RBI Governor Urjit Patel will brief a parliamentary panel on January 19 on issues concerning demonetisation and its implications on the economy, sources said. The Standing Committee on Finance, which met on Thursday under the chairmanship of Congress leader M Veerappa Moily, was briefed about demonetisation by various experts. Independent experts who offered their view before the panel were noted economists Rajiv Kumar and Mahesh Vyas, former chief statistician Pronab Sen and NIPFP’s Kavita Rao. The experts, according to the sources, were divided on the government’s decision of cash recall.
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The panel also sought to know from the experts their opinion on the existing cash to GDP and tax to GDP ratios. The committee, the sources said, has called Patel on January 19 to brief the members about the contours of demonetisation and also the efforts being made by the central bank to ease cash crunch in the economy. The panel will also lend an ear to bankers and Indian Banks’ Association.
Before taking on record the view of RBI governor, the 31-member panel will question finance ministry officials and also IT experts on demonetisation and steps taken to promote digital economy. It was pointed out that the digital economy at present is 3 per cent and efforts are on to take it to 90 per cent.
Besides, other experts are likely to give their opinion on demonetisation, which came into effect from November 9. Following the decision to scrap old high-value notes, people are thronging banks to deposit invalid currency and also get valid ones to meet their requirements.
RBI has set withdrawal limit of Rs 24,000 per week for individuals, but due to the shortage of currency, many bank branches are compelled to ration it further. There has been a slew of changes in the regulations both by RBI and the government in the last six weeks, increasing hardships for both the public and bankers.
RBI on Wednesday rolled back its directive restricting deposits of demonetised notes of more than Rs 5,000 in bank accounts till December 30, the latest in a series of revisions.