Demonetisation 2.0? Opposition gives political currency to cash crunch

Just as she was the first to criticise the Centre after its shock move to invalidate 86 per cent of the currency in circulation in November 2016, West Bengal Chief Minister Mamata Banerjee on Tuesday flagged the cash crunch in automated teller machines (ATMs) asking if a ‘financial emergency’ had been imposed in the country.

Other Opposition leaders, including Congress President Rahul Gandhi, too demanded answers from the Narendra Modi government on currency notes drying up in ATMs in several parts of India.

In his Lok Sabha constituency Amethi, Gandhi said the “terror of note ban” has again gripped the country and accused the Prime Minister of destroying the banking system.

On Twitter, Gandhi alleged Modi had “snatched” the Rs 500/Rs 1,000 currency notes from the pockets of every Indian and “given” it to Nirav Modi, but was neither speaking a word nor facing Parliament.

Senior Congress leader P Chidambaram also did not mince words, saying cash supply had been ‘arbitrarily reduced’. “The government or the Reserve Bank of India (RBI) cannot arbitrarily control the supply of cash. If the RBI has injected sufficient cash, it is obliged to tell the people why there is a cash shortage,” he said.

Finance Minister Arun Jaitley said the cash shortage was caused by an unusual spurt in demand in the last three months, and the “temporary shortage” in certain states is being “tackled quickly” and that there is “more than adequate” currency in circulation.

Even as a senior Bharatiya Janata Party (BJP) leader cautioned the media against spreading panic, Communist Party of India (Marxist) leader Sitaram Yechury said:  “ATMs were empty in November 2016. ATMs are empty now. The only party flush with cash is the BJP.” Yechury said the country is still paying the price of “a sudden midnight order of demonetisation”.

Yechury said demonetisation did not achieve of any of its stated objectives, including elimination of terrorism and fake currency. “But it has killed the Indian economy. The cash crisis tells us how Modi’s demonetisation disaster is still wreaking havoc,” he added.

Congress leader Ashok Gehlot said: “Modi government has ruined the banking system of the country and people have lost their faith in it.”

According to a PTI report from Gujarat, the cash crunch in the state worsened on Tuesday with several ATMs and banks running dry. Deputy Chief Minister Nitin Patel, who is also the state finance minister, acknowledged that banks are facing a cash crunch and said the government is in touch with the RBI to ensure enough cash is supplied to banks. The demand for cash has increased since this is the harvest and marriage season in the state.