How the demonetisation debate is similar to that over Aadhaar

As the government expects greater transparency from citizens, it gets more and more opaque.


Lalita works as a house help in Gurugram, Haryana, washing dishes and clothes to support her large family. Her husband left for their village in Nalanda, Bihar, on November 7, a day before Prime Minister Narendra Modi announced that the government was withdrawing high-denomination currency notes from circulation effective midnight of that day. Lalita spent six hours at a bank on Sunday to exchange her meagre cash savings, while her husband is now stranded in the village because he does not have the cash he needs for his journey back.

The reasons for the demonetisation are unknown to Lalita. She has not heard that the stated targets of the drastic move was to cripple the parallel black money economy and to counter the security threat from Pakistan as well as Maoists. While Pakistan is known to print fake Indian currencynotes to finance its activities against India, Maoist insurgents are known to hold their cash reserves in their hideouts in high-value denominations such as Rs 500 and 1,000 notes. The surprise demonetisation has rendered their stash worthless.

However, given that the new Rs 500 and Rs 2,000 notes have no new security features, it is just a matter of time before Pakistan’s fake currency presses are hard at work again. Similarly, senior security officials suggest that demonetisation would not really paralyse Maoist funds since extortion and ransom, the key source of their funds, could also move over to the new currency regime once the supply of the new notes stabilises.

“They [Maoists] also have an army of over ground workers in the rural and urban centres who can launder significant portions of their money,” a senior security official told Scroll.in. “We believe this will be exercised to an extent, till December 30.”

Experts have also pointed out to problems with the assumption inherent in the demonetisation exercise that black money only comprises cash.

Professor R Ramakumar, the dean of the School of Development Studies at the Tata Institute of Social Sciences in Mumbai, said in an article on Saturday: “…demonetisation is wrongly premised on the assumption that black money is hoarded in cash”.

Ramakumar also pointed out that both the cash component of black money as well as fake Indian currency notes in circulation were too minimal to justify sucking out an estimated 86% of India’s total currency overnight.

Disempowered citizens

Even if the real reasons for the surprise move seem unclear now, what is clear is that the overnight invalidation of high-value currency notes reinforces the fact that the power structure between the citizen and the State continues to be skewed in favour of the State, which takes major decisions and imposes them on the people without even a semblance of participation by the masses.

But then the Modi government is not the first to do this. This top-down attitude towards decisions that will have far-reaching ramifications on people was starkly visible even during the previous United Progressive Alliance government, when it unfolded the Unique Identity Project, or Aadhaar, in 2009.

The project began as a means to provide a unique number to each citizen, ostensibly to ensure that people received the government subsidies intended for them without any leakages.

Narendra Modi was the chief minister of Gujarat at that time, and he opposed its implementation vehemently on grounds of security. But in March, his government at the Centre controversially passed the Aadhaar law as a money bill to ensure that the Opposition, which dominates the Upper House, could not block or delay it.

The debate over Aadhaar is similar to the demonetisation debate: a major decision was taken and implemented without any input from the people in whose name the project was started.

The fallout of the Aadhaar scheme is now beginning to unfold in many ways. For instance, people who had access to legal entitlements had to procure a new identity card to access these. Second, it puts more of their data at the mercy of the government. Third, they have no or little say in the inferences that are being drawn from the data sets that the Aadhaar project is generating.

“Earlier they [the poor] had a ration card, then they were asked to show a Pan card then they introduced the election card,” said Shankar Singh of the Mazdoor Kisan Sangharsh Sangathan in Delhi on Monday. “Now they are using an Aadhar card. How many identities will they be forced to carry?”

Singh spoke at a conference on the impact of growing digitisation in governance in India.

Said Usha Ramanathan, an independent legal researcher and a long-term opponent of the Aadhar project, “The move to be cashless, paperless and presence-less is the new promise of technology in a country where paper is often the only means to establish an identity.”

That fact that the United Progressive Alliance government continued with the project despite adverse observations by a Parliamentary committee, as has the current Modi government, underscores what little say citizens have in decisions that will have an impact on them and their rights fundamentally.

At the same time, there is a sharp contradiction in the government’s expectation of greater transparency from citizens and its own stand on funding of political parties. Though a Delhi High Court judgment in 2014 said that political parties violated provisions of the Foreign Contribution Regulation Act by accepting foreign funding, no action has been initiated against any party. Worse, earlier this year the Act was amended with retrospective effect, making it legal for political parties to accept foreign funding. How was this move consistent with the government’s declared goals of wiping out corruption? If this was not enough, the move to weaken the Prevention of Corruption Act will deal another death blow to the ability of investigating agencies to prosecute government servants acccused of corruption.

The big data conundrum

Big data, a term that describes large volumes of data that may be mined and analysed to reveal trends, is the natural fallout of the Aadhaar project and will be a major component of demonetisation too. The government has spoken of its intention to use the data generated by the demonetisation exercise to take further action.

As the government’s Digital India campaign takes off, the promise of using big data to take critical decisions seems like a great idea. But the same paradigm threatens to make invisible millions of Indians who do not generate any data, or do not want to do so.

No big data-driven decision making will work unless everyone is part of the big data map, and has control over what it takes away from them. In the absence of either, not only will it severely imbalance decision-making, it will also pose a significant threat to democracy and fundamental rights as people lose control over their data.

One of the biggest databases in India is that of the Aadhaar project, which holds the biometrics detals of citizens. It started as a welfare project, but the Aadhaar Act has a clause stating that any data held by it can now be accessed by the government and its agencies for what is described as “national security” purposes. However, it fails to define what exactly constitutes national security. This makes citizens vulnerable to the state, which can access their data easily. This is a huge cause for concernespecially as India still does not have a law in place to protect the fundamental right to privacy of its citizens.

As in the case of Aadhaar, the citizen has remained a bystander in the decision to demonetise high-value notes too.

This leads to a more fundamental issue. While the data of citizens is becoming more accessible to the government and those who are close to it, the data about the government, and those who work for it, is increasingly difficult to access. This ensures that any big data flow will mostly be in the direction of the government, marginalising the disadvantaged sections of citizens even further.

As the sudden demonetisation drive has now established, momentous decisions can be taken the name of the welfare of the people, ironically, without them getting an opportunity to articulate their views on it.