Although Finance Minister Arun Jaitley holds considerable clout in the Narendra Modi government, his mere words on television would do little to assuage the hardships faced by the common man owing to the demonetisation scheme as the government and its institutions run only on orders available in black and white.
That explains why the Jaitley clarification on Monday sounded more like a stout rebuttal of his own ministry as also of the Reserve Bank of India official statement on deposits made beyond Rs 5,000 in old demonetised Rs 500 and Rs 1,000 currency notes. In reality, it means nothing to the banks and to thousands of harassed customers. It is the RBI and the finance ministry's order which is final and binding to all commercial banks both public and private.
Frequent change of goal posts, one order overriding another, another nullifying yet another previous order, no matter who announced the previous order, the Prime Minister, Finance Minister, economic affairs secretary or an official statement or even public advertisements issued by the ministry, nothing deters the government from and the RBI to reverse it overnight and put its own citizens to a greater peril. The Indian Express says that the order on Monday by RBI and finance ministry putting restrictions on deposits of over Rs 5,000 is order number 59 since 8 November when Prime Minister Narendra Modi had announced demonetisation.
The move has created trust deficit against Modi government, as also panic among those who had not yet deposited old currency notes they have with them. Many of them had been waiting for further shortening of queues at the banks or were just taking it leisurely to go to the banks as the 30 December deadline approaches. It should be a matter of concern for the ruling BJP and the Modi government that this trust deficit is not limited to political rivals or to permanent cynics of Modi government or those who for various reasons were opposed to Modi and BJP. It is now spreading to those who had been strong votaries of Modi government and the Prime Minister's leadership abilities.
A Facebook post by Indian Institute of Mass Communication, director general, KG Suresh, posted on Tuesday afternoon is interesting.
His message is open to interpretations, even as he makes a guarded comment, he says a lot and reveals the kind of public sentiments that he may have seen after the latest flip-flop by the government. This writer met some other people including homemakers who were very anguished with continued and often contradictory orders by institutions concerned. Same is true for statements issued by people at the top.
Based on contradictory positions taken by Prime Minister, Finance Minister and Economic Affairs Secretary, this writer had earlier written, who should people at large believe.
See what Jaitley said on Tuesday night in clarification statement: "If they go and deposit with bank any amount of currency no questions are going to be asked to them and therefore the 5000 rupee limit does not apply to them if they go and deposit it once."
Contrast that with RBI circular issued to all banks: "Tenders of SBNs in excess of ₹ 5000 into a bank account will be received for credit only once during the remaining period till December 30, 2016. The credit in such cases shall be afforded only after questioning tenderer, on record, in the presence of at least two officials of the bank, as to why this could not be deposited earlier and receiving a satisfactory explanation. The explanation should be kept on record to facilitate an audit trail at a later stage. An appropriate flag also should be raised in CBS to that effect so that no more tenders are allowed."
A finance ministry statement issued around the same time was in sync with RBI statement: "The banks have been advised to conduct due diligence regarding the reasons for not depositing these notes earlier. Amounts of Rs.5000 or less may continue to be deposited with banks in the customer’s account, as at present. However, cumulative deposits exceeding Rs.5000 between 19th and 30th December, 2016 will be as per the procedures advised by RBI in respect of deposits exceeding Rs.5000 as stated above. Further, an opportunity has been given to the public to make the payments towards tax, penalty, cess/surcharge and deposit under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) 2016 with the old bank notes of Rs.500 and Rs.1000 denomination upto 30th December."
The finance ministry rationale for the same order was: "Already more than five weeks have elapsed since the time of the announcement of the cancellation of the legal tender character of these notes. It is expected that, by now, most of the people would have deposited such old notes in their possession. Keeping this in view and to reduce the queues in the banks, it has now been decided that amounts exceeding Rs.5000 in old notes can be deposited only once between now and 30th December, 2016."
From the clarification or rebuttal issued by the finance minister suggests that he either didn't know of the statement issued by his own ministry or was made to salvage the situation after the government realised that the popular opinion was turning against it. The order also fall flat on Jaitley's earlier statement advising people to go to banks at later dates to avoid long queues and a public advertisement issued by ministry of finance on 11 November.
A senior public sector bank official told Firstpost that the banks can't by words spoken over television by finance minister, it has to abide by what RBI circular says. If finance minister is serious in what he says he should ask his ministry and RBI to modify their circulars dated 19 November.
The official added that Jaitley's oral clarification would meet the same fate as his government's announcement of giving Rs 2.50 lakh to people in whose families a wedding was planned till 30 December. The RBI circular on the release of money from banks to customers made it so difficult that only most industrious and pursuant ones could avail the waiver.
Take a look on kind of conditions that RBI had imposed on withdrawal of Rs 2.5 lakh for marriage purposes: "Withdrawals are permitted only from accounts which are fully KYC compliant; Withdrawals can be made by either of the parents or the person getting married. (Only one of them will be permitted to withdraw); Since the amount proposed to be withdrawn is meant to be used for cash disbursements, it has to be established that the persons for whom the payment is proposed to be made do not have a bank account; The application for withdrawal shall be accompanied by following documents -- (a) evidence of the wedding, including the invitation card, copies of receipts for advance payments already made, such as Marriage hall booking, advance payments to caterers, etc; (b)A detailed list of persons to whom the cash withdrawn is proposed to be paid, together with a declaration from such persons that they do not have a bank account. The list should indicate the purpose for which the proposed payments are being made."
The banks were asked to keep a proper record of the evidence and produce them for verification by the authorities in case of need. The scheme will be reviewed based on bona fide use thereof.
After scoring a landslide win in Chandigarh municipal polls, the morale in BJP is high. Amit Shah termed it as a kind of verdict on demonetisation: "After demonetisation was announced five states have had municipal polls, and people have approved of the BJP. Every single poll that has taken place after 8 November and where the BJP has won, people have accepted the move." Modi tweeted "Thank you to the people of Chandigarh for supporting @BJP4India & @Akali Dal. This shows the importance people attach to good governance."
Ahead of assembly elections in Uttar Pradesh, Uttarakhand and Punjab, BJP should be wary of its own complacency.
Updated Date: Dec 20, 2016 23:04:40 IST