Friday, December 14, 2018

Modi Government Admits it Never Studied the 'Impacts, After-Effects' of Demonetisation

Modi Government Admits it Never Studied the 'Impacts, After-Effects' of Demonetisation
An elderly man, an ex-serviceman, cries after losing his spot in a queue at a State Bank of India branch - a defining image of Modi's demonetisation. Credit: Praveen Kumar, Hindustan Times

New Delhi: While responding to a question in the Lok Sabha on Friday, the government said that it has not studied or assessed the ‘impacts and after-effects’ of demonetisation. The minister of state for finance, P. Radhakrishnan, responded with a ‘no’ when asked if the government had studied the impacts of demonetisation on the economy.

On November 8, 2016, the Prime Minister Narendra Modi had announced the decision to suddenly demonetise notes of Rs 500 and Rs 1000. It led to severe hardships suffered by almost the entire population in the country. Modi had argued that a large part of the currency will be returned putting an end to the stock held as black money.

Recently, the agriculture ministry had admitted to a parliamentary standing committee that demonetisation caused severe hardship for farmers. It said that due to the withdrawal of currency notes, farmers were unable to buy seeds and fertilisers when it was time for them to sow.

“India’s 263 million farmers live mostly in the cash economy. Millions of farmers were unable to get enough cash to buy seeds and fertilisers for their winter crops. Even bigger landlords faced a problem such as paying daily wages to the farmers and purchasing agriculture needs for growing crops,” the ministry had said.

However, a week later the agriculture ministry withdrew the report and served show cause notices to officers who were responsible for the earlier report. The new report submitted by the agriculture ministry said that demonetisation had caused no adverse impacts on farmers in the country.

P. Radhakrishnan also said in his response on Friday that 99.3% of the money in circulation was returned to the RBI. “As per data published in Annual Report 2017-18 of the Reserve Bank of India, the total value of Specified Bank Notes (SBNs) in circulation as on November 8, 2016, post verification and reconciliation, was Rs 15,417.93 billion, and the total value of SBNs returned from circulation was Rs 15,310.73 billion,” he said.—The Wire

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