Chidambaram slams Modi Govt’s “terrible” demonetisation decision

In a speech in the Rajya Sabha on Thursday, Congress leader P Chidambaram mocked the Government’s push for digital payments and ‘transparency’ and tore into the Union Budget and the decision to demonetise ₹500 and ₹1,000 notes. Here follow points and quotes from the former Finance Minister’s hour-long speech. The entire speech can be viewed at the link below.

On Cashless, Digital Economy

"A young lady wants to buy lingerie. Why should there be a record? A young couple wants to take a secret holiday. Why should that be recorded? I want to give money to my daughter-in-law for her expenses without the knowledge of my son. Why should there be a record? An adult wants to buy adult diapers. Why should there be a record of that?” said the former Finance Minister about the push for digital payments and cashless economy while initiating the discussion on the general budget

"There are serious issues of privacy involved which are respected in any democracy," he said, adding that people can't be told to go to the village fair and buy potatoes and tomatoes for ₹7.50 and use credit cards.”

Chidambaram referred to a village in the national capital region which was declared the first digital village in the region and said "You go there and the people ask 'What digital?' It is very difficult to get away with a lie. The best way to do so is to utter the biggest lie."

Taking a dig at the government, Chidamabaram said RBI officials are busy counting the notes physically. "You speak about digitisation. First, teach that to the RBI. Every rupee has come back, except in Bhutan, Nepal and NRIs, whose money can't come now, because you breached your promise to them."

On Demonetisation

"Don't even try to defend demonetisation. At least spare us the ignominy of listening to this defence."

"The NSSO says 15 crore people in this country are daily wage earners. 25.5 crore workers are daily income earners. 40 crore people were completely devastated by demonetisation for eight weeks. These 40 crore people may forgive you, but they won't forget the experience"

"Why should you demonetise and then remonetise" and questioned the government’s decision to replenish ₹9 lakh crore worth of new currency notes as against ₹17 lakh crore old notes that went out of circulation.

On the Union Budget

“The budget has been a great disappointment…in an economy that has admittedly slowed down, your Budget contracts government expenditure," Chidambaram said, adding that capital expenditure has been curtailed.

"You shifted money from defence research and added it to defence capital," he said, pointing to the allocation of ₹86,484 crore and adding that if the money for research was subtracted, then the actual defence outlay will be much less. The Congress leader noted that the revised estimate came to over ₹71,000 which meant that "either you are unable to spend the money, or you don't have the money to spend".

On jobs, unemployment

"The most vocal angst is about jobs. There are simply no jobs being created and jobs have been taken away. This is the angst that brought young people to the Marina [beach in Chennai]."

Quoting figures, the Congress leader said 75% of all small and medium industries are closed and then went ahead to state that these figures were "as per your (affiliate) trade union, the Bharatiya Mazdoor Sangh."

"Everybody has different concerns. Some are concerned about intolerance, ban jeans, ban books, ban authors, ban beef... We have to find jobs for both the uneducated and the educated," Chidambaram said.

On farmers

"There is nothing in the Budget speech about Minimum Support Price. Why aren’t you giving meaningful increases that take note of inflation in your MSP?... I am saying I need money to educate my child. I need money to start a small business for my son. I need money to conduct the marriage of my daughter. And you are giving me money to conduct my funeral. Is this the way to treat farmers of this country?" said Chidambaram, referring to the Pradhan Mantri Fasal Bima Yojana.

On RBI's decision not to cut policy rate

"RBI does not believe your numbers. The Governor has said they are moving from an accommodative position to a neutral position. He has no faith in the story that you are projecting. All bank chairpersons, who ordinarily sing the RBI's praises, say there is no room to cut the lending rate.”

“How will investment take place then? Capital is flowing out, investment intentions are declining, credit growth to industry is negative, how is your industry going to grow?"