On November 8, 2016, at 8pm, Prime Minister Narendra Modi announced that Rs 500 and Rs 1,000 notes that were in circulation at the time would not be valid as legal tender from midnight.
The aims of the demonetisation drive, as presented in the government’s official discourse, were to curb counterfeiting and terror financing, reclaim illegitimate wealth (or black money) stored in cash, and eventually facilitate a nationwide transition to a “cashless” economy.
While the government has achieved mixed success in accomplishing the goals, with average approval ratings of 83 per cent, it seems to have succeeded in convincing the nation’s public of its merit.
A report by All India Manufacturers’ Organisation (AIMO) released on January 9, 2017, claimed that demonetisation had resulted in up to 35 per cent loss of jobs and 50 per cent drop in revenue across industrial sectors, from micro-small scale industries to medium and large scale industries, with far greater losses predicted in the near future – but recent data suggests that demonetisation is still wildly popular across demographic segments.
FourthLion attempted to investigate what public perceptions were regarding demonetisation, through a variety of polling tools. The polling tools included three rounds of IVR polling, the first using numbers from an in-house database, next using random digit dialling for the remaining two rounds of IVR polling, and finally a nationwide field survey – in order to determine whether there is a difference in support for the ban between mobile phone users and rural Indians who do not have mobile phones, and are likely lower-income and more cash dependent.
The first IVR telephonic interviews were conducted nationwide in eight languages (Hindi, English, Kannada, Malayalam, Marathi, Odiya, Tamil, Telugu) among Indian citizens from November 24 to 27, 2016, using FourthLion’s proprietary instaVaani IVR tool. This revealed that 87 per cent of respondents approved of demonetisation, 82 per cent thought that the currency ban would be effective to recover black money, and an equal proportion of respondents said the ban had either a positive effect, or no effect on them.
More surprising were the results from populations that might have been expected to be negatively impacted, such as rural Indians (85 per cent approval), those who do not own a vehicle (84 per cent approval), women (80 per cent approval), those aged 60 plus (77 per cent approval), and those who prefer to pay in cash (81 per cent approval). The lowest approval ratings were in Kerala with an average 62 per cent, but this was still the majority, as it was with the other demographic groups that had lower than average approval rates.
Next, using random digit dialling (RDD), FourthLion ran two more waves of IVR telephonic interviews adding two more languages (Gujarati and Bengali), thus covering the ten languages (Hindi, Bengali, Marathi, Gujarati, Tamil, Kannada, Malayalam, Telugu, Odiya and English) that are cumulatively spoken by over 90 per cent of Indians. Utilising RDD and telecom operator circles (to ensure appropriate geographic distribution), FourthLion ensured that every Indian mobile phone in the country had an equal chance of being included in instaVaani’s survey.
The results of these matched those from the survey conducted using FourthLion’s database, with a vast majority of those polled supporting demonetisation in both waves (80 per cent and 82 per cent in the two respective waves).
A significant finding from the two separate waves of IVR polling (RDD) was that the per cent of respondents claiming to prefer cash payments over other modes of transaction dropped from 65 per cent in the first wave to 55 per cent in the second wave, with cheque or card transactions accounting for the difference.
However, another significant insight from the two waves of polling was that there was a decline from wave 1 to wave 2 in the number of respondents who claimed to believe that demonetisation would be effective in reducing the black money that is currently in circulation – this is perhaps because of news stories or personal experience with people who have been able to convert black money, etc.
From 82 per cent believing it to be effective in wave 1 to 77 per cent in wave 2 being lower than approval rates, suggests that people’s support for the initiative is not being driven by its effect on corruption alone.
Finally, FourthLion in partnership with Hansa Research ran field surveys across the country to capture the sentiments of the parts of the population without access to a mobile phone of any kind. This survey was run in the rural areas of 17 of India’s 29 states (Bihar, West Bengal, Odisha, Assam, Jharkhand, Uttar Pradesh, Rajasthan, Punjab, Haryana, Andhra Pradesh, Karnataka, Tamil Nadu, Kerala, Maharashtra, Madhya Pradesh, Gujarat, Chhattisgarh), the other 12 were excluded due to the relatively smaller size of their respective rural populations.
The total sample size for this survey was 1,020, with an equal number (12) from each individual village. The results of the field survey were very similar to those from the other polling mediums. There was an overall average of 80-82 per cent approval for demonetisation, with slightly fewer respondents believing that the initiative will be effective in retrieving black money in comparison with the IVR results.
The same proportion said that it has either had a positive effect or no effect on them or their families despite an overwhelming 96 per cent of rural respondents without phone access polling that cash was their preferred mode of transaction.
While there may have been slight aberrations in the samples used for the surveys when compared to demographic realities in the country, it was found that applying weighted averages did not significantly affect the results or their implications.
FourthLion even used A/B test question wording to analyse the possibility that strong support for the noteban might be driven by strong personal approval for Narendra Modi, and found that including the PM’s name had a minutely positive impact on support – a mere 2 per cent difference in respondent support between the two question variants.
This could be interpreted in two ways. One, it could mean that demonetisation is popular for its own sake, not as a pet scheme of the prime minister. Two, including his name specifically made little difference since people in any case closely associate the scheme with him.
If it is the latter, one could adduce that Modi’s approval ratings remain high. His approval ratings have been between 74-82 per cent in previous instaVaani surveys.
In conclusion, a vast majority of Indians approve and support demonetisation, but a slightly smaller majority believe it will curb or recover black money. Furthermore, while demonetisation has had little effect in reducing the preference for cash transactions among rural citizens without mobile phone access, it has demonstrably increased the appeal of cashless transactions for the rest of the sampled population.
It would be reasonable to suspect that incoherence from the opposition parties in their argument against the initiative and the fact that the Modi administration has masterfully controlled the narrative surrounding the move have greatly contributed to the popularity of demonetisation and the ruling government.
Furthermore, one can assume that the lower income groups rest assured in the knowledge that their losses will not be as great as that of the “rich”, but what is certain is that “a little self-sacrifice for the greater good of the nation at large” is an idea that resonates strongly with Indians.