Between the lines: Modi's exhortation to Jan Dhan holders has potential to spark social discord

Prime Minister Narendra Modi’s exhortation on Saturday to members of low-income groups not to withdraw any cash they might have deposited into their Jan Dhan accounts on behalf of black-money hoarders is a spark that could light the fire of social discord. On the face of it, his statement seeks to convey the sense that a great many people have sought to benefit at the expense of the unconscionable few who amassed black money and concealed it from the state to save on taxes.

But statistics tell us another story. Given that Rs 74,321.55 crores has been deposited in 25.78 crore Jan Dhan accounts till November 30, each account holds an average of about Rs 2,882.91, presumably not enough of an incentive for the disempowered to defy the powerful.

Obviously, not every Jan Dhan account-holder has attempted to help hoarders of black money launder their funds. For instance, on November 30, there were 5.89 crore Jan Dhan accounts with zero balance. No doubt, there are some who suddenly have Rs 50,000, which is the amount Jan Dhan account-holders can deposit without being asked to explain the source of their money. In other words, the prime minister’s appeal will not have relevance for an enormous number of people.

Yet, in creating the impression that wealth from the rich has been transferred to the poor through demonetisation, the prime minister is seeking to tap into the latent anger that the lower classes are assumed to nurse against the wealthy. The politics of class always has an ethical glimmer to it.

However, through this ethical glimmer the prime minister has transmitted a disturbing message – that people, regardless of whether they are Jan Dhan account-holders or not, are right in not returning the money of hoarders that they may have deposited into their bank accounts.

Some myths

In rural India, Modi’s exhortation has already caused a tremor. Agricultural income is exempt from income tax. In such circumstances, it should be irrelevant whether a farmer has a Jan Dhan account or a regular one. She should be able to deposit lakhs of rupees in old denomination notes into her account and claim these are his savings. As a result, Modi’s exhortation to Jan Dhan account-holders will also inspire farmers who have regular bank accounts to renege on promises they may have made to hoarders to help them recycle their funds.

This will have repercussions, not least because those who stand to lose money are powerful and influential. They will certainly use coercion to extract the money from those who had promised to launder it for them. The state can scarcely provide protection in a country where panchayats order the hanging of girls and boys who decide to marry spouses of their own choosing, and where atrocities are committed on Dalits with such terrifying impunity.

Demonetisation has created an image of city-based hoarders of black money scouring the countryside for Jan Dhan account-holders and farmers willing to deposit their money. It has also spawned the myth that they can refuse to return the money given to them by hoarders.

But Sudhir Panwar, president, Kisan Jagriti Manch farmers forum, punctured these ideas. “In most cases, the money has been deposited in rural bank accounts through the intermediary,” he said. “There is a social linkage between him and the urban-dweller wishing to convert old currency notes into new. The intermediary will most likely belong to a dominant caste and will be influential.”

What Panwar is saying that it isn’t as if someone from Delhi or Mumbai parachutes on a village 100 miles away and asks a person there to help him launder his old currency notes for a commission. His assertion can be illustrated through an example.

Potential scenarios

Assume there is person X, an urban-dweller, who is wealthy and most likely to be a political player or one who nurses such an ambition. And he will certainly have links with a group of village pradhans, who may or may not belong to his caste. X will certainly know well the pradhan of the village from which he hails.

Assume the village pradhan is Y. The politics in his village, as is across India, will be organised along factional lines. Y will yield influence on members of his faction, which will comprise members not only from his caste but also those from other social groups. Often, those from castes other than Y’s will consist of residents whom he has helped in the past – through loans, for instance – or who are dependent on him for job and protection. They can turn down Y’s plea at the risk of foregoing privileges they enjoy because of him.

Once the new currency is easily available, and limitations on withdrawals from banks are lifted, X, the urban-dweller, will ask Y, the village pradhan, to return the money he had deposited through his group of followers into either Jan Dhan or non-Jan Dhan accounts. Those who study villages and their dynamics portray two possible scenarios in which the money might not be returned to X.

In the first scenario, the intermediary himself – Y – decides not to return the money to X, in the belief he is safe from harm. After all, Y enjoys a degree of clout too. His base is his village, whose support he can rely upon. More significantly, it is no less than the prime minister who has sanctioned, and justified, the reneging on promise made to black-money hoarders.

But X is influential too. A handful of pradhans and landlords I spoke to felt Y, or the intermediary, will at best ask for an increase in his commission. It is for X to decide whether to acquiesce to Y’s fresh demand. It will most likely depend on whether X can resort to coercion to ensure his money is returned, obviously, without being caught in a cycle of retributive violence. The eventual outcome will depend on the power both X and Y wield.

The other scenario envisages that Y may be willing to return the money to X, but not those through whom he deposited money in banks, emboldened by the prime minister’s exhortation. In this scenario, it is Y who will seek to impose his will on his followers, either using intimidation or organising their boycott.

It is unlikely for Jan Dhan account-holders to defy Y as he will have taken their bank passbooks or Aadhaar and Below Poverty Line cards when they did his bidding and deposited X’s black money into their accounts.

Either way, rural India faces the grim prospect of social tension and conflict in the future, said a landowner of East UP. “Unlike urban India, enmity in villages is passed down from one generation to another,” he explained To this, Panwar adds, “What the prime minister has done is to make social relationships subservient to the greed for money.”

In urban India, hoarders will have deposited their black money in banks through those who are dependent on them for employment or who are linked to them through village-caste ties. Or they would have used the network of friends and relatives for that purpose.

As such, Jan Dhan account-holders can deposit Rs 50,000 without being asked about their source of money. It is debatable whether for Rs 50,000 – a little less than to four months of salary of a driver in Delhi – a person would risk his future employment and also incur the wrath of his employer who is more powerful than him.

Some blowback

Non-Jan Dhan account-holders are allowed to deposit Rs 2.5 lakh without being asked to reveal the source of their money. Those who are richer by a lakh or two of rupees may feel encouraged by the prime minister’s remark not to return to hoarders whose money have ballooned their accounts.

Such reneging on commitment will have a blowback. To evade it, the renegades will likely disappear from their places of residence, relatively easier in metros than what it would be in smaller cities. However, most rely on the caste-village network to find employment in cities. We could see a new phenomenon of gangs emerging to track down people who have run away with the money of hoarders. Intimidation and violence will be their favoured tactics.

Indeed, it is more likely for the wealthy than the poor to defy the hoarders whose money they deposited in banks. People from the same stratum tend to match each other in power, which prompts them to opt for negotiation rather than retribution. Even among the wealthy, it would be the hoarder’s relatives who are likely to renege on their commitment. Familial ties will likely provide him protection against the wrath of the hoarder.

From whichever perspective the prime minister’s exhortation to Jan Dhan account-holders is examined, it seems impossible to avoid the conclusion that he is resorting to class polarisation that doesn’t have the classic elements of class politics. It will not redefine class relations in society, but only teach the people that it is acceptable to betray commitments made to those who have violated the law. In other words, a wrong will be compounded by another wrong.