Amazon Pay
SBI
Grofers

Demonetisation Anniversary updates: Govt now wants to eat into RBI's reserves, seeks to step up expenditure in election year

Auto Refresh Feeds
Demonetisation Anniversary updates: Govt now wants to eat into RBI's reserves, seeks to step up expenditure in election year
  • Liquidity crisis was avoidable, prior planning for re-monetisation was required: Ex-banker Meera Sanyal

    As shared in my book 'The Big Reverse', irrespective of the policy merits or demerits of the move, the crushing effects of the liquidity crisis unleashed in November 2016 could have been avoided, if adequate new notes had been printed prior to the announcement. On 13 November, the PM had stated in Goa that the move had been in the planning for 10 months. Ten months was more than sufficient time to print an adequate quantity of Rs 2,000 and Rs 500 notes to replace the withdrawn notes swiftly. There is, therefore, no excuse for the shoddy implementation and enormous delays that took place in re-monetising the economy.

    To have subjected the Indian economy and 1.3 billion Indians to the liquidity crisis that followed the note ban was simply unforgivable. By passively agreeing to a step that extinguished 86.9 percent of the currency in circulation, without any clear plan or preparation for re-monetising the system, the governor and the Board of RBI abdicated their duty to the people of India. If they did so under pressure from the government, then, as a nation, we should reflect gravely on the dire consequences that occur when the autonomy and independence of critically important institutions like the RBI are eroded.

  • 14:58 (IST)

    'One more crucial institution will fall from grace', says Chidambaram on RBI's role in demonetisation 'fiasco'

    The government is planning to issue a direction to RBI under Section 7 to transfer Rs 1 lakh crore to it. In such a situation, the RBI Governor will have only two options in this matter — to act in line or resign. Either way, one more crucial institution will fall from grace, the former finance minister said.

  • 14:58 (IST)

    'One more crucial institution will fall from grace', says Chidambaram on RBI's role in demonetisation 'fiasco'

    The government is planning to issue a direction to RBI under Section 7 to transfer Rs 1 lakh crore to it. In such a situation, the RBI Governor will have only two options in this matter — to act in line or resign. Either way, one more crucial institution will fall from grace, the former finance minister said.

  • 14:51 (IST)

    After failing with demonetisation, the govt now want to eat into RBI's reserves, says Chidambaram

    Chidambaram said that demonetisation has not put an end to fake money and now the govt wants to use RBI reserves to step up expenditure in an election year. The government doesn't know what the consequences will be if the RBI defies it or if the RBI Governor resigns. Either way, it will be a catastrophic situation, he said.

  • 14:39 (IST)

    Modi govt is staring at a fiscal deficit, achhe din promise in shambles: Chidambaram

    The Modi govt is staring at a fiscal deficit crisis. It longer talks about 'achhe din' or growth and development. We only hear about the Hindutva agenda. The talking and writing are only about the divisive issue, said Chidamabram.

    The promise of 'acche din' lies in shambles. People will takea decision when given opportunity and the Karnataka bypolls were a testimony to the same, Chidamabaram said.

  • 14:32 (IST)

    Chidambaram hits out at the Modi govt on demonetisation anniversary

    Congress leader and former finance minister P Chidambaram on Thursday called demonetisation an "ingeniously designed official money laundering scheme".

  • 14:26 (IST)

    Arun Jaitley posts strong defence of demonetisation

    Posting a strong defence of demonetisation, on its second anniversary today, Union Finance Minister Arun Jaitley said that the note ban had a huge impact in formalising the economy. "When this govt took over, total number of persons filing Income Tax returns in a country of 130 crore was only 3.8 crore and not all were paying taxes. Same was the position with regard to the indirect taxes.Therefore the tax payer had to pay not only his own taxes but in order to run the system of governance also pay the share of the evaders. Hence, there was a need to formalise the Indian economy."

    "The government first targeted the black money outside India. Asset holders were asked to bring it back on payment of penal tax, on failure to do so they are being prosecuted under the Black Money Act.  All such details received have resulted in action against the violators," he added.

  • 14:06 (IST)

    It is just the start, but the movements in right direction will strengthen economy in longer run: Jaitley

    Speaking to the media, finance minister Arun Jaitley said that it was the courage of the prime minister which helped us take bold steps to formalise economy. But these movements in the right direction will strengthen the economy in the longer run. "An ill-informed criticism of the demonetisation is that almost the entire cash money got deposited in the banks. Confiscation of currency was not an objective of demonetisation. Getting it into the formal economy and making the holders pay tax was the broader objective. The system required to be shaken in order to make India move from cash to digital transactions. This would obviously have an impact on higher tax revenue and a higher tax base."

  • 13:44 (IST)

    What has Congress done to eliminate corruption, asks BJP

    BJP, in a blunt tweet to the Congress, asked, "Can the Congress name even one stringent measure they took during the UPA regime, which was aimed at eliminating corruption and black money?"

    The tweet was part of 10 questions posed by the ruling party after the Congress announced nationwide protests marking the 2nd anniversary of demonetisation. 

  • 13:41 (IST)

    Congress is living in a state of denial: BJP

    Questioning Congress' motives, the BJP said that the party is living in a "state of denial" and added that how can the party be blind to India's economic prowess "which is being recognised by world over"?

    "Is the Congress party living in a state of denial that it cannot see the surge in GDP numbers, the ‘Ease of Doing Business Rankings’ and Global Competitiveness Index? Why are they unhappy that India’s economic prowess is being recognized world over?," BJP tweeted earlier today. It posed 10 questions to the Opposition party which had announced protests all over the country. 

  • 13:36 (IST)

    With what face is ex-finance minister, being probed for corruption, speaking on policy matters: BJP

    Slamming former finance minister P Chidambaram, who earlier today criticised Arun Jaitley for saying “confiscation of currency was not an objective of demonetisation”, BJP said that he had no right to speak on policy matters. 

    "How is a former Finance Minister, himself under radar of investigating agencies for massive corruption involving land, cash and foreign bank accounts, speaking on policy matters? With what face?"

    Chidambaram, earlier today, had tweeted, "FM says “Confiscation of currency was not an objective of demonetisation”. Will someone please remind him of what he told the media and what the AG told the Supreme Court?"

  • 13:30 (IST)

    Congress has anti-development mindset, says BJP

    Slamming the Congress for playing politics, the BJP questioned the party's "anti-development mindset" that "opposes a bold move that has widened the tax base?"

  • 13:22 (IST)

    BJP poses 10 questions to Congress; asks why does Congress find merit in protesting against every anti-corruption measure 

    In a series of tweets, the Bharatiya Janata Party posed ten questions for the Congress.

    - "Why does Congress find merit in protesting against every anti-corruption measure of the Government of India? What do they fear? 

    - Why is it that wherever black money is there, the Congress is not far behind? 

    - What sort of politics and anti-development mindset is this of the Congress that opposes a bold move that has widened the tax base? 

    - How is a former Finance Minister, himself under radar of investigating agencies for massive corruption involving land, cash and foreign bank accounts, speaking on policy matters? With what face? 

    - Mr Anand Sharma, a Congress leader, had personally opposed demonetisation on the floor of Parliament. In the last 2 years, India has seen an increase of more than 2 crore tax returns. Is this why you were opposed to demonetisation?

    - Informal economy meant exploitation of the poor and the marginalized, many of whom came from lower middle class. Demonetization has lead to formalization of the economy, which has empowered them. Why is Congress opposing that? 

    - Is the Congress party living in a state of denial that it cannot see the surge in GDP numbers, the ‘Ease of Doing Business Rankings’ and Global Competitiveness Index? Why are they unhappy that India’s economic prowess is being recognized world over?

    - Why is it that whenever India’s standing in the world increases the Congress takes to defaming India and creating an atmosphere of gloom to mislead the people?

    - Congress now remembers small business but did the UPA think of this sector even once? Except tax terror, raid raj and arbitrary policies, what did Congress do for small businesses?

    - Can the Congress name even one stringent measure they took during the UPA regime, which was aimed at eliminating corruption and black money? 

