Jaitley defends note ban; says rivals don''t understand

New Delhi, August 30

Finance Minister Arun Jaitley defended his government against criticisms that came its way after a report by the Reserve Bank of India (RBI) said that almost 99 per cent of the money that the central government has scrapped last November had returned to the banking system.

In a statement on Wednesday, Jaitley claimed that the objective of the demonetisation, as it was called, was to bring down cash dependence in the economy, bring in digitisation, and stem illegal hoarding of money.

“People with inadequate understanding of how to tackle black money linked note ban with money returned to system,” Jaitley said, as critics called the exercise pointless and disastrous. “Money has now been identified with its owner (sic).”

He also said that cash shortage caused by the central government’s decision had caused a “dip in terrorist and separatist activities” in Chhattisgarh — a Maoist hotbed — and J&K.

In references aimed at the ruling BJP’s rivals, chief among them his predecessor P Chidamabaram — who took to social media on Wednesday to criticise the decision —  Jaitley said. “People who haven't taken a single step against black money haven't understood aim of note ban. Deposits in banks don't legitimise it”.

“Note ban was not an exercise to confiscate money… The next step will be to cleanse political funding.”

'Disaster'

Senior Congress leader P. Chidambaram on Wednesday hit out at both the government and the RBI, as he called the decision a “shame”.

In posts on Twitter soon after the central bank’s report made headlines, the former finance minister said: “99% notes legally exchanged! Was demonetisation a scheme designed to convert black money into white?"

Rs 16000 cr out of demonetised notes of Rs 1544,000 cr did not come back to RBI. That is 1%. Shame on RBI which 'recommended' demonetisation

— P. Chidambaram (@PChidambaram_IN) August 30, 2017

RBI 'gained' Rs 16000 crore, but 'lost' Rs 21000 crore in printing new notes! The economists deserve Nobel Prize.

— P. Chidambaram (@PChidambaram_IN) August 30, 2017

RBI 'gained' Rs 16000 crore, but 'lost' Rs 21000 crore in printing new notes! The economists deserve Nobel Prize.

— P. Chidambaram (@PChidambaram_IN) August 30, 2017

"Rs 16000 cr out of demonetised notes of Rs 1544,000 cr did not come back to RBI. That is 1%. Shame on RBI which 'recommended' demonetisation.

"RBI 'gained' Rs 16000 crore, but 'lost' Rs 21000 crore in printing new notes! The economists deserve Nobel Prize."

Other leaders of the party were just as scathing: Congress spokesperson Randeep Surjewala called the exercise a "disaster" and a “massive folly” that cost 104 innocent people lives.

"Utterly failed #Demonetisation is nothing but a disaster in which 104 innocent people were killed while 'Corrupt' made 'Windfall Gains'.

"Demonetisation Scam,not only dented institutional sanctity of RBI,but also credibility of India abroad.PM should apologise to the nation," he said in a series of tweets.

"Rewind: Modiji's obfuscation exposed once again. On Ind. Day, PM claimed to have unearthed Rs 3 Lakh crore black money post demonetisation."

"Perspective: This Rs 16000 crore is just 1 pc of the total notes demonetised," he said.

"Dr Manmohan Singh predicted that #Demonetisation will reduce GDP by 2% and it did. Only the Economy suffered due to this massive folly!" 

A report by the Reserve Bank of India said on Wednesday that it got back Rs 15.28 lakh crore of the Rs 15.44 lakh crore that the central government had invalidated in November last year.

Prime Minister Narendra Modi had announced that the central government was scrapping old banknotes of Rs 500 and Rs 1000 in an attempt to "root out black money" in the country and stem funding to terrorist activities.

The decision had invalidated close to 85 per cent of the cash in circulation, and had sent crores of people across the country scurrying to banks. — Agencies