Cash still king: Do PM Modi, BJP want Indians to forget demonetisation nightmare?

On the seventh anniversary of demonetisation, barring memes and cartoons shared on social media, there has been radio silence from the BJP, the prime minister and the finance minister

File photo of long queues outside banks across India after the Central Government demonetised Rs 500 and 1,000 notes on 8 November 2016 (photo: Getty Images)
File photo of long queues outside banks across India after the Central Government demonetised Rs 500 and 1,000 notes on 8 November 2016 (photo: Getty Images)

NH Business Bureau

The seventh anniversary of demonetisation, hailed in November 2016 as a revolutionary step to eliminate black money, terror funding and dirty cash, falls today, on 8 November, and is being greeted by the government with uncharacteristic silence.

There has not even been a peep out of the BJP's IT cell chief Amit Malviya, who posts every achievement and anniversary of the government. Could they have realised finally what a disastrous move it was?

No advertisements were issued, no event to mark the ‘historic’ occasion, no billboards were put up with Prime Minister Narendra Modi’s photograph. Union ministers, prone to celebrate even the launch of ‘Bharat Atta’, chose to ignore the milestone, forcing Congress MP Adhir Ranjan Chowdhury to wonder if the government was actually in mourning.

Worse, as against Rs 17 lakh crore worth ‘cash in circulation’ in November 2016, the amount has gone up to Rs 33.78 lakh crore in November 2023 according to the Reserve Bank of India (RBI). Eliminating cash was one of the objectives of demonetisation, but despite the determined push for digital transactions, what explains the increasing use of cash seven years later?

The Deccan Herald reported on Wednesday that a survey conducted by an the NGO Local Circles found that 76 per cent of the 44,000 respondents in 363 districts of the country claimed to have paid part of the amount in cash this year while buying property, house and land, while 56 per cent of the respondents claimed that a quarter of their monthly purchases were being made in cash.

The government is yet to release figures to justify demonetisation, described as "organised loot and legalised plunder" by former PM Dr Manmohan Singh. Speaking in Parliament on 24 November, 2016, Singh had urged PM Modi to find “pragmatic ways” to reduce the hardship of the millions whose lives had been thrown into disarray by the government’s decision. He cautioned that demonetisation could bring down India’s GDP growth by a massive two percentage points.

In 2017, Congress MP Rahul Gandhi recalled that he had called up Singh minutes after PM Modi had finished with his sudden 8.00 pm address to the nation, and announced that from midnight on 8 November 2016, currency notes in the denomination of Rs 1,000 and Rs 500 would no longer be legal tender.

Singh, Gandhi recalled, was silent for a long time while he kept saying ‘hello’ to figure out if they were still connected. After a long pause, he recalled Singh saying, "I was recovering from the shock. What have they done? This is criminal."

RTI responses later revealed that the RBI was taken into confidence barely hours before PM Modi made the announcement, to preserve ‘secrecy’. It was, however, widely believed that a privileged few knew about the move and that it was done primarily to cripple the Opposition ahead of the Uttar Pradesh assembly elections in 2017.

PM Modi had flown off to Japan after making the dramatic announcement and gloated at the sad plight of Indians who found that there were weddings in the family but they had no access to their own savings.

As the enormity of the people’s suffering became known, PM Modi had urged Indians to accept the measure as a shift toward a digital ecosystem to help maintain transparency in the financial system and create a cleaner economy.

PM Modi had publicly cried and sought 50 days’ time to streamline the system. Seven years later, it seems as though he would like Indians to forget the nightmare.

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