One month after Prime Minister Narendra Modi announced demonetisation of high-value currency notes, the country is still grappling with cash crunch. The Reserve Bank of India, however, has announced that with three weeks left for the December 30 deadline to return the scrapped currency notes, as much as 81 per cent, or Rs 11.55 lakh crore — out of a value of Rs 14.17 lakh crore notes in circulation at the end of March 2016 — has already come back into the banking system.
WATCH VIDEO | One Month Of Demonetisation: Public Reaction
Here is all that has happened since the announcement on November 8:
The promise of curbing black money
In his televised address, the Prime Minister said that the demonetisation move was aimed at breaking “the grip of corruption and black money” in the country. Finance Minister Arun Jaitley said that the demonetisation scheme was a significant step towards dealing with corruption, black money, fake notes and terrorism. Across party lines, the move was lauded too for being a step in the right direction towards curbing the black money menace. A month later though, black money has taken a backseat in the government’s narrative with “cashless economy” becoming the main focus. RBI Governor Urjit Patel has also urged people to start using cash substitutes like debit cards and digital wallets, saying it would help India “leapfrog into a less cash-use economy at par with more developed nations.”
Cash crunch across the country
Soon after the scheme was announced, there were long and serpentine queues outside banks and ATMs. One month on, people continue to deal with the cash crunch. Queues outside banks continue even as banks across public and private sectors have complain of not having enough cash to meet the people’s needs. In the face of all this, finance minister on Wednesday said the “seven-decade old normal” that existed in society had been “disrupted” — which was needed for the country to move towards a “new normal”.
Opposition in Parliament
With the government struggling to inject new currency notes into the system, the Opposition has stalled functioning of Parliament. Trinamool Congress chief and West Bengal Chief Minister Mamata Banerjee was the loudest voice to shun the move as “draconian” soon after it was announced. Eight days later, when the Parliament’s winter session started, all the Opposition leaders had followed suit. Since then, both houses have been adjourned several times over Opposition protests. Former PM and Congress leader Manmohan Singh criticised the move in Parliament calling it a monumental mismanagement. PM Modi is yet to speak about demonetisation in parliament. Several union minister including Arun Jaitley, Venkaiah Naidu and Manohar Parrikar have defended the move in both the houses.
The government and the RBI have changed rules for withdrawal, exchange and deposit of cash several times since demonetisation. In days that followed the roll-out of new currency notes on November 10, Economic Affairs Secretary Shaktikanta Das held several press conferences to announce new rules. The use of old notes was completely scrapped out, and then the deadline was extended for petrol pumps, tolls and government medical stores. ATM withdrawal limits were repeatedly changed from Rs 4,000 to Rs 2500 to Rs 2,000, the current cap. RBI governor Urjit Patel has been largely silent amid all this. RBI on Wednesday said that demonetisation is still unfolding and that at this point, it was difficult to specify the exact date for lifting curbs on the daily and weekly limits on withdrawal of cash from ATMs and bank branches.
WATCH VIDEO | Parliament: BJP & Congress Engage In War Of Words Over Demonetisation
Deaths caused due to the effects of demonetisation
In the parliament on Wednesday, Congress asked who was responsible for the ‘deaths of 84 people who have died due to the hardships faced after the unplanned demonetisation.’ Jaitely, however, defended the decision and said that PM Modi had the “broad shoulders to face the consequences of this decision”, which has caused some “pain in transition” but also put India on the cusp of major change.