  • 13:07 (IST)

    Income tax return filing has doubled since BJP govt came to power: Arun Jaitley

    Talking about the increase in income tax returns filed post demonetisation, Jaitley said that in May, 2014, when the present Government was elected the total number of the filers of income tax returns was 3.8 crore. He added that in the first four years of this Government, it has increased to 6.86 crore. "By the time the first five years of this Government are over, we will be close to doubling the assessee base," Jailtey wrote in his blog

  • 12:56 (IST)

    P Chidambaram to address hold press conference on demonetisation today

    Former finance minister P Chidambaram will address the media in Kolkata on demonetisation at 2.15 pm on Thursday, sources said.

  • 12:37 (IST)

    Demonetisation was a 'one man-made disaster for India': MK Stalin

    DMK chief MK Stalin has also attacked the Modi govt for demonetisation saying that it 'brought people on streets'.

  • 12:29 (IST)

    Shashi Tharoor says 'nation's economy burned' due to demonetisation

    He has joined the list of Opposition leaders who have criticised the government heavily on the second anniversary of demonetisation. 

  • Demonetisation helped fin tech start-ups in their goal of financial inclusion, say experts

    "Demonetisation paved the way for smart technology solutions which kicked a new era of digital payments. It became a great opportunity for everybody to build digital products, it has helped fin tech start-ups in their goal of financial inclusion for India’s masses. As more citizens become part of the formal economy and develop a substantial digital footprint, these companies are now able to deploy their AI-driven technology to offer financial solutions customized to their needs and based on their credit history. One of the most significant changes in the payments landscape is the push towards interoperability, with instruments such as UPI allowing transfers between banks, independent of the acquirer payment service provider mobile app. The increasing adoption of the Bharat Bill Payment System (BBPS) or Bharat QR has lent a further push to seamless, secure and interoperable payments," Ramaswamy Venkatachalam, Managing Director, Fidelity Information Services (FIS) told Firstpost.

  • Demonetisation was a game-changer for digital payments, made way for UPI, Aadhar-enabled payment system

    Ramaswamy Venkatachalam, Managing Director, Fidelity Information Services (FIS) told Firspost, "Demonetisation was a game-changer for digital payments which completely transformed the digital landscape by creating a variety of payment offerings that are now available to the consumer and the merchant. One of the talking points of the digital payments story has been the phenomenal growth witnessed by new age instruments such as Unified Payments Interface (UPI), Immediate Payment Service (IMPS), Prepaid Payment Instruments (PPIs), Aadhaar Enabled Payment System (AEPS), along with well-established ones such as National Electronic Fund Transfer (NEFT), Real Time Gross Settlement (RTGS) and cards. The outcome has resulted in India in leading the world in providing real-time P2P payments as well as other forms of merchants."

  • Digitisation caused pain, but ushered digital payments 

    "India after 2-years of demonetisation has witnessed a massive change in the way Indians transact their money, as millions have adopted digital methods and technologies for payments of goods and services. Demonetisation has caused significant disruption, but this incident also paved the way for digital payments play in India. It has eased the transition of millions of Indians into the formal banking system and given them access to credit and loans that can help them achieve their goals in future. Individuals and MSMEs that were earlier outliers of an unequal system are now equal partners in a more accessible financial world, " Ramaswamy Venkatachalam, Managing Director, Fidelity Information Services (FIS) told Firstpost

  • 11:51 (IST)

    'Why the country was pushed into such a disaster,' Arvind Kejriwal asks Modi govt on demonetisation anniversary

    Aam Aadmi Party (AAP) convener and Delhi chief minister Arvind Kejriwal on Thursday questioned the rationale behind the Modi government's note ban move and termed it as "a self inflicted deep wound" on the Indian economy. 
     

  • 11:38 (IST)

    No positive result of demonetisation, objectives lie unfulfilled, says Ashok Gehlot

    Senior Congress leader Ashok Gehlot slammed the demonetisation move of the Modi government calling it a big failure. 

