Note Ban a ‘terrible mistake’ by Modi govt: Chidambaram

RSTV Bureau
Former Finance Minister and senior Congress leader P Chidambaram in Parliament House on on 31 January 2017.

Former Finance Minister and senior Congress leader P Chidambaram in Parliament House on on 31 January 2017.

Former Finance minister and senior Congress leader P Chidambaram has strongly demonetization of Rs 1000 and Rs 500 currency notes, terming it a “disaster of 2016”. Following his Friday’s remarks that BMC poll results, where BJP did exceedingly well, was not a referendum on Modi government’s note ban move, the former finance minister said its adverse impact on the country’s economy would be felt in the coming years.

“Why I say it is a disaster of 2016… as it has affected 125 crore people of the country,” Chidambaram said during a talk on “Impact of demonetisation of Rs 1000 and Rs 500 notes,” organised by Kerala Pradesh Congress Committee and Rajiv Gandhi Institute of Development Studies here.

“I think it is a terrible mistake. It is done without full information, without understanding the nature of black money …Without fully understanding the implications of withdrawing 2,400 crore notes from circulation… Without preparing the printing of new notes and also without understanding the role played by ATMs,” he said.

On its impact on country’s growth, the former Finance Minister said Indian economy will grow by 6 per cent, a fall of 1.6 per cent from the earlier estimate of 7.6 per cent, which was equal to Rs 2.40 lakh crore.

Singling out Prime Minister Narendra Modi in his criticism, he said, “for the folly of one person, the Prime Minister, India will suffer a loss of Rs 2.40 lakh crore in the current year. It will not recover next year also and its impact will be felt in few months of 2018-19.”

FILE: New Delhi: People stand in queues to withdraw cash from an ATM in New Delhi, December 9, 2016. Photo - PTI

FILE: New Delhi: People stand in queues to withdraw cash from an ATM in New Delhi, December 9, 2016.
Photo – PTI

Stating that none of the objectives like eliminating black money, corruption, funding of terrorist mentioned by Prime Minister at the time of demonetisation has been served, he said “in fact it has completely become counter productive”.

On the objective of making India a cashless country, Chidambaram said India cannot become a cashless economy and and there was no reason to go for it.

Which country has become cashless?, he asked.

In Germany, which has advanced in technology, 80 per cent of the transactions is in cash. In Australia it was 60 per cent, in Canada 56 per cent and the in the USA it was 46 per cent, he said.

“If 46 per cent is cash transaction is the USA, how can India become 100 per cent cashless. Is India completely Wi-Fi connected?… Is electricity available 24 hours a day and whether every Indians has a bank account?” he asked.

On the cost involved in cashless transactions, Chidambaram said “monetary transaction in India is about Rs one lakh crore per day and if it is digitally transacted, a third person is making Rs 1,500 crore per day”, he said.

(With inputs from the PTI)