Former Finance Minister P Chidambaram addressed the media in Nagpur on Tuesday and hit out at the government over the demonetisation scheme, calling it the biggest scam of the year and must be investigated. He said that when he could not get Rs 2000 notes, how did these notes found their way to individuals who were being raided throughout the country. He then spoke about the availability of cash at banks asked as to what calculations the government did so that one could withdraw Rs 24,000 when there was no cash available in the bank. He said that every bank was crying about having no cash to dispense and questioned the government’s statement that there was cash. He then reciprocated former Prime Minister Manmohan Singh and said that this was a case of monumental mismanagement.
He further spoke about how the District Cooperative Central Banks were being kept out of the whole exercise and said that it was punishing the farmers as they had no money to buy any supplies.He said that it was because of demonetisation that the farmers were suffering and there was no money to buy seeds, hire labour or buy fertilisers. He then spoke about the ’45 crore’ people dependent on daily wages who have been affected by demonetisation and asked as to who would compensate them.
Chidambaram said that every major economist, every newspaper had condemned the move and called it absurd. Chidambaram then addressed the elephant in the room and talked about changing the narrative of the desired objective of demonetisation. He said that the government had shifted from the objective being black money to the objective being a cashless economy. He asked if developed economies like the US and Singapore are cashless and questioned the supply of electricity and machines in the country.
He said that the demonetisation had broken the back of the poor whereas the rich remained unaffected. Chidambaram was of the opinion that if the government truly had to withdraw higher denomination notes, it could have been done within the course of one year. The long-term impact of the drive would be negative for the GDP; RBI’s low projection shows it, most economists 1-2% negative impact would happen, he added.
He then said that the people would not forget what was being done to them and would certainly not forgive the government for it. He added that just because the people wee not protesting in the way the government was suggesting that did not mean they were condoning the government’s move. He said that even a natural calamity might not have caused so much trouble for the common and poor man. He said that confidence in Indian economy had been severely dented. He added that the credit growth was the lowest in 20 years; the green field investments and aggregate demand had also gone down.
Chidambaram then went on to reciprocate Congress VP Rahul Gandhi’s statement that PM Modi did not consult anyone before making the announcement. He was of the opinion that the government should have at least consulted Yashwant Sinha or even former PM Manmohan Singh. He concluded by saying that the expectations of making India from being 3% cashless to 100% cashless in a matter of a few months were outlandish.