Sculpture in Delhi depicting Gandhi’s Salt March

When ‘Startup India’ becomes ‘Crony Capitalist India’, we should side with ordinary people against the autocratic government.

I have a T-shirt branded ‘One97’, which I got along with a coffee cup as merchandise at a startup event many years ago. One97 Communications was a sponsor of the event, and a positive force in the Indian startup community. I have visited their Noida offices, and I appreciated founder Vijay Shekhar Sharma’s support for the Net Neutrality movement, including the campaign against Facebook’s Free Basics. The success of their mobile wallet product Paytm heralded an opportunity for India’s masses to leapfrog traditional banking and move to mobile money.

My positive view of the company ground to a halt a few weeks ago.

Paytm newspaper front page ad congratulating the Prime Minister on the demonetisation decision

On November 8 2016, India’s Prime Minister announced that most banknotes would no longer be valid, and had to be deposited in exchange for new currency. The main rationale was to tackle ‘black money’ (tax-evaded wealth). However, only a fraction of Indians are wealthy, and within that group, Income Tax raids show that only up to 6% of black money is held as cash instead of assets like real estate — prompting the Supreme Court to compare the note ban to indiscriminate ‘carpet bombing’.

While any benefits of demonetisation remain tenuous, it soon became apparent that it would take months to print enough new notes. This cash liquidity crunch was a bonanza for fintech companies like Paytm. They asked everyone to join the ‘Cashless Revolution’. (This happens to be the first ‘Revolution’ I’ve been asked to join by the head of government and the financial industry!)

In these post-demonetisation days, when I need cash to buy groceries I spend hours looking for and queuing up at a working ATM. It’s like living in a hunter-gatherer society. Now imagine the situation for people who don’t live in major cities or don’t have bank accounts. Then extrapolate to the business activity that shut down because of demand contraction and supply disruption. Reporters have been tracking the resulting deaths and devastation across this nation of over a billion people.

Seeing thousands of middle-aged people line up at banks in my neighborhood for a chance to access a bit of their own money really got under my skin — I thought, how can you do this to My People? I was most personally saddened by this photograph of an despairing old woman unable to withdraw her pension of $14 a month.

An overview of the effects are discussed in the Frontline article, ‘Wrecking the system’. Steve Forbes says, ‘What India has to done to its money is sickening and immoral.’ Shashi Tharoor sums up the exercise as a ‘disaster’.

As the fallout continued, Paytm released an ad dismissing complaints about demonetisation as ‘drama’, which they revised after getting flak on social media.

Between their splashy ad welcoming the decision, the gloating, and profiteering from the note ban, Paytm has firmly associated themselves with the demonetisation policy. My opposition to the policy thus extends to resisting the coercion to use their app.

I am not against financial technology in general. I’m supportive of products that compete with traditional banking — I made a presentation last year showing how digital wallets can grow from a product perspective. I plan to continue using other wallet apps, like Mobikwik, whose founders have been more considerate in public statements.

Most importantly, I will use payment apps only by choice. Digital solutions have to win by appealing to the market. They cannot win if the only incentives are to opt in to the surveillance state, contribute fees and personal data to financial firms, and the artificial cash restriction — which is not only dangerous for the economy, but also as Nobel laureate Amartya Sen rightly says, a ‘despotic action’.

Nikhil Pahwa writes that something feels wrong about the direction in which we’re headed:

When the founder of India’s (self-proclaimed) largest fintech company stands up on a stage [and] calls it his company’s “pious mission” to make India cashless… The religiosity of that phrase — “pious” — invariably invokes thoughts of “white man’s burden”, imperialism and conversion that comes with it. Let’s call it “digital man’s burden”… We’ve gone from technology giving people choice to technology robbing people of choice: the way technology is being implemented by our government today is an attack on freedom and choice… the dog-eat-dog competition in tech becomes a battle between a beast and a pup when politics enters it. — Year end rant 2016: Technology has never been this political in India

Government propagandists deflect concerns about the cash crunch by saying ‘go cashless’, which plays directly into the message of fintech firms. This circular dynamic between irresponsible politicians and opportunistic businesspeople leaves everyone void of empathy. The assumption that every Indian faced with household needs or medical emergencies has an adequate bank account and smartphone to suddenly use digital payments led a Parliamentarian to deem the Prime Minister ‘Modi Antoinette’.

It is disturbing that all of a sudden, without discussion or debate, the government and corporations are chanting the technocratic mantra ‘go cashless’ to sedate people into forgoing vigilance of their rights. Jean Drèze describes the convergence of interests:

What is astonishing is how little concern this catastrophe is causing in the corridors of power… the tremendous power of the software industry in India [may] help to explain why the disruptive effects of demonetisation are taken lightly… Government policy is now aligned with the interests of these business lobbies… a private consultant recently confided, “our marketing costs have gone down” because the government is doing the advertising… The revolving door between government and corporations is getting wider every day. — The mother of all disruptions

The rise of the Aadhaar identity system and ambitious telecom behemoths like Reliance Jio underscore the concern that, as Aruna Roy says, “the digital platform will trap every citizen within the most ordinary tasks”. It is to America’s credit that Silicon Valley has a libertarian streak — if Indian tech culture doesn’t develop a similar passion for civil liberties, we will end up a modern-day banana republic, a Jio Republic.

The vulnerable people of India should not become lab rats for technocratic adventures in social engineering by a creepy alliance of government and business. As former Prime Minister Manmohan Singh points out, no legitimate reform can “entail even a single loss of life of an honest Indian”.

I don’t recall signing up for technocratic despotism. I shall resist.

Will my personal boycott make a difference? Hardly. But I’m taking the advice of the Pink Floyd lyric featured on the old T-shirt: “We don’t need no thought control.”

I cannot in good conscience be a customer of a company that benefits by pretending to provide adequate recourse to the demonetisation disaster. I know that long after the machinations of this government and financial companies, the people will live on, having freed themselves of this latest attempt at thought control.

The people yes

The people will live on.

The learning and blundering people will live on.

They will be tricked and sold and again sold

And go back to the nourishing earth for rootholds,

The people so peculiar in renewal and comeback,

You can’t laugh off their capacity to take it. — Carl Sagan

When the government snatches food out of a billion citizens’ mouths and one corporation celebrates, it is time to side with the people. I boycott Paytm.