How PM Modi emerged as a pro poor leader post demonetisation and swept Uttar Pradesh elections

With elections in Himachal and Gujarat around the corner, the first anniversary of demonetisation has become a big political issue. The former Prime Minister Manmohan Singh termed it as ‘organised loot and legal plunder’, while the finance minister Arun Jaitley said it was a watershed moment in Indian economy. 

Whether it is a success or a failure depends on which side of the fence you sit on. However, few would disagree that BJP has exploited it very well in all the elections, both state and municipal bodies, held post demonetisation. 

The biggest surprise was its spectacular win in Uttar Pradesh assembly elections that were held within a couple of months of deadline for changing old notes. When elections were held in UP, it was clear that demonetisation may not meet its initially stated objectives of unearthing black money. It also became clear that the much talked about the windfall of Rs 4-5 lakh crore that the government was supposed to get would remain elusive. Almost all the economists and Institutions had predicted that it would have an adverse impact on India’s GDP. 

Then how come BJP won UP elections? It is true that in India elections are not fought on Economic issues, but one can’t completely ignore demonetisation that touched each and every life. It is also clear that a general voter does not understand GDP. He/she does not read World Bank report on demonetisation and make up mind. 

However, the case of UP was different. A large population of UP was adversely affected by demonetisation. It is one of the poorest states of India. Only two states, Bihar and Manipur are poorer than UP. Its GSDP (Gross State Domestic Produce) per capita is Rs 63,000, which is about one-third of that of Himachal and Gujarat. Both the states have GSDP per capita of about Rs 1,80,000. 

A large number of people from UP villages work in unorganised sector in towns and cities all over the country. They are mostly unskilled workers. The immediate impact of demonetisation was on small and medium enterprises. A large number of factories that employed them either closed down or reduced their operations. These workers became unemployed and went back to their villages. Even today, most of these units are not operating at full capacity. 

During elections, many of these workers were in villages. Then how come they had no grudges against BJP and Narendra Modi? Similarly, the farmers also suffered but it didn’t reflect in the election results. 

The whole credit goes to Narendra Modi. He was successful in changing narrative midway. First, he said that demonetisation has resulted in digital transactions that would bring transparency in the system. At the same time, he was successful in conveying the message to the masses that he was fighting for the poor against the rich. He conveyed it so successfully that people were willing participants in this historic fight against the black money that rich had acquired through illegal means. At last, there was a prime minister who was willing to fight for them. Middle classes thought that at least Modi was doing something. 

The ‘watershed moment’ brought a historic win for BJP in UP. It was a victory of Narendra Modi. A new pro-poor leader emerged in India. BJP had a new constituency that more than compensated the disgruntled communities that left the party. 

The same narrative is now being told to the voters of Himachal and Gujarat. It will be interesting to observe how people vote in the two states. If BJP wins with a thumping majority, Modi’s image as a pro-poor leader will become stronger.