Prime Minister Narendra Modi’s “shock and awe” demonetisation of Rs 500 and Rs 1,000 was a masterstroke to weed out hoards of black money and had a huge impact in virtually eliminating the hawala network in terror funding. Overnight, the presses across the border were left with stacks of Indian currency not worth even the paper they were printed on. The general public at large, in spite of going through large inconveniences, welcomed the move and voiced their support. PM Modi went on national television and announced a stunning strike on black money stashed in India on the evening of 8 November. Within minutes and hours following the announcement, serpentine queues formed at ATMs, banks and post offices to exchange their old currencies and withdraw cash in lower denominations. This continues unabated to this day. On 10 November, PM Modi embarked on a two-day tour of Japan. Confusion began to unfold and started running out of control in places because of rumours spread through social media, accompanied with blatant misreporting done by some sections of the media. What could have been done to avoid this? The PM’s tour of Japan for sure threw in a wrinkle or two as well, as his leadership is key, on the spot, when major decisions get made.

COMMUNICATION

Based on the events that unfolded in the subsequent days, it appears that there was no cohesive messaging from the RBI. The banks, wholly dependent on the RBI for currency, had to deal with their own problems of failing ATMs and computers.

The media, faced with an inadequate information flow, indulged in speculation, adding to the confusion. Some outlets even started sensationalising events that happened and attributed these to the lack of cash in ATMs or banks. Mainstream media did not help the situation by writing attention-grabbing headlines and screaming chaos for TRPs.

Social media, as usual, erupted on both sides. In fact, the government has to thank many in social media who volunteered help and calmed the situation in many areas.

Ministry of Information must set up an information cell and make hourly, if not daily announcements/bulletins, or give media updates to keep the people informed.

As on date there isn’t a central website where one can go and get legitimate information, forms etc., to help the public at large.

It is well understood that a “surgical strike” (sic) like this must be known to a select few to avoid leaks. What could have been done though is that once it was announced, a team could have been formed, headed by the Finance Minister, to ensure that the public at large and the banking institutions are kept informed of the steps and measures being taken to ensure that the RBI will provide necessary currencies on time to disburse. The RBI failed big time on this.

The ministers of the government seemed reluctant to give sound bites and even when they did, they were not enough to reassure the jumpy and the harassed.

A few opposition parties and voices took this opportunity to squarely blame the PM for the ensuing confusion and chaos which needs to be mitigated.

CO-ORDINATION

When the PM announced that new currencies would be put into circulation, did the banks know that their ATMs had to be recalibrated to dispense them? This was in spite of the fact that a Rs 2,000 note was announced about three months ago.

The ministry and the RBI should have anticipated a run for new cash and exchange, following the announcement. The RBI clearly dropped the ball on this.

The banks, on the other hand, had to bear the brunt of the public angst. They did a commendable job for sure, instead of passing the buck up the chain. Many bank officers and employees went beyond their call of duty and worked late hours and in multiple shifts to help the public. In some cases, even retired officers pitched in to alleviate the pain.Though a lot of effort is being poured in now, the Ministry of Finance, RBI and banks must definitely do a better job of co-ordinating their efforts.

In all, the Modi government must learn from this episode and ensure that a clear communication strategy and plan is put in place for future actions so as to ensure the high degree of perfection expected of PM Modi.

An entrepreneur and technologist, Ramesh Swamy has a passion for research into Science & technology and its influence on human life.