  • 11:33 (IST)

    Manmohan Singh urges Modi govt to restore 'certainty and visibility' in economic policies

    "I urge the government to restore certainty and visibility in economic policies. Today is a day to remember how economic misadventures can roil the nation for a long time and understand that economic policymaking should be handled with thought and care, Singh said in his statement.

  • 11:28 (IST)

    Demonetisation has made financial inclusion possible, impact seen on tax collection: Arun Jaitley

    Arun Jaitley on Thursday said that the impact of demonetisation has been felt on the collection of personal income tax and the move of government has led to financial inclusion which in turn has ensured that even weaker sections became part of the formal economy.

  • 11:17 (IST)

    CPM calls demonetisation the 'biggest scam'

    "It has been two years since demonetisation disaster was announced.The move have had disastrous consequences on the health of the economy and imposed unprecedented burdens on common people. Demonetisation is the biggest scam perpetuated on the nation, in the name of fighting black money, read a tweet from CPM's official twitter handle.

  • 11:15 (IST)

    'When you cast your vote for Lok Sabha, never forget notebandi,' says Congress

    In 2017, the Congress and other opposition parties had protested at various places across India against the central government's drive. "Two years ago, a disaster struck India's economy. So much so that the prime minister has now stopped speaking about demonetisation after ruining lives of ordinary citizens. History will remember this day as a black day. When you cast your vote for Lok Sabha, never forget notebandi," tweeted Congress leader Ahmed Patel.

  • 11:10 (IST)

    Arun Jaitley says 'confiscation of currency' was not the objective', increasing the tax collection was

    Jaitley, in his blog, wrote that "an ill-informed criticism" of the demonetisation is that almost the entire cash money got deposited in the banks. However, he wrote, that "confiscation of currency was not an objective of demonitisation". "Getting it into the formal economy and making the holders pay tax was the broader objective," Jaitley said. 

  • Demonetisation has given a jolt to 'crooks'

    The nation was always accused of harbouring a parallel economy till Prime Minister Narendra Modi came on the scene. Demonetisation has fluttered the dovecots of the crooks who now fear an encore anytime, this time round of the Rs 2,000 note. Modi should, in fact, persist with demonetisation till such time cash ceases to be the king. He would do well to dismantle ATMs that beckon usage of cash with the corresponding undermining of the card and other digital payments. Banks should hard-sell swiping machines to its trader-account holders.

  • 10:54 (IST)

    Manmohan Singh calls demonetisation an 'ill-fated and ill-thought' exercise

    The former prime minister in a statement on Thursday said that the 'wounds' of demonetisation are only becoming more visible with time

  • More people now familiar with digital modes of transactions, economy also formalised 

    The notable positives of the demonetisation include the fact that more number of people are now familiar with digital modes of transactions and the fact that now we have a more formalised economy. When seen against the pain it inflicted on the economy, did the move make sense is the larger question? Of course, the jury is still out on whether demonetisation was amasterstrokee of the Narendra Modi-government or  an economic blunder.  After two years, the Indian economy is largely past the demonetisation impact. Quite likely, the debate on note ban will go on for a long time to come.    

  • 10:49 (IST)

    Piyush Goyal hails 'bold and decisive' move of BJP govt

    Goyal called demonetisation a part of a series of decisive and bold steps by Narendra Modi to free India from the shackles of corruption.

  • Demonetisation turned out to be the biggest crackdown on parallel economy 

    However, it is unfair only to look at the negatives of demonetisation. Regardless of the tangible results, this was the biggest crackdown on parallel economy modern India ever witnessed and no one doubts the intention of the exercise. Without a doubt, this led to the creation of a more formalised economy. Most of the money in circulation can be now raced to the sources and taxmen have a better grip on those who have deposited illicit money in their bank accounts. 

  • Demonetisation didn't turn out to be much of a dampener for Modi govt

    But politically, demonetisation was never proved to be a major setback for Narendra Modi. The BJP continued its victory run in the subsequent state elections. The Uttar Pradesh assembly polls that followed not very long after note ban was considered as the litmus test for the BJP on the demonetisation reception. The party achieved a grand victory in the state poll and in many subsequent elections, silencing the demonetisation critics.   

