Demonetisation: The euphoria, pains and pitfalls of establishing Ramrajya

Updated: December 9, 2016 4:20:10 PM

The idea of Ramrajya is so powerful that masses remain inspired by it even though they have been exploited and betrayed by the rulers of the past. Ramrajya, in reality, may be a utopia but masses have a fairly definitive and practical image of it.

In establishment of RAMRAJYA, we all dream of an equitable and harmonious society with leaders that symbolizes fortitude, honesty, justice and hope. (Reuters)In establishment of RAMRAJYA, we all dream of an equitable and harmonious society with leaders who symbolize fortitude, honesty, justice and hope. (Reuters)

The idea of Ramrajya is so powerful that masses remain inspired by it even though they have been exploited and betrayed by the rulers of the past. Ramrajya, in reality, may be a utopia but masses have a fairly definitive and practical image of it. In establishment of RAMRAJYA, we all dream of an equitable and harmonious society with leaders who symbolize fortitude, honesty, justice and hope.

In the last election, Narendra Modi portrayed himself as a messiah of the masses and promised to eradicate corruption, demonstrate fortitude in decision making and work for development of all. People bought that promise and voted him to power. It is now Mr. Modi’s turn to demonstrate that their trust was not misplaced.

In the last two and half years, he may have been busy with the house keeping. Besides, he needed to spend time on ‘systemic’ understanding of the current state before taking up substantive issues.

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Public knows that the Demonetization is one such initiative that would work towards building a corruption free country and being systemic in nature it demands careful planning and flawless execution.

To explain, what is involved in effecting a change at this scale, let us first look at the demonetization and its objective from a change management perspective. The main goal is to eliminate black money and fake currency and to attack all the institutions that are cash driven, increase the taxnet to generate funds for infrastructure and use it for welfare of low income group and to demonstrate the leadership to be honest, forthright and determined towards its promises to people.

The initiative becomes more complex with the multiplicity of the stakeholders from Government to opposition, financial institutions to corporates and citizens. However, one of the most difficult aspects of change management is to change the mindset of people because human mind is designed to trigger ‘change inertia’ and insist on maintaining status quo. Change management requires them to be motivated in favour of the change and contribute towards it.

Post the announcement of demonetisation; we have witnessed ample patience from public in the hope of seeing elimination of corruption. As demonetisation progresses, people expect this to lead to a corruption free society. This is scary expectation of which the leadership must make a serious note.

The two critical pillars of implementing an initiative of this scale is communication followed with prompt action and onground execution. Hence, this also commands the presence of a credible leader – if not at least a perceived one.

A leader who is infallible, altruistic, ascetic must have the ability to passionately communicate the mission and the objectives to the stakeholders with clarity and flair.

In the past, we have had leaders like Pandit Jawaharlal Nehru, Indira Gandhi and Jayaprakash Narayan who were able to sway the masses by their vision and communication but fell short in execution. We had Manmohan Singh, an honest, intelligent and eminent economist at the helm but did not possibly have the freedom to strategise nor ability to communicate and execute.

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Mr. Modi fits the role well. He is perceived to communicate with conviction, sounds credible and is believed to be ruthless in execution. In summary, he seems to have enough qualities for masses to idolize him. I am not advocating that he will be the one who will deliver Ramrajya, but he fits in the image of a messiah well.

Anticipation, planning and preparation are the essential ingredients of implementation. It is well understood that secrecy and suddenness are key to the success of demonetization. Yet, to imagine that the Government did not assemble a competent large enough team conversant with the change management complexities of such an initiative because it could not trust them, does not speak well about the leadership.

The implementation team should have worked on real data as well as assumed scenarios to anticipate all situations across all the stakeholders. For example, some of the rules that got modified within a week could easily have been anticipated and included during the announcement.

Public opinion building is accomplished by direct contacts, newspapers, television and social media etc. However, in order to effectively execute this initiative, the Government has to continually and carefully monitor the hardships of people arising out of their action, such that the inconvenience faced by people does not exceed the enthusiasm generated by the larger objective.

On the other hand, it would not be wise to push the cash in such abundance that people reach their comfort zone of business-as-usual and abandon the technology adoption all together. The think tank must carefully solve the conundrum to arrive at an optimum solution.

A very important of this conundrum which economists ignore is the influence of technology on their known models. Never before had technology made such impact on population as it is making now.

I have heard arguments that since developed countries like USA and UK still use cash extensively; we cannot talk about minimizing its use. While raising such doubts we should not forget countries like Kenya or Bangladesh with their mobile wallets, M-Paisa and bKash. It is notable that a country like Nigeria has definitive plans to completely go cashless.

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In India, with nearly every family having a bank account, a population of 80 crore debit /credit card holders, micro ATMs, mobile wallets and non-cash transaction facilities, we should be able to minimize the circulation of cash. In order to make this happen, we must introduce a policy to limit the amount of daily cash withdrawals, but all this not without taking direct inputs from the people.

The leadership has to continually engage with people, taking their inputs, advice and incorporating their opinion in its plans.

Leadership also needs to keep a check on the elements of its machinery that would be entrusted to implement the plans. For the process, equilibrium among the stakeholders is bound to get disturbed and the people in powerful positions would be desperate to materially maintain their lifestyle.

This, in my opinion, is the greatest risk in realizing the dream of, Modirajya.

Written by- LC Singh, Vice Chairman & CEO (Founder) at Nihilent Technologies

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