Economy

Modi’s Demonetisation Plan Brings Bouquets, Brickbats and Words of Caution Too

Nitish Kumar said the move would be beneficial in the long run, but others like Mamata Banerjee, Sitaram Yechury and Thomas Isaac were critical of it.

A customer waits to deposit 1000 Indian rupee banknotes in a cash deposit machine at bank in Mumbai, India, November 8, 2016. REUTERS/Danish Siddiqui

A customer waits to deposit 1000 Indian rupee banknotes in a cash deposit machine at bank in Mumbai, India, November 8, 2016. Credit: Reuters/Danish Siddiqui

The Narendra Modi-led BJP government’s decision to withdraw Rs 500 and Rs 1,000 notes – which is expected to have far-reaching consequences on political funding and election expenditure in the future – has evoked a strong reaction from the political parties.

The most favourable support for the move came from Modi’s proclaimed mitra (friend) and Bihar chief minister Nitish Kumar who “welcomed and supported” the demonetisation move, saying it would be beneficial in the long run. “In the beginning, people might face some inconvenience but taking everything into account, it would yield positive results,” he said.

While the Janata Dal (United) leader said that this would “yield positive results”, most other leaders belonging to non-BJP parties were either critical of it or were guarded in their hailing of the move.

West Bengal chief minister Mamata Banerjee was among the harshest critics as she termed the demonetisation “heartless and ill-conceived” and one that could lead to a “financial chaos”. She claimed it was intended at diverting the attention from the Centre’s failure to bring back black money from abroad.

The leader of her primary opposition party, the Communist Party of India (Marxist), echoed her views. In a series of tweets, the party general secretary Sitaram Yechury termed the demonetisation move as a “complete jumlanomics.”

He added that the move was “poorly planned and not thought through” and meant “harassment for millions not connected to the banking system.”

Another scathing criticism of the move came from his party leader and Kerala finance minister Thomas Isaac who posted on his Facebook page that the move would bring the economy to a “complete standstill”.

“Prime minister is under the fallacy that black money is stored as loads of cash in sacks. This is absurd. The lion’s share of black money is abroad,” he wrote, indicating that Modi was not serious about the entire issue.

A development economist by profession, Isaac also noted that people not in possession of plastic money would suffer due to the transition from old to new high denomination currency notes.

Some of the state leaders also expressed concerns about the process of change. Uttar Pradesh chief minister Akhilesh Yadav demanded that the Centre should set up special camps to facilitate the exchange of currency since banks were not accessible from many rural areas.

He also demanded keeping the interests of the farmers and poor in mind, especially on account of the sowing and marriage season.

The Congress, which according to its spokesperson Randeep Singh Surjewala, “always supported any step against black money and will continue to do so,” gave several backhanded compliments to the Modi government for the demonetisation move.

“Modiji has withdrawn Rs 1,000 notes on one hand and introduced Rs 2,000 notes on the other. Does it not defeat his argument?” quipped Surjewala.

The parliamentary party leader of Biju Janata Dal Bhartruhari Mahtab supported the move to “weed out black money from circulation”. But he also offered a word of caution saying the next step should be “to keep a hawk’s eye on money transaction that may change hand now.”