  • 10:27 (IST)

    Mamata Banerjee calls 8 November a 'dark day'

    "It ruined the economy and the lives of millions. People will punish those who did this," the West Bengal chief minister tweeted.

  • Demonetisation was almost entirely a political move; RBI had only a secondary role

    The RBI had only a secondary role to play throughout the demonetisation episode. While its role in deciding the launch of demonetisation was understandably limited, the unenviable task of implementing the programme was completely entrusted with the RBI. This wasn't easy for the central bank. Several circulars were issued and rolled back. Most of the decisions were taken on the go. The huge public unrest that followed in the later months on account of mega problems in depositing and withdrawing money put the regulator, and the banking system as a whole, in a spot. The mayhem continued for a long time. Those who criticised the central bank heavily for its handling of note ban included former RBI governor, YV Reddy, and one of the former deputy governors, Usha Thorat. They cited the reputation loss RBI, as an institution, suffered throughout the whole episode.

  • RBI faced flak for delay in making demonetisation numbers public

    The biggest disappointment came when the RBI data showed almost all of the demonetised notes came back to the bank counters. This poured cold water on the initial expectations that a significant chunk of the unlawful money will not return and that amount can be put in use for productive purposes in the future economy. The RBI took a very long time to finish the mammoth task of physically verifying and counting the demonetised notes. Logically, the RBI governor received a lot of flak for this delay, including from a Parliamentary committee, in making the information public. 

  • Demonetisation has increased tax collections

    The biggest achievement of demonetisation is the mainstreaming of the economy with GST adding weight to it back-to-back and crooks caught with their pants down. The collection of GST on the back of demonetisation has also gone up crossing the Rs 1 lakh crore mark per month many times over. Direct taxes collection too have gone up. What more proof required by the Doubting Thomases?

  • 10:08 (IST)

    IMF forecast predicted dent on economy from demonetisation

    The International Monetary Fund (IMF) forecast a growth rate of 7.3 percent for India in the current year of 2018 and that of 7.4 percent in 2019. In 2017, India had clocked a 6.7 percent growth rate. "India's growth is expected to increase to 7.3 percent in 2018 and to 7.4 percent in 2019 (slightly lower than in the April 2018 World Economic Outlook [WEO] for 2019, given the recent increase in oil prices and the tightening of global financial conditions), up from 6.7 percent in 2017," the IMF said in its latest World Economic Outlook report. This acceleration, the world body said, reflected a rebound from transitory shocks (the currency exchange initiative and implementation of the national Goods and Services Tax).

  • Small and medium enterprises suffered the most

    What suffered worst during the attack on cash was the cash-intensive industries and SME, MSMEs. When cash significantly disappeared from the system for a good 3-4 months, supply chains were taken a major hit. Things improved when cash returned to the system but many failed to survive. Reports emerged of several micro-units shutting shops which inevitably meant job losses and, in turn, demand slowdown.     

  • 'Less cash economy' remains a dream 

    RBI data tells us that the currency in circulation spiked to Rs 19.6 lakh crore as on 26 October 2018, registering a growth of 9.5 percent from two years ago and compared with  Rs 17.9 lakh crore on 4 November 2016, the week before note ban. Further ATM withdrawals too have picked up. This further tells us that cash is clearly back and is unlikely to go off the scene in India that is dominated by informal economy and cash-intensive labour. 'Less cash economy' remains a dream despite a massive one-off shock treatment on cash  

  • 10:00 (IST)

    Congress' jibe on demonetisation and 'Gabbar Singh' Tax

    Congress president Rahul Gandhi has time and again slammed Modi government's demonetisation move and the introduction of the Goods and Services Tax. Rahul had who referred to GST as Gabbar Singh Tax, said the government has destroyed the country's economy with decisions like these.

