a matter of choice but a necessity.
For any battle plan to succeed, it must be simple, boldly executed and conform to basic tenets of warfare. Foremost amongst these tenets is selection and maintenance of aim. Undoubtedly, the aim in this battle is unambiguous and the PM clearly conveyed the government’s commitment to maintain it, “This is not the end but only a beginning of our struggle”. Next is the element of secrecy and surprise, which was complete in this case with information shared on a need to know basis amongst a handful. Timing is another important principle. Some politicians and analysts have commented on the plan’s poor timing due to festive season and imminence of crop change. To rebut their arguments, suffice to quote American General Patton’s famous remark, “A good plan violently executed right now is far better than a perfect plan executed next week”. Another allegation is the ill conception of the plan and its shoddy implementation. Since no plan stands contact, flexibility is the precept that helps military leaders to modify their plan according to the unfolding battle situation. The leaders or policy makers in this case conceive and formulate plans and policy decisions that various battle groups or agencies then execute or implement. The leaders monitor the progress of battle to apply mid-course correction or modify the plans according to the developing situation. This is exactly what the government is doing during the implementation phase. It is closely monitoring the situation, issuing corrective directions, increasing or decreasing cash limits of withdrawal, and making additional resources available for critical areas. Another important battle winning principle of war is maintenance of morale and absence of agitations and riots indicate our citizens’ high morale to undertake the hardships caused by demonetization. Maintenance of this exemplary morale will be crucial in times to come and can be achieved bypassing down tangible positive gains to the citizens in near-term like tax relief in the forthcoming budget.
In conventional warfare, the army, navy and air forces synergise their efforts through joint operations for achievement of the overall aim. In this operation too, the joint efforts of the public, banking sector, law and tax enforcement agencies, and the finance ministry have borne fruits to garner over Rs 5.5 lakh crore cash. Psychological warfare, to undermine the enemy’s will and capacity to resist, is another important battle-winning factor. No leader aims to achieve victory in battle through total annihilation of the enemy forces since it also inflicts prohibitive men and material losses on his forces. He achieves it through psychological dislocation or paralysis of the enemy, thus compelling him to surrender. To achieve such psychological paralysis, the leader uses speed and swiftness of manoeuvre, violent and relentless firepower, and faster decision making to break the enemy’s OODA (Observe, Orient, Decide and Act) loop. Without a doubt, Modi and his government manoeuvred swiftly and speedily without giving time to the black marketers and the corrupt, they must now relentlessly use all available firepower (statutes and enforcement measures) to compel them into capitulation.
Are there any softer options in military confrontations? So why should we look for softer options to fight this war. Demonetization is just one of the battles in this war, the other being the battle to gain access to the details of Swiss Bank accounts held by Indians. The proceedings started by this government,soon after coming to power, has now resulted in signing of a Indo-Swiss Pact on 22 Nov 16 to exchange bank information.To bash on regardless in this righteous war, the government must persist and ruthlessly wage battles against benami properties, hawala racketeering, political campaign and party funds, illegal gold bazaar and informal cash economy. We as citizens must help the cause by insisting on bills for purchased goods, dealing clean through cheques/cards and reporting bribe seekers to the concerned authorities. In this long drawn war against corruption and black money, losing a battle or two is inconsequential as long as we win this war to disprove allegations of it being a quixotic quest.