P Chidambaram calls note ban biggest scam, FM tears into Cong

New Delhi: Former finance minister P. Chidambaram called PM Narendra Modi’s demonetisation drive “an absurd and thoughtless move” and “the biggest scam of the year”, which needed to be investigated. The Congress leader also termed the PM’s idea of a cashless economy “an outlandish expectation”, prompting Union finance minister Arun Jaitley to return fire and target the Opposition party.

Mr Jaitley said the main Opposition party’s “scandalous record is making it extremely uncomfortable with the Modi government’s anti-corruption campaign of which the demonetisation of high-value banknotes is a cornerstone.”

This was after Mr Chidambaram questioned the effectiveness of the action in the wake of recent cash seizures across the country and much of the scrapped currency coming back to the banking system with no major “black money windfall” expected for the government.   

Before banning high-value notes, Mr Chidambaram said, Mr Modi should at least have consulted his “own man” Yashwant Sinha, a former Union finance minister, so that the “monumental mismanagement” could have been avoided.  The government’s November 8 move led to a massive cash crunch, resulting in a string of deaths with people scrambling for cash, and hitting India’s largely cash-based economy.

Mocking the MP’s idea of a cashless economy, Mr Chidambaram said that to assume that India will go from 3 per cent to 100 per cent cashless in a few months, is an “outlandish expectation.”

Mr Jaitely, however, said demonetisation would help the world’s fastest growing major economy move towards being “a less cash economy” and digital payments, helping shore up tax revenues and check evasions.

Congress vice-president Rahul Gandhi also stepped up attack on the PM, saying his vision of a cashless economy has rendered the poor “cashless”, robbing them of their hard-earned money “The PM has brought honest people on the streets while the rich and the corrupt are taking money through the backdoor of banks,” said Mr Gandhi.  

Thirty-five days after the demonetisation announcement , long queues continue to form outside banks and ATMs mainly because banknotes worth R15.4 trillion were banned, but notes only worth R4.61 trillion have been issued till date.

Reacting to Congress statements, Mr Jaitley said that the party during its rule during 2004-14 did not take even a single step against either corruption or black money. “As far as corruption scandals were concerned, they peaked during that period,” he said.  

Mr Jaitley said  the present NDA government has started overhauling the system.  “We are ready to debate this issue in Parliament. Rise above slogans and look at the positive advantages that these changes in the system in the long run are going to bring to the economy as a whole,” added Mr Jaitley.

Meanwhile, senior Union minister Venkaiah Naidu accused Mr Chidambaram  and former PM Manmohan Singh of not having done anything to curb the menace of black money. He said they allowed “loot and plunder” through various scams. Mr Naidu said that demonetisation is a “strong pill for a long-time ill caused by Mr Singh, Mr Chidambaram and his party.