In the end, Prime Minister Narendra Modi's speech on New Year's Eve was not exactly the stuff of what history is made. It could be seen as any of three things: an admission of defeat; a declaration of war; or a pivot to populism. Or, perhaps, it's best understood as a combination of all three.Consider the pivot to populism first. Poor Modi! He's spent the first two years spending so much - essentially blowing up the fiscal oil bonanza - that today, when he really needs the money, he doesn't have enough to throw at people yet. Perhaps when the final numbers for demonetisation are announced, and the RBI can "extinguish the liability" of some tens of thousands of crores of unreturned rupees, then he might have a bit more to play with. But at the moment, he simply can't announce the big helicopter drops of money he'd clearly love to. So he was forced instead to signal intent: with promises of interest subsidies here, credit guarantees there, loan subsidies everywhere - any old scheme he could repackage and sell as a new, post-demonetisation sop for those most affected. There was little in this appeal that was new - an extraordinary lack of creativity, in fact, especially when compared to the radical imagination that went into conceiving demonetisation. But the proportion of the PM's speech devoted to the handouts showed that he definitely felt that he had a bit of political ground to recover - with women, the poor, small and medium enterprise owners, and so on.And that's what was the admission, in fact. In spite of the brave words that compared demonetisation to independent India's wars and declared that JP and Kamaraj (Kamaraj? Why Kamaraj?) would have approved of modern-day Indians' giant sacrifice, the PM himself essentially admitted that those who have been worrying about demonetisation's impact on the more marginalised sections of India's population had a point. Many women have had to bring their long-concealed cash savings into public view, with possible negative consequences; and so, for women, he had to announce special measures. (Repackaged old measures, but that's not the point.) Many smaller enterprises are struggling with a shortage of working capital decimating their operations; so a series of attempts to alleviate that problem were announced. The poor faced considerable hardship; so affordable housing schemes were touted. (Don't forget that the corporate real-estate sector, in such trouble after demonetisation, will be given an out as well.) The only sufferers in demonetisation not given anything were the long-suffering banks, who had to listen to another long set of instructions and exhortations, as if they hadn't already been given multiple non-commercial objectives to fulfil.And in all this there wasn't the slightest mention of the actual details of how demonetisation has been a success - just a few highly doubtful assertions, including the claim that young men had turned away from violence thanks to it. Not even a positive spin on interim data, something that this government otherwise does very well. It's difficult to see this as anything other than an admission of defeat.But, finally, it's also a declaration of war. Modi was very explicit about the next steps: that the bad would be made good, through the strictest possible implementation of the law. Together with the many actions that various enforcement agencies have taken across the country in recent weeks, this sounds like 2017 will be the year when the raid raj returns to our shores. Speaking on NDTV after the PM's speech, Commerce Minister Nirmala Sitharaman clearly indicated that we were entering a new age of income-tax raids - but insisted that this time, things were different, because the raids would be based on the analysis of data revealed by demonetisation. This is fine, as far as it goes - but it doesn't go very far. It doesn't mean that there won't be discretion for the taxman, and it doesn't mean that there won't be harassment. But that's simply not relevant. It will have to happen anyway, whatever the costs to the Indian economy or to regular people. The failure of demonetisation on its own terms means that, to make it a success, Modi has to expand its scope. It has to become not a "surgical strike on black money" but simply the first battle in a long war against the corrupt.You have to ask yourself: is this the speech the PM expected on November 8 he would have to give 50 days later? I don't think anyone can answer in the affirmative. The PM expected, no doubt, an easy skirmish and a quick victory - "all over by Christmas", as they famously promised of World War I. Other leaders might have accepted responsibility and expressed remorse, perhaps sought some sort of forgiveness. But not this Prime Minister; rather than admit defeat on one front, he will expand the war. What a pity that so many innocent civilians are caught in the middle of the battlefield.

(Mihir Swarup Sharma is a fellow at the Observer Research Foundation.)