The Parliamentary Committee appointed by the Central government to assess the pros and cons of the note ban move is soon to table its report in the Monsoon session.
The reports that surface reinforces the apprehensions raised earlier. It reveals that the committee in its inquiry found that the move of ‘transforming’ the nation hailed by the Prime Minister as well as the ruling BJP as a strong weapon for eradicating counterfeit currency peddlers and thereby terrorist activities, is going haywire. Prime Minister Narendra Modi had created history by announcing the demonetisation of high-valued currency notes of Rs 500 and Rs 1000 from the midnight of November 8 last year, shocking the nation. When the people suffered hardships standing in serpentine queues in front of the banks and ATMs, the Prime Minister appealed to the people to bear the pain for the sake of the nation. However, not only has the ‘reform’ been fruitless but the Modi government has not been able to disclose the exact details even after nine months. Although the crisis of cash availability was resolved by issuing new notes of Rs 2, 000 and Rs 50, both the Centre and the central bank are clueless regarding the goals intended through the move. It’s amidst these changes that the report of the Parliamentary committee led by former union Law Minister Veerappa Moily who investigated the matter appeared before the Parliament.
The panel members including former Prime Minister Dr Manmohan Singh had criticized the note ban move as a ‘monumental mismanagement’ after analyzing the different aspects. All the calculations have misfired. One of the goals of the note-ban move was to eradicate fake currency. The Prime Minister had repeatedly said that about Rs 5 lakh crore to Rs 7 lakh crore are yet to be returned to the banking system. And Rs 4, 172 crore that came back to the system triggers skepticism. The cross border terrorist attacks frequent in Jammu and Kashmir rebutted the claims of putting an end to terrorism. There have been reports about black money being seized from terrorists. New notes introduced were affected by the illegal printing of fake notes. Of the 106 cases registered by the Income tax Department and Enforcement Directorate, fake currencies of new notes coming up to over Rs 230 crore were seized. Another failed attempt was the government’s much publicised campaign of cashless transactions. The committee has found that the financial transactions using cash have reached a state prior to the note ban move. The Modi government implemented the Jan Dhan Yojana (PMJDY) announcing at least one bank account for a person in every house. Reports showed that about 28.9 crore bank accounts were opened as a result. However, more than half of the Indian citizens do not go for bank transactions. The number of people who use internet banking, e-wallet and cards are still less. The move therefore, turned out to be fruitless.
On one side is the failure to achieve the intended goals. And on the other, the note ban has resulted in a setback that is unresolvable. The idiotic reform ruined the small scale and medium industries and enterprises. It’s the Sangh Parivar-affiliated trade union Bharatiya Mazdoor Sangh itself that sharply criticised the demonetisation move saying that it led to the loss of four crore employment opportunities and closure of over three lakh industrial units. It’s amidst these hullabaloo, that the government found alternate ways to get over the present monetary crisis gripping the country. The expenses in important sectors like health and education were cut short. Several of the education funds were stopped. Fee was raised and research seats were slashed. The government sought such inappropriate ways to reclaim the lost revenue through the failed reform. This too is ultimately a blow to the citizens and the country as a whole. In a report prepared by Chief Economic Advisor Arvind Subramanian on January 31st, the noteban move was skipped while counting the biggest achievements of Modi government in 2016. The Parliamentary committee that assesses the efficacy of the government schemes and reforms, in its report presented before the house last April had criticised that the demonetisation move impacted the economy. Its report is likely to reinforce these preconceptions more.
It’s difficult to believe that the Prime Minister and Sangh Parivar would have a rethink. Criticisms have already been raised that the Centre is fervently trying to cover up its failures and that it would be more gross. Apprehensions have surfaced whether stopping the printing of Rs 2000 notes and issuing notes of Rs 200 are part of the second phase of note ban move. Although the question was raised in the Rajya Sabha last week, Finance Minister maintained a silence. Unanticipated moves are the specialty of Modi government with majority of those moves landing the citizens into misery. And the demonetisation move has become one perfect example.