Demonetisation an utter flop, says Harish

Minister cites Nirmala’s speech in LS, says none of the objectives claimed by the Centre as reason for note ban met
Finance Minister T Harish Rao
Finance Minister T Harish Rao

HYDERABAD: Pointing to Union Finance Minister Nirmala Sitharaman’s disclosure regarding demonetisation in Parliament on Monday and the silence of BJP leaders on the issue as proof that demonetisation was a massive failure, Finance Minister T Harish Rao on Tuesday said that none of the objectives behind the decision of the Centre to ban currency notes of Rs 500 and Rs 1,000 were realised.  

Addressing the media at the BRSLP office in Hyderabad, Harish Rao said that the first objective, ostensibly to prevent fake currency from circulating in the country, was not realised, as RBI data shows that fake currency increased by 54% after demonetisation.

On the claimed objective of increasing digital payments by reducing currency in circulation, Harish Rao said that before the note ban, the currency in circulation was 11% of the GDP and it has now increased to 13%. “Rs 500 and Rs 1,000 notes were banned and Rs 2,000 notes introduced, larger currency notes were still under maximum circulation,” he said.

“The mission of the government is to move towards a less cash economy to reduce generation and circulation of black money and to promote digital economy,” Sitharaman informed the Lok Sabha on Monday, thus acknowledging that the objective of demonetisation was not yet achieved as the currency in circulation has more than doubled in just five years.

“As per the Central Board of Direct Taxes, black money has increased. In 592 cases which have been filed, black money amounting to Rs 40,000 crore has been seized. On the other hand, they have spent Rs 21,000 crore on printing new currency notes, using which a project could have been built,” Harish Rao said.He said that the stated objective of preventing terror funding and drugs was not achieved, and that the entire idea of demonetisation was an “utter flop.”

Accusing the Centre of implementing note ban without giving the idea a proper thought and careful planning, the State finance minister said that the decision has not only affected the economy adversely, but has also claimed the lives of 108 people who died while standing in the queues to draw their own money.

“We had faith in Prime Minister Narendra Modi, the reason why we supported demonetisation. But the Centre failed to prove its commitment by its actions,” he said.

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