With the Centre being lauded by nationalists for its courageous move to demonetise Rs 500 and Rs 1000 currency notes overnight, and the Bharatiya Janata Party lapping up all the praises coming its way, the party would definitely not like to be reminded of its stringent opposition to the UPA government’s move to demonetise pre-2005 notes back in January 2014.
Unfortunately the Indian media is having a heyday at its expense by reproducing verbatim Meenakshi Lekhi’s – the then BJP spokesperson – expostulation of how then Finance Minister Chidambaram’s policy decision was pro-rich and anti-masses.
Quoting from the concluding paragraph of her write-up for the Economic Times:
“It is not going to affect those who have numbered accounts in Swiss accounts, but will affect those who do not have any bank account even in India. It is not going to affect those who have their savings in US $, Euros & pounds, but will affect those who save every paisa in Indian rupees.”
Lekhi had then termed it an “unjustified attacked on poor people”.
“The AAM aurat and aadmis – those who are illiterate and have no access to the banking facilities will be the ones, hit by such diversionary measures. People with small savings, no bank accounts and their small life savings, will be targeted. The present scheme does nothing to remove black money from circulation.”
According to Lekhi, all the black money stashers would legally convert their tender with ease. “In India 65% population do not have bank accounts, and store their money in cash. These people are largely illiterate, poor, older and live in remote areas. They will fall victim to middlemen who will scare them that the notes are worthless, and charge them hefty fees to convert them. They will also be ripped off by shopkeepers… saying the old notes can only be accepted at a discount,” she wrote.
She even goes to the extent of asking for a full and impartial inquiry by the RBI into the impact such a move would have on the Indian economy.
Fast forward to November 2016, the very same saffron party— spearheading the government at the Centre – is now harping about how the recent demonetisation move has effectively dealt with the black marketers and economic terrorists out to create havoc in India’s financial market at one go.
Going by an October 2016 article in The Hindu’s Business Line, the said move was also not all that sudden, and was actually in the works for quite some time.
The article quotes sources saying that the new Rs 2000 currency notes “have already been printed and….dispatched from the currency printing press in Mysuru.”
According to Business Line, the move assumed “significance in the wake of a demand from some quarters that notes of Rs 500 and Rs 1000 denominations be withdrawn to prevent hoarding of black money.”
Scroll takes the stance that “Modi’s move is also an effort to replace older notes with newer ones, but it has come without any prior notice, and so might hurt black money holders harder. But that also means banks have been completely unprepared for the replacement of up to 80% of all currency in the economy, meaning a massive liquidity squeeze over the next few months that hurts those who don’t have access to cashless transactions – like the rural and the poor – the hardest.”
Reports say that the total value of all bank-notes in circulation as of March 2016 was Rs 16,41,500 lakh crores, of which 86.4% comprised Rs 500 and 1000 currency notes.
Going by the on-ground situation, the long queues in front of ATMs, banks and post offices show no immediate signs of abating. Meanwhile, it continues to be a struggle for many to meet their daily financial transactions, since going cashless is still an alien concept to them.