  • 09:58 (IST)

    Urjit Patel to brief parliamentary panel for third time

    A parliamentary panel, of which former Prime Minister Manmohan Singh is a member, has called RBI governor Urjit Patel for the third-time to brief it on the government's demonetisation move. The 31-member Parliamentary Standing Committee on Finance, headed by Veerappa Moily, has been deliberating on the issue for almost two years. Patel has been called on 12 November to brief the committee's members on demonetisation of Rs 500 and Rs 1,000 notes and the "ramifications thereof", according to the panel's meeting notice. The RBI governor will also brief the committee on the banning of the Unregulated Deposit Schemes Bill and related issues, PTI reported.

  • 09:57 (IST)

    Govt claims on economy post-demonetisation fuzzy 

    The government's claims that the tax base has been widened, formalisation of the economy has been boosted and there has been a sharp fall in counterfeit notes in circulation are all in the fuzzy, futuristic zone. Claims of a fall in terror funding are essentially non-proveable in nature and smack more of politics than economics. We have no meaningful data to show a growth in government coffers, even as a figure of Rs 3,00,000 crore is being bandied about as the amount of potential black money that found its way back into the banking system, waiting for the taxman's noose to tighten. In a nation where clever accounting, pliable bureaucrats and the lack of hard evidence in courts are an everyday reality, we will believe it when we see it.

  • 09:55 (IST)

    Demonetisation exercise cost Centre Rs 8,000 crore

    The demonetisation exercise cost Rs 8,000 crore while the money that did not come back amounted to Rs 10,720 crore. But that is no profit because there were many more costs to the gamble to retrieve black money than the working expenses. Let's not forget that the RBI actually paid a dividend for the 2016-17 fiscal year ended June that was less than half of what it paid out in the previous year. In absolute terms that was Rs 35,221 crore less.

    There was also a sharp increase in reports of counterfeit notes during the demonetisation period - involving 322,000 such instances. The administrative costs of such an exercise should be considered in any cost-benefit analysis.

  • 09:53 (IST)

    Demonetisation failed in its objectives

    The major objective of demonetisation announced at 8 pm on 8 November 2016 by Modi was to unearth black money largely suspected to have been hoarded in high denomination notes. It is going two years since the cataclysmic demonetisation exercise was carried out. And if the government is still groping for achievements to show insofar as the main objective is concerned, it is bound to be pilloried. A demonetisation scheme porous and leaky as this one with so many unwittingly built-in laundering options was depressingly preordained to fail in achieving its main objective.

  • 09:51 (IST)

    Counting of returned notes was a humongous task RBI was armed with

    The counting wasn’t easy, complains the RBI annual report. “This humungous task of processing and verification of SBNs was successfully achieved with the co-ordinated efforts put in by the workforce of the Issue Department of the Reserve Bank. The process involved working in two shifts under strenuous conditions, maintaining detailed records and planning effectively without compromising on other functions of currency management.”

  • 09:48 (IST)

    Government expected Rs 4 lakh crore of black money to get extinguished but 99.3% of it has returned

    Post-demonetistaion, 99.3 percent of the total banned notes have returned home or let's say or let’s say almost all cash has been deposited back in the banks, including the notorious black money villain. That is a political setback for the Narendra Modi government, which was initially expecting Rs 3-4 lakh crore of black money to get extinguished outside the banking system post the demonetisation exercise.

  • Focus put on 'cashless economy' but cash came back into circulation months after demonetisation

    The list of objectives was expanded in the subsequent months. From the initial three, the goal was shifted to digitalisation of the economy, which was announced by Narendra Modi in one his 'Mann Ki Baat' programmes. Subsequently, the whole banking system and government machinery was pressed into action to create a 'cashless' or 'less cash' economy. Since then, digital transactions have picked up particularly through channels like Unified Payments Interface Interface. This was a notable shift in a cash-dominated economy. Surely, cash in circulation dipped in the subsequent months. But cash returned with a vengeance in the period after.     

  • Objective of demonetisation was war on black money but govt has nothing to show on paper

    Two years ago, Narendra Modi launched demonetisation with three objectives to begin with--terminating black money in cash, killing fake currency and put an end to cash-based corruption. The objectives were noble and welcome in an economy where a parallel economy was thriving. The operation itself was unheard in such a scale in any comparable economy. About 86 percent of the cash in circulation vanished in one go when Rs 500, Rs 1000 notes were declared invalid. Till date, there is no hard evidence that demonetisation achieved any of the three initially stated objectives in the desired manner.     

