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Demonetisation a litmus test for BJP: One year on, can Modi hold his sway on the electorate?

Prime Minister Narendra Modi’s ‘surgical strike’ on black money has failed to dent his popularity among masses despite the hardships people faced. As the opposition’s attacks against demonetisation gain momentum, can the BJP hold on?

Written by: Parimal Peeyush, New Delhi [ Updated: November 08, 2017 11:10 IST ]
Prime Minister Narendra Modi’s ‘surgical strike’ on
Prime Minister Narendra Modi’s ‘surgical strike’ on black money has failed to dent his popularity among masses despite the hardships people faced.

Almost every other election that the country has seen since the Bharatiya Janata Party’s resounding ascent to power at the Centre in 2014 has been dubbed a referendum on some policy decision by the Narendra Modi-led central government or the other.

Each time around, the BJP has emerged victorious, negating the impact of some of its toughest decisions on the mindset of the electorate. Take Assembly elections in five states this year -- Uttar Pradesh, Uttarakhand, Manipur, Goa and Punjab – as an example.

ALSO READ |'Anti-Black Money Day' or 'Black Day': Did India gain from demonetisation in last one year? Here's what data suggests

Elections to these states were held soon after the note ban and were dubbed as a referendum on the government’s decision. The opposition was confident that people were angry with the Centre over demonetisation, something that sure to translate into a sure shot loss for the saffron fold.

The results, however, were anything but that.

The BJP won UP with a three-fourth majority, the biggest win for any party in the state which was among the hardest hit by the notes ban decision. It also won Uttarakhand and came in second in Goa and Manipur.

The only state it lost was Punjab where it was in power in coalition with the SAD as a junior partner. Even in Manipur and Goa, where the Congress emerged as the single largest party, it was the BJP which went on to form government.  

Even in the municipal polls held in Maharashtra in February this year, the BJP registered a historic win, bagging eight of the ten municipal corporations that went to polls.

In Brihanmumbai Mumbai Corporation (BMC) too, the richest and most prestigious corporation in the country, BJP improved its tally from 31 last time to 82 this year in a corporation of 227 seats. It was short of Shiv Sena by just two seats.

Also Read: Demonetisation was aimed at changing the way India spends money, says Jaitley

Regardless, the opposition’s attacks against the government’s decisions like demonetisation have reached a tipping point with just days before elections are held in the two crucial states of Gujarat and Himachal Pradesh.

The days leading up to the one-year anniversary of the government’s drastic notes ban decision have only seen the opposition’s attacks intensify. For the Congress, which holds power in Himachal Pradesh and hopes to halt the BJP’s over two-decade rule in PM Modi’s bastion Gujarat, the stakes couldn’t be higher.

Should BJP be worried?

Experience would suggest that decisions like demonetisation have yielded strong results for the BJP. Not to forget that the Congress and some other opposition parties questioning the Indian Army’s ‘surgical strikes’ at terror launch pads across the Line of Control only helped the BJP’s cause.

Things could get a tad trickier this time around though. The hardships people faced in the immediate aftermath of demonetisation may have faded for most, but the impact is now more visible. The RBI data has shown that almost 99 per cent of the demonetised currency has returned to the system, providing the ammo the opposition needed to renew its attack on the government.

Also Read: BJP’s win in UP, U'khand proved that people welcomed note ban: Jayant Sinha

The government has come in for some harsh criticism, with the Opposition branding demonetisation as an "ill-conceived policy decision" that led to a body blow on economic growth and overall state of the economy.

Armed with this data, the opposition will now hope that its attacks on the government would lead to a better election tally in Gujarat and Himachal. The implementation of the GST and the hardships for traders in the initial phases of the all-encompassing indirect taxation regime has sharpened the opposition’s attacks on the government’s economic policies.

State of the economy

Contrary to the government’s agenda of economic growth that saw it storm to power in 2014, the post-demonetisation period has been tough on the economy. India’s GDP dipped to a three-year low of 5.7 per cent in the April-June quarter, the slowest under the Modi government.

Other indicators like jobs, manufacturing growth, mining, agriculture and construction etc. appeared equally bleak.  Rural demand has dipped and the informal sector, which depends majorly on cash, is still to recover from the shock.

Many of these indicators were missing the last time BJP went into polls and it is here that it needs to be wary.

The BJP’s response

The BJP has responded to criticism against demonetisation with the same aggression. The central ministers and the party are on an aggressive drive to counter the opposition’s attacks with claims of demonetisation resulting in positive results.

This is one area where it needs to exercise caution. In the process of blunting the criticism against it, the BJP risks the possibility of going overboard. While it is important for the BJP to counter opposition’s agenda with facts, it should restrain from exaggeration and chest-thumping.

As far as predictions for the Congress are concerned, even top political observers would find it tough to tell whether its all-out criticism of the government’s policies would yield better votes.

As for the BJP, it has stood its ground after taking tough decisions in the past and should signal its intent on mending the damage through focus on fundamentals.

The worst may be over for the BJP but it would do well not to ignore that it was the arrogance of the Congress and its disconnect with the masses that propelled it to power in the first place.

As things stand now, Finance Minister Arun Jaitley had the apt response on the eve on the one-year anniversary of demonetisation: “Demonetisation may not be the end of corruption in India but it has changed the agenda.”

The time now is to work on the fundamentals.

Click here for full coverage on one year of demonetisation

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