Modi government failed to achieve objectives of demonetisation: Uttam Kumar Reddy

Hyderabad: After finance minister Nirmala Sitharaman provided data on the objectives of demonetisation, Congress MP Capt. N. Uttam Kumar Reddy said the statistics pertaining to Currency in Circulation (CiC) and the value of Notes in Circulation (NiC) provided by the finance minister clearly shows that none of the objectives of demonetisation was achieved by the Modi government.

On Monday, the finance minister gave a written reply to a question raised by the Congress leader during the Question Hour in the Lok Sabha on demonetisation. “The mission of the government was to move towards a less cash economy, to reduce the generation and circulation of black money and to promote the digital economy,” said the finance minister.

“The objectives of withdrawal of legal tender character of specified bank notes (Rs. 1,000 and Rs. 500), as stated in the Gazette notification S.O. 3407 (E) dated November 8, 2016, issued by the Government of India, was to contain the rising incidence of fake currency notes which were largely in circulation; to limit the usage of high denomination banknotes for storage of unaccounted wealth and to contain the rising level of using the fake currency for financing subversive activities like drug trafficking and terrorism,” said the finance minister in her reply.

Responding to her reply, Uttam Kumar Reddy said the BJP government has finally admitted that it has failed in achieving all the objectives of demonetisation it implemented in November 2016. “The data clearly shows that the Currency in Circulation (CiC) and Notes in Circulation (NiC) value almost doubled post-demonetisation. While the CiC, in March 2016, was Rs. 16,63,300 crores, it stood at Rs. 31,33,691 crores in March 2022,” he said.

As per the data furnished by the finance minister in the Lok Sabha, the volume and value of Notes in Circulation have increased significantly post-demonetisation. The volume and value of NiC in March 2016 were Rs. 9,02,660 lakhs and Rs. 16,41,500 crores, respectively, they increased to Rs. 13,05,326 lakhs and Rs. 31,05,721 crores in March 2022, the Congress leader said.

“Demonetisation was supposed to reduce black money by reducing cash in circulation. However, after demonetisation, the cash in circulation has continued to rapidly grow. The move also led to job losses, especially in the small and medium enterprises (SMEs) sector, which was already struggling due to the implementation of the Goods and Services Tax (GST) a few months earlier,” he opined.