Those who thought that they would not incur the liability and need not have fear of any kind in depositing old or demonetised currency notes of Rs 500 and Rs 1,000 beware. Even worse, the long unending queues before banks and ATMs may become a bit thinner in days to come but it is not going to end anytime soon.
The war against black money, fake currency, hawala, terror financing, drugs and so on will take its own kind of toll on common men and women. They will have to face their share of short-term hardships. The situation as it prevails now gives a sense that the government overestimated the strength and efficiency of its banking infrastructure. The intentions behind this decisive move were right and praiseworthy. But somewhere while taking this bold and brave decision it misjudged the logistical issues and capacities.
Those who looked up to Finance Minister Arun Jaitley’s press conference on Saturday to get a clear assurance and a possible date for banking infrastructure to function as in the good old pre-8 November days when cash was available within minutes, would be disappointed. The finance minister said the banks could not be told before the 8 November evening address to the nation by Prime Minister Narendra Modi to recalibrate their ATMs because of understandable secrecy reasons. Each of the over two lakh ATMs in the country will have to be physically calibrated, two of cash boxes inside the machine changed and the software there synced with the central system for them to function normally. This process according to the finance minister will take two to three weeks time if not more.
His assurance was that there was enough cash in the 4,000 RBI currency chests spread across the country, thus there was no reason to rush. Jaitley said the problem was logistical in some places as notes of higher denominations were available than the currency notes which customers wanted.
But more than what Jaitley said would concern people was the fact that whatever amount was being deposited in the banks was being monitored by the concerned revenue departments — Income Tax and Enforcement Directorate. Cropping up of sudden money from nowhere and the rise in deposits in Jan Dhan accounts are also being factored in. In fact, Jaitley spoke about money deposits in Jan Dhan accounts twice — once on his own and second in response to a query — during the course of the press conference.
Jaitley's contention was that the revenue departments are keeping a close eye on the deposits in Jan Dhan or any other savings accounts. This is in contravention to the initial assurance given by the government, as also to the assurance given by the BJP president Amit Shah at a specially called media briefing on Friday at the party headquarters. Shah had said, "Those who have currency notes in the denomination of Rs 500 and Rs 1,000 below Rs 2.5 lakh, would have no issue by putting it in their bank accounts and no one in the process will have to face any inquiry." Later the party even issued the same statement as a press release.
The BJP has a social constituency. Unnecessary harassment by the income tax and other revenue departments to those who made genuine household savings could turn them against the party. Jaitley, however, maintained that this was being done with the aim of attaining clean transaction, clean money.
The finance minister was also unrelenting on hardships faced by small traders and hawkers, like those fruit and vegetable vendors who wouldn’t get supply from the wholesalers due to the paucity of cash. "Why should wholesale business be transacted in cash? Every exemption is a gateway to corruption."
It was also time for Jaitley to take to rival political parties — the Congress, Samajwadi Party, and Aam Aadmi Party.
"The political reactions that are coming in, some are most irresponsible. A demand for one week reprieve (by Samajwadi Party chief Mulayam Singh Yadav has been made. This gives the whole game away," the Union minister said.
Training his guns at the Congress, he said the party said this morning that "it's our money, so why should we stand in line." It "could be your money" but the government and the people have a right to know whether "you have paid taxes". The government will insist on that.
Aam Admi Party chief Arvind Kejriwal who saw a scam behind the demonetisation move was strongly rebutted by Jaitley. The Delhi chief minister even charged that the deposits in the banks have increased in the last quarter. The finance minister said he had all the deposit figures from RBI and in the last one year there has been a spike in deposit figures only once in September. Jaitley said that Kejriwal should have applied his mind and seen the rationale before pressing the charge. The minister said that due to the pay arrears of Seventh Pay Commission which was released on 31 Agust there was a spurt in bank deposits.
The arrears were deposited in bank accounts between 21 August to 15 September and "on that basis a concocted story was made" by Kejriwal, Jaitley said.
The finance minister and the top brass in the government should, however, note that whatever politically motivated concoction is being made by Congress vice-president Rahul Gandhi, Kejriwal, Mulayam and Bahujan Samaj Party chief Mayawti, would not have any taker if the public at large is not inconvenienced beyond the tolerable limit. But if the hardship persists for weeks to come then there could be some bad publicity which the Modi government will have to guard against.