Today, on Tuesday, former Finance Minister P. Chidambaram described the note ban as the “worst attack on the poor” and said “even a natural calamity would not cause such pain.” Chidambaram was speaking a press briefing in Nagpur.
The former Congress Union Minister hit out at the Union government terming the demonetization move as the “biggest scam of the year” and demanded that it be investigated.
“How are these people getting Rs. 2,000? This is the biggest scam of the year. This is the one that should be investigated,” Mr Chidambaram said.
“This is an absurd, thoughtless move, and no one in the world has a good word for it. Every major newspaper and economist has condemned it,” he said.
He added that most people, including him, were struggling to get cash because it was not available in banks and ATMs.
Reacting to the comments, Union Minister Venkaiah Naidu said: “Give suggestions in parliament, not outside.”
He also said that before banning high-value notes Prime Minister Narendra Modi should at least have consulted his “own man” Yashwant Singh so the “monumental mismanagement” could have been avoided. In his opinion, “The government should have consulted at least Yashwant Sinha, he is their own man, and they could have consulted even Mr Manmohan Singh. There are over a 100 officers involved in budget making, till today its never leaked. What secrecy is this?” Yes, he pooh-poohed the secrecy behind 8th November note ban, he said, “Nobody was consulted. Are you suggesting that the former PM if consulted by the present PM, will betray a secret?”
Questioning the rationale behind the government’s move, Chidambaram asked how demonetization has benefited the country. “Has this stopped corruption, black money? The objective is not being served by this. Only poor people are being punished,” Chidambaram said, adding that the goal post keeps shifting.
“It is no longer about black money… now they have found a new one called cashless economy,” he said, adding that to assume that India will go from 3 per cent to 100 per cent cashless, in a matter of few months, is an outlandish expectation. “It is like motherhood and apple pie. No one speaks against them; similarly no one will speak against cashless society.”
What is being and will be impacted, Chidambaram said, is the country’s Gross Domestic Product (GDP), that is, growth. He said, “Long term impact that it will be negative for GDP. Even the RBI’s low projection shows it. Most economists say there will be a negative 1-2% impact.”
On being banks unable to provide cash to customers, Chidambaram asked whether the government made any attempts to calculate how much cash would be necessary. “What calculations did the government do to say that one can withdraw Rs 24,000 when banks don’t have enough cash to dispense? 45 crore people have been affected due to this, who will compensate them?”
He asked, “Why are District Cooperative Central Banks kept out of this whole exercise. That is (tantamount to) punishing farmers. There is no money for them to buy supplies…there is no money to buy seeds, to hire labor or buy fertilizers. And there are also the 5 crore people are dependent on daily wages. Who is going to compensate them?”
Commenting on the fact that no one appears to be protesting, or protesting overtly at least, Chidambaram said, “I believe people will not forget what is being done to them and will certainly not forgive the government for it. Just because people are not protesting in the manner that you are suggesting, it doesn’t mean that they are condoning what the government is doing.”
Congress is one of the sharpest critics of the announcement on note ban, which took away 86 percent of the cash in circulation.
He said that no country has a completely cashless economy, “Does US? Does Singapore have it? Where is electricity in country? Where are the machines?”
“It has broken the back of poor people. It is a case of khoda pahaad, nikli chuhiya (much ado about nothing),” He said.