PM's speech, a huge letdown

There were huge expectations that Prime Minister Narendra Modi would announce the lifting of restrictions imposed on withdrawal of money from the banks and ATMs and that he would give an account of the entire exercise of demonetisation when he made a television address on new year’s eve. Instead, it was a big let down. Neither was there any report card on the 50 days of demonetisation nor was there any announcement relating to the ‘continuation of war’ on black money, such as taking on benami transactions or assets. There was no reference either to cleaning up political parties of unaccounted funds. Instead, Modi made announcements as though the finance minister was giving out sops in his budget speech in Parliament. Overall, he did not answer any question that have arisen since November 8 when he announced demonetisation. What comes at the end of such a traumatic exercise, he has not spelled out. How long will this last? There is no answer. When almost all sectors of the economy are suffering because of cash crunch, the PM made no mention of the revival of the economy, or the amount of money that has come back into the system after November 8. There was no word on how much black money and fake currency the government has unearthed.

While citizens who suffered during the last 50 days expected a sincere balance sheet in terms of neutralisation of so-called parallel economy, Modi talked in generalities without any data or empirical evidence. For instance, when he said the Rs 500 and Rs 1,000 notes were used less for legitimate transactions and more for “parallel economy”, the assertion should have been backed by data or a credible study. Likewise, to suggest that counterfeit currency, Maoist and terrorist activities have suffered a blow because of demonetisation cannot be a justification for such a mammoth burden inflicted on citizens and the economy by withdrawing currency to the extent of 86% in circulation.

No one would grudge the support to farmers, small businesses and the vulnerable sections of the society. In any case, it is the primary duty of any government to let these sections have the first charge on the national resources. While the interest subvention for farmers and those seeking loans for low cost and affordable homes would help these sections, there is no relationship of such measures with the note ban. The best course would have been to announce these schemes in the Budget which is just a month away. These sops, coming just before the likely announcement any time of the upcoming elections in key states, including Uttar Pradesh, is unethical.