Politics over the first anniversary of demonetisation has heated up already, even as both the ruling BJP and the Congress have alternate events planned on Wednesday.
Finance Minister Arun Jaitley on Tuesday contested former prime minister Manmohan Singh's views calling demonetisation an "organised loot", insisting the exercise was an "ethical drive and a moral step" that made corruption difficult.
"The loot is what happened in 2G scam, Commonwealth Games and allocation of coal blocks, whereas demonetisation was an economic exercise based on ethical and moral rationales, "Jaitley said.
"An anti-black money drive is (an) ethical drive, a moral step. And what is morally and ethically correct has to be politically correct," the minister said, targeting the former prime minister.
Calling the note ban a "reckless" exercise, Singh said during an interactive session with businessmen and traders in Ahmedabad that demonetisation was "legalised plunder".
"One must also remember that nowhere in the world has any democracy undertaken such a coercive move (of) withdrawing 86 per cent of legal tender in one single (stroke). Neither would anyone advise bringing out even more high currency notes of Rs 2,000 after elimination of Rs 500 and Rs 1,000 notes," Singh said.
The noted economist said he still remembered how "shocked" he was when Modi announced the decision on the night of 8 November last year.
"I wonder who advised him to inflict such a reckless step on our nation and whether any considerable thought went into it. Black money and tax evasion are a menace that the country needs to tackle," he said, adding "the demonetisation was clearly not the solution". Singh expressed fear that note ban may have indeed aggravate inequalities and proven to be a "far greater social malaise" in a diverse country like India.
Demonetisation and GST roll-out have become major issues in the Assembly elections in Gujarat and Himachal Pradesh, with the Congress maintaining that the two structural reform measures had adversely affected the economy.
The Opposition has been blaming the Modi government for wreaking havoc over the economy, with its 'irrational move'.
The Congress said that demonetisation had reduced economic growth to 5.7 percent and it was still a "gross underestimate as the pain of the informal sector is not adequately captured in the calculation of the GDP".
The finance minister said while the 10 years of UPA government were characterised by "policy paralysis", the Modi dispensation introduced structural reforms to make India a developed nation and give it a cleaner economy. Jaitley said the BJP believes that status quo in economy needed to be shaken up to end corruption.
Taking on the Congress over the issue, Jaitley said the previous Congress governments never took any such big step against black money.
"The Congress' main aim is to serve the family whereas BJP wants to serve the nation." Elaborating on the benefits of demonetisation, the minister said it was aimed at making India a more formal economy with a broader tax base and less cash in the system.
"Less cash in the system may not end corruption but makes corruption difficult," he said, adding terror funding got "squeezed" post-demonetisation.
The finance minister, however, did concede that demonetisation did not end corruption per se, adding that it wasn't supposed to be a one-stop solution against the menace.
"Demonetisation is not a one-stop solution to end corruption. It cannot be, but it did change the agenda. And that changed agenda is that we should go towards less-cash economy. Individual tax payers' number has increased, digital transactions have gone up and terror funding has squeezed," Jaitley said.
The finance minister said he was "more than satisfied" with the new direction the economy is moving.
He said it is unjust that resources meant for the country's development and welfare of the poor should be kept in rich people's coffers. He said that although corruption will not end even in less-cash system it will definitely become difficult to indulge in corruption.
With inputs from agencies
Updated Date: Nov 07, 2017 18:14 PM