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P Chidambaram demands November 8 RBI meeting minutes be made public

He also questioned the government’s digital payment push, saying that there are “serious issues” of “privacy” involved.

By: Express News Service | New Delhi |
December 31, 2016 2:04:10 am
chidambaram, demonetisation, november 8, chidambaram demonetisation, demonetisation minutes, demonetisation meeting, GDP, P chidambaram, note ban, RBI, currency ban, indian express news, india news P Chidambaram. (ANI photo)

AS THE government’s 50-day deadline for the post-demonetisation situation to ease out came to an end, former finance minister P Chidambaram asked the Centre to make public the agenda and notes placed before the RBI board and the Union Cabinet, which took the currency withdrawal decision.

Alleging that the decision appeared to be “pre-scripted” and a “command performance”, Chidambaram said that demonetisation was the “single biggest case” of “total mismanagement, administrative collapse and widespread corruption”. He also questioned the government’s digital payment push, saying that there are “serious issues” of “privacy” involved.

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The senior Congress leader estimated that the GDP will take a hit of at least one per cent because of the decision and argued the government was making a “mistake” in assuming that the “people who are patient are not angry.”

Reacting to finance minister Arun Jaitley’s assertion that there has been an increase in direct and indirect collections, Chidambaram said while the increase in direct tax is more or less as projected in the Budget, the hike in indirect tax collection is to a large extent because of increase in levies of petroleum products.

He said there may have been some boost in tax revenues, but it was because the government had allowed payment of taxes in scrapped notes. “People will obviously seize the opportunity to pay arrears of taxes by using tender which has been declared illegal. That will happen whenever you do it and wherever you do it,” said Chidambaram.

The Rajya Sabha MP said that the increase in tax revenues had no “direct correlation to the performance of the GDP” and that even the RBI has forecast that GDP will take a hit by 0.5 per cent. “I think the finance minister should pose his questions to the RBI, and the RBI should answer that question,” he said.

Referring to the minutes of the meeting of the Board of Directors of RBI held on November 8 and the note placed before the Union Cabinet, Chidambaram said that the meeting was over in 30 minutes and was attended by three of the four non-official directors. He said while the RBI board should have 14 directors, 10 posts have been lying vacant for the last two and-a-half years.

“How did these three wise men and the RBI Governor reach the conclusion in 30 minutes that 86 per cent of the currency in this country should be demonetised? I want to know what was placed before the Board. What is the agenda note? What facts were placed? What was discussed? Was there any dissent? Did anyone vote against the decision….The RBI is obliged to disclose what happened in that meeting,” he said.

“Within minutes of the meeting coming to an end, the recommendation is sent to the cabinet. The cabinet as it was in waiting….approves it in another half an hour. And the PM goes on air and makes the announcement. It appears to me not a process which took its natural course, but a command performance where everything was pre-scripted and everyone was asked to play his role,” he alleged.

Chidambaram claimