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How Currency Demonetisation Will Play Out in Uttar Pradesh Polls

Uttar Pradesh Chief minister Akhilesh Yadav waves at supporters during his Vikas Rath Yatra that was flagged off by Mulayam Singh Yadav in Lucknow (file Photo: PTI)

Uttar Pradesh Chief minister Akhilesh Yadav waves at supporters during his Vikas Rath Yatra that was flagged off by Mulayam Singh Yadav in Lucknow (file Photo: PTI)

Fifty kilometers from Kanpur, in the poll-bound UP BSP leader Satish Mishra, is holding a bahichara sammelan.

Sumit Pande

Fifty kilometers from Kanpur, in the poll-bound UP BSP leader Satish Mishra, is holding a bahichara sammelan. The talk of the town this Friday afternoon is economics and not politics. Just about everyone wants to know the impact of midnight demonitisation.

There is a long serpentine queue outside a public sector bank in the heart of the town. Both Mayawati and Mulayam have called for ending this "economic emergency". Uttar Pradesh CM Akhilesh Yadav has sought further relaxation from Finance Minister Arun Jaitley in using high-value currency notes in hospitals and pharmacies till month end.

In the national capital New Delhi, BJP, however, had decided to up the ante with Party president Amit Shah almost pulling off a George W. Bush on demonetisation of high-value currency notes.

As serpentine queues outside banks and ATMs grew, Shah asked opposition parties to decide if they are with or against terror which survives on hawala transactions and black money.

The government was preparing to take harsh measures on black money was first articulated by Prime Minister Narendra Modi at BJP National executive in Allahabad earlier this year. In the closed-door meeting, he urged party men to be prepared for some harsh measures. Two and a half years after taking over the reins of power, it was a political imperative which could not be delayed any further.

Of all the poll promises, which ushered in BJP to power, perhaps, two issues struck a direct chord with the electorate: employment generation and curb on black money. That clampdown on accounted wealth would bring in fifteen lakh rupees in every bank account was embedded in the larger poll narrative.

In every assembly election that the BJP has contested in the last two years, the 15 lakh 'jumla' has reared its head all too often to the discomfiture of the top party leadership.

Arvind Kejriwal raised the issue during Delhi assembly polls, so did Nitish and Lalu in Bihar elections. And now, as one approaches UP polls, Mayawati in all her rallies has sought to know from people on promises made and kept by the Modi government in the last one year.

The midnight demonetisation of high-value currency notes aims to blunt this opposition attack which would have only grown in the days ahead. An Akhilesh Yadav would have made a comparison in his election speeches between the performances of his government in the state vis-a-vis the centre.

If nothing substantive was done, all this would have reached a crescendo by 2019.

The government, thus, has decided to bite the bullet. But there is also an inherent political risk association in a transformation of this nature and magnitude. First, the demonetization has a direct impact on the urban middle class, especially the trading and business community which has been the stock BJP vote bank.

Secondly, it is not very clear how this will play out in the rural economy, especially in the short term.

All the important players in UP have already articulated their position on the issue.

It is now for the government to deliver and people to decide.


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