  • 09:38 (IST)

    No clarity still on how much money was realised on account of penalties and confiscation of unaccountable funds

    The information that is still to be revealed is as to how much money has been realised on account of penalties and confiscation of such unaccountable funds. However logically, if one were sure that they could not justify their cash deposits to the tax man, there would be an incentive to burn the currency as the fine/penalty was for almost the whole amount. It must be remembered that the amnesty scheme announced prior to demonetisation had not garnered a significant amount of funds. This part of the puzzle remains unanswered and needs to be filled in.

Demonetisation Anniversary LATEST updates: Congress leader and former finance minister P Chidambaram on Thursday called demonetisation an "ingeniously designed official money laundering scheme". The Modi govt is staring at a fiscal deficit crisis. It longer talks about 'achhe din' or growth and development. We only hear about the Hindutva agenda. The talking and writing are only about the divisive issue, said Chidambaram. The promise of 'acche din' lies in shambles. People will take a decision when given opportunity and the Karnataka bypolls were a testimony to the same, he said.

Chidambaram said that demonetisation has not put an end to fake money and now the govt wants to use RBI reserves to step up expenditure in an election year. The government doesn't know what the consequences will be if the RBI defies it or if the RBI Governor resigns. Either way, it will be a catastrophic situation, he said.

File image of Congress leader P Chidambaram. PTI

File image of Congress leader P Chidambaram. PTI

Continuing their war of words on social media, BJP in a series of tweets asked why is Congress always joining protests on anti-corruption measures. "Why is it that whenever India’s standing in the world increases the Congress takes to defaming India and creating an atmosphere of gloom to mislead the people?"

In a blunt tweet to the Congress, BJP asked, "Can the Congress name even one stringent measure they took during the UPA regime, which was aimed at eliminating corruption and black money?"

The tweet was part of 10 questions posed by the ruling party after the Congress announced nationwide protests marking the 2nd anniversary of demonetisation.

Slamming former finance minister P Chidambaram, who earlier on Monday criticised Arun Jaitley for saying “confiscation of currency was not an objective of demonetisation”, BJP said that he had no right to speak on policy matters.

"How is a former Finance Minister, himself under radar of investigating agencies for massive corruption involving land, cash and foreign bank accounts, speaking on policy matters? With what face?"

Chidambaram, earlier today, had tweeted, "FM says “Confiscation of currency was not an objective of demonetisation”. Will someone please remind him of what he told the media and what the AG told the Supreme Court?"

Posing ten questions to the Congress, the BJP asked why does the party fear demonetisation. "Why does Congress find merit in protesting against every anti-corruption measure of the Government of India? What do they fear?" In a series of tweets, BJP slammed Congress and the opposition for protesting against "anti-corrupt" measures.

Former finance minister P Chidambaram will address the media in Kolkata on demonetisation at 2.15 pm on Thursday, sources said.

DMK chief MK Stalin has also attacked the Modi govt for demonetisation saying that it 'brought people on streets'. Meanwhile, Shashi Tharoor says 'nation's economy has burned' due to demonetisation. He has joined the list of Opposition leaders who have criticised the government heavily on the second anniversary of demonetisation.

"India after 2-years of demonetisation has witnessed a massive change in the way Indians transact their money, as millions have adopted digital methods and technologies for payments of goods and services. Demonetisation has caused significant disruption, but this incident also paved the way for digital payments play in India. It has eased the transition of millions of Indians into the formal banking system and given them access to credit and loans that can help them achieve their goals in future," Ramaswamy Venkatachalam, Regional Manager-India and South Asia, Fidelity Information System (FIS) told Firstpost.

Aam Aadmi Party (AAP) convener and Delhi chief minister Arvind Kejriwal on Thursday questioned the rationale behind the Modi government's note ban move and termed it as "a self-inflicted deep wound" on the Indian economy.

Arun Jaitley, in his blog, wrote that "an ill-informed criticism" of the demonetisation is that almost the entire cash money got deposited in the banks. However, he wrote, that "confiscation of currency was not an objective of demonetisation". "Getting it into the formal economy and making the holders pay tax was the broader objective," Jaitley said. He added that the impact of demonetisation has been felt on the collection of personal income tax and the move of government has led to financial inclusion which in turn has ensured that even weaker sections became part of the formal economy.

Former prime minister Manmohan Singh has called the note ban an 'ill-fated and ill-thought of exercise. Singh said its 'wounds' are becoming more visible with each passing day. "I urge the government to restore certainty and visibility in economic policies. Today is a day to remember how economic misadventures can roil the nation for a long time and understand that economic policymaking should be handled with thought and care, Singh said in his statement

However, it is unfair only to look at the negatives of demonetisation. Regardless of the tangible results, this was the biggest crackdown on parallel economy modern India ever witnessed and no one doubts the intention of the exercise. Without a doubt, this led to the creation of a more formalised economy. Most of the money in circulation can be now raced to the sources and taxmen have a better grip on those who have deposited illicit money in their bank accounts.

The RBI had only a secondary role to play throughout the demonetisation episode. While its role in deciding the launch of demonetisation was understandably limited, the unenviable task of implementing the programme was completely entrusted with the RBI. This wasn't easy for the central bank. Several circulars were issued and rolled back. Most of the decisions were taken on the go. The huge public unrest that followed in the later months on account of mega problems in depositing and withdrawing money put the regulator, and the banking system as a whole, in a spot. The mayhem continued for a long time. Those who criticised the central bank heavily for its handling of note ban included former RBI governor, YV Reddy, and one of the former deputy governors, Usha Thorat. They cited the reputation loss RBI, as an institution, suffered throughout the whole episode.

The biggest achievement of demonetisation is the mainstreaming of the economy with GST adding weight to it back-to-back and crooks caught with their pants down. The collection of GST on the back of demonetisation has also gone up crossing the Rs 1 lakh crore mark per month many times over. Direct taxes collection too have gone up.

Two years ago, Narendra Modi launched demonetisation with three objectives to begin with--terminating black money in cash, killing fake currency and put an end to cash-based corruption. The objectives were noble and welcome in an economy where a parallel economy was thriving. The operation itself was unheard in such a scale in any comparable economy. About 86 percent of the cash in circulation vanished in one go when Rs 500, Rs 1000 notes were declared invalid. Till date, there is no hard evidence that demonetisation achieved any of the three initially stated objectives in the desired manner.

What suffered worst during the attack on cash was the cash-intensive industries and SME, MSMEs. When cash significantly disappeared from the system for a good 3-4 months, supply chains were taken a major hit. Things improved when cash returned to the system but many failed to survive. Reports emerged of several micro-units shutting shops which inevitably meant job losses and, in turn, demand slowdown.

Asking Prime Minister Narendra Modi to apologise to the nation for demonetisation that "wrecked" the economy, the Congress on Tuesday said it will observe a nationwide protest on Friday to mark the second anniversary of the note ban.

"Two years ago the Prime Minister announced demonetisation and gave three reasons for it - to curb black money, weed out fake notes and proscribe terror funding. Two years later, none of those objectives has materialised. "In fact, there is more cash in circulation today than it was two years ago when Modi announced demonetisation," Congress spokesperson Manish Tewari told the media here.

The Congress leader said that Modi should apologise to the people of India on 8 November (on the second anniversary) for his "Tughlaqian decree" of demonetising Rs 1,000 and Rs 500 notes, then in circulation.

"The Prime Minister should apologise to the nation on 8 November 2018, at same time for ruining and wrecking the Indian economy," said Tewari, adding that Congress leaders and workers will come out on the streets across the nation in protest against the "complete demolition of the Indian economy by this Tughlaqian decree of demonetisation".

Congress president Rahul Gandhi has time and again slammed Modi government's demonetisation move and the introduction of the Goods and Services Tax. Rahul had who referred to GST as Gabbar Singh Tax, said the government has destroyed the country's economy with decisions like these.

 


Updated Date: Nov 08, 2018 17:59 PM

Also See