New Delhi Correspondent
India marked on Thursday the second anniversary of the controversial demonetization as Finance Minister Arun Jaitley reiterated strong defence of the measure while opposition parties flayed it as “disastrous” and demanded an apology from Prime Minister Narendra Modi.
On the night of November 8, 2016, Prime Minister Narendra Modi, in a televised address to the nation, had announced a ban on Rs 1,000 and Rs 500 denomination bank notes with immediate effect, in a move that continues to divide public opinion across the country as the debate rages its intended effects on curbing black money and impact on the economy.
Jaitley, in a Facebook post, said demonetisation was “key step in a chain of important decisions taken by the government to formalise the economy”. In the aftermath of the notes ban, it was becoming increasingly difficult to evade the tax system, he added.
“An ill-informed criticism of the demonetisation is that almost the entire cash money got deposited in the banks. Confiscation of currency was not an objective of demonetisation. Getting it into the formal economy and making the holders pay tax was the broader objective,” Jaitley wrote.
He said “the system required to be shaken in order to make India move from cash to digital transactions. This would obviously have an impact on higher tax revenue and a higher tax base.”
The opposition attack on demonetization was led by none other than senior Congress party leader and former PM Manmohan Singh, the architect of India’s economic reforms in 1990s, who said in a statement that the “scars and wounds” the measure caused were getting more visible with time and the decision’s second anniversary is a day to remember how “economic misadventures” can roil a nation.
Singh said that beyond the “steep drop” in headline GDP growth numbers after demonetisation, the deeper ramifications of the step are still unravelling.
Small and medium businesses that are the cornerstone of India’s economy are yet to recover from the demonetisation shock, he said adding “this has had a direct impact on employment as the economy continues to struggle to create enough new jobs for our youth.”
The financial markets are volatile as the liquidity crisis wrought by demonetisation is taking its eventual toll on infrastructure lenders and non-bank financial services firms, Singh said.
The Congress has announced that it will hold a nationwide protest on Friday to mark the second anniversary of demonetisation. It has also demanded that Prime Minister Narendra Modi should apologise to the people for “ruining and wrecking” the economy.
West Bengal Chief Minister Mamata Banerjee tweeted today that demonetisation was a “disaster” for the country. on its second anniversary. “#DarkDay Today is the second anniversary of #DeMonetisation disaster.
Another opposition leader and Delhi Chief Minister Arvind Kejriwal of Aam Aadmi Party today questioned the rationale behind the note ban and termed it as “a self- inflicted deep wound” on the Indian economy.