Cash crunch: Opposition says 'terror of note ban' has returned as 'financial emergency'; Arun Jaitley calls crisis temporary

New Delhi/Amethi/Kolkata: Opposition parties on Tuesday slammed the government over cash crunch in ATMs and banks in several parts of the country, saying the “terror of note ban” has returned to haunt the people and dubbed the situation as a “financial emergency”. [caption id=“attachment_4334867” align=“alignleft” width=“380”] File image of Finance Minister Arun Jaitley. PTI[/caption] On the back foot, the government attributed the cash shortage to an unusual spurt in demand in last three months, and Finance Minister Arun Jaitley said the “temporary shortage” in certain states is being “tackled quickly” and that there is “more than adequate” currency in circulation. Currency shortage was reported from several parts of Andhra Pradesh, Telangana, Madhya Pradesh, Chhattisgarh, Bihar and poll-bound Karnataka, among other states. Several ATMs in the national capital also saw long queues and soon ran out of cash. In his Lok Sabha constituency Amethi, Congress President Rahul Gandhi said the “terror of note-ban” has again gripped the country and accused Prime Minister Narendra Modi of destroying the banking system with his demonetisation decision. The Congress chief also took to Twitter to attack Modi, alleging he “snatched” the Rs 500/1000 currency notes from the pocket of every Indian and “gave” it to Nirav Modi, but was neither speaking a word about it nor facing Parliament. Nirav Modi, an accused in the alleged Rs 12,700-crore scam at state-run Punjab National Bank, has been absconding. In Kolkata, West Bengal Chief Minister Mamata Banerjee said the cash crunch was a reminder of the demonetisation days. “Seeing reports of ATMs running out of cash in several states. Big notes missing. Reminder of Demonetisation days. Is there a Financial Emergency going on in the country?” she said in a tweet. CPM leader Sitaram Yechury said, “ATMs were empty in November 2016. ATMs are empty now. And the only party flush with cash is the BJP: People suffer.” Referring to the government’s demonetisation decision in November 2016, when the government had announced withdrawal of the then Rs 500/1000 notes and subsequently introduced new Rs 2,000 notes, Yechury said the country is still paying the price of “a sudden midnight Firman (order) of demonetisation”. In a series of tweets, he said the demonetisation did not kill terrorism and it did not kill corruption or fake currency either. “But it has certainly killed the Indian economy. The cash crisis tells us how Modi’s demonetisation disaster is still wreaking havoc,” he added. In a statement, the Finance Ministry acknowledged there has been an unusual spurt in currency demand in the country in last three months, but did not give specific reasons. It has also decided to ramp up the supply of new Rs 500 notes, even as reports suggested that Rs 2,000 notes, which was easier to hoard, were particularly impacted by the shortage. While currency supply increased by Rs 45,000 crore in the first 13 days of April, “unusual spurt in demand” was seen more in some parts of Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh and Bihar, the ministry said. Minister of State for Finance Shiv Pratap Shukla said the government has formed state-wise committees and the issue would be resolved in next 2-3 days. Besides, the RBI has also formed a committee to transfer currency from cash-surplus states to the others, he said. Countering the government’s stand, Yechury said, “This government which still has not been able to count the demonetised currency is asking us to trust its Jumla that there is no cash crunch.” “After the demonetisation disaster where goalposts were repeatedly shifted and deadlines changed, no one trusts the Modi government anymore,” the Left leader tweeted. Firebrand student leader Kanhaiya Kumar also took swipe at Jaitley, saying, “Dear Finance Minister, cashless economy does not eman cashless banks and cashless ATMs. We hope you understand.” Congress leader Ashok Gehlot said, “Modi government has ruined the banking system of the country and people have lost their faith in it.”