Author: Raija Susan Panicker
Date: February 7, 2017
The economy was strong and the timing of the notes ban was perfect, PM Modi said in parliament today, in a detailed defence of his decision to abolish 500 and 1,000-rupee notes in November last year, aimed at eliminating corruption and black money. Congress governments before his would have done it, PM Modi said, if there was any electoral benefit to be derived. The PM's address comes in the middle of crucial assembly elections in five states and just ahead of voting for the first of seven phases in Uttar Pradesh.
Replying to a motion of thanks to the President's address at the start of the Budget session, the Prime Minister hit back at opposition leaders who criticised the notes ban in their speeches during the debate. "You would have done this first, but this is not about keeping the seat of power, it entails a lot of hard work, so was not a priority for you. No worries. We do not shy away from work," PM Modi said.
He countered critics who have accused him of taking a hasty decision by saying, "Nothing was done in haste. To understand that you will need to study Modi." The ban, he said, was timed to coincide with the slump that follows a peak in trade during the Diwali festival. "We calculated that this would be the least disruptive time and the maximum impact would be over within 50 days. Our calculation was accurate," the Prime Minister said.
He was often asked, he said, why he had made the sudden decision to scrap high value notes when "things were going fine." It was a preventive step at a time when the economy was resilient, the PM said, asserting, "for demonetisation, this was the most opportune time. India could handle it best at this time."
The Congress' Mallikarjun Kharge had on Monday demanded that PM Modi apologise for the notes ban, which he said had caused people untold misery. Mr Kharge was supported by leaders of other opposition parties.
PM Modi said the notes ban has "cleansed India, ended the shadow economy," underscoring that "the strength of a policy is dependent on intent. If the intent is harmful, the policy goes into minus, not just zero."
The steps he said were not sudden, reminding the house that the Supreme Court had asked why successive governments had done nothing to curb black money. "We took it very seriously" and worked towards it, he said.
Rival parties have taken demonetisation to the election battleground, accusing the government of punishing the poor rather than the corrupt with the cash crunch that followed the notes ban announcement on November 8 last year, which took out 86 per cent of the cash in circulation. The currency shortage hit the rural poor and the middle class, farmers and small traders hardest and the government has admitted that it has also caused a slowdown of the economy, promising that will not spill over into the next year.
The elections in five states all through February and into March are the first big electoral test that the ruling BJP faces after the notes ban. It has credited gains in by-elections and civic polls to PM Modi's firm steps against corruption, saying these are a signal of the people's support for the move.