Congress to rock Parliament with Demonetisation

Chidambaram terms note ban as ‘note badli’

Hyderabad: The issue of negative impact of demonetisation on the country’s economy is likely to rock the budget session of Parliament. Former Union Minister and Rajya Sabha MP P Chidambaram said that the Congress party would take the Centre to task on demonetisation which is the biggest scandal of 2016.

Delivering a lecturer on “Demonetisation A Perspective” on the second anniversary function of ‘Mana Telangana’, a vernacular Telugu daily here on Sunday, the former finance minister said that demonetisation had a horrendous effect on the country’s economy.

It is the responsibility of the media to enlighten the people on the issue, he said. “It was for this purpose that freedom of expression in the Constitution has been amplified to include right to newspapers, to broadcast, telecast and use of technology to communicate and express.

The NDA government is trying to stifle the freedom of expression and the media should be on guard to espouse the cause of democracy, freedom of speech and secularism,” he said.

The former minister said that an ill-conceived demonetisation has badly hit the economy when it was humming along with the country’s growth story. This has resulted in erosion of about Rs 1.5 lakh crore from the economy and had resulted in slowing down of the GDP growth.

Chidambaram said that the tremors of demonetisation would continue to be felt at least for next two years and would bring down the GDP growth rate to about 6.5 per cent.

Citing an example, Chidambaram said all banks have their branches in Tirumala and all of them have ATMs. But not a single ATM in Tirumala is having cash. Stating that some of the distress might have come down in big cities, but the conditions were worse in villages and rural areas.

The Congress MP said that initially people had rallied behind the government hoping to see the end of black money and corruption. But, what was promised is not in sight even after lapse of 50 days.

The Congress leader said that the entire Rs 15.44 lakh crore, which was demonetised, have returned to the RBI. Therefore, the entire exercise proved to be "note badli" (exchange of notes) and not "note bandi" (note ban). Who gained from this "remonetisation" drive and why was it done," he asked.

He said in addition to loss of daily wages to about 45 crore people, losses incurred by farmers due to crash of prices in the commodities market forcing the farmers to sell their agriculture produce at non-remunerative prices. Nearly 80,000 SMEs have been closed due to demonetisation and it would take long time to revive them through restructuring and refinancing, he pointed out.

Chidambaram said that as per the statute it was the Reserve Bank of India which is the designated authority over country’s monitory economy. It is the RBI which has to send a note to the Union government if the currency is to be demonetised and announce the same after receiving approval from it. But, contrary to this, it was the government which had announced the demonetisation, he said.

He questioned the manner in which the RBI had given its approval to the government’s reference on demonetisation. There was no notice issued to the RBI director, no agenda circulated and no minutes of meeting recorded. On the top of it, only two independent directors attended the meeting and the bank gave its approval for demonetisation.

Similarly, there was no record of any cabinet note and cabinet meeting held in which decision on demonetisation was taken, he said. Strongly criticising RBI Governor Urjit Patel for the note ban, Chidambaram said no RBI Governor in the past allowed demonetisation for almost 27 years.

He said even Patel's predecessor Raghuram Rajan, who served as RBI Governor for three years, did not permit demonetisation. However, Urjit Patel allowed it in just 64 days.

The former Finance Minister said with an average of 500 people waiting at ATMs and banks, nearly 11 crore people were forced to stand in long queues across the country just to withdraw their own money. There was no improvement in the situation even after three months. Half the ATMs are still not working, he said.

Referring to the slogan of cashless economy of the government, he said that such a situation was not there in countries like Germany, Austria, Australia, UK and USA. The concept of cashless economy is nothing more than “dream sellers”. “It is not possible in a country where 99 per cent transactions are carried out in cash,” he added.