"Never before in the history of independent India has the Prime Minister declined to meet the delegation of a state. Having served as Chief Minister yourself, I hope you can understand the gravity of this decision and the dangerous precedent it establishes," he said in a letter to Modi.
He said the Kerala Legislative Assembly had unanimously resolved to send an all-party delegation to discuss problems related to the demonetisation policy.
The senior Congress leader also hit out at Modi, accusing him of evading a constructive discussion in both houses of Parliament on the demonetisation issue, "something that has been consistently demanded by all opposition parties for the past 16 days."
"This undermines Parliament's sovereignty and ignores the suffering and pain that demonetisation has caused the people of India," Chandy said.
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He said the restrictions on withdrawal of cash from co-operative banks has crippled the co-operative sector and brought it to a grinding halt.
He said the sector, which accounts for over Rs 1,30,000 crore of total deposits in Kerala, plays a crucial role in sustaining the state, especially the rural economy.
Chandy said that all parties in Kerala, except BJP, had passed a resolution in the assembly, requesting the union government to ease the restrictions so that the co-operative sector can tide over the present crisis.
He said the Prime Minister should take Parliament and all state governments into confidence to evolve holistic strategies to solve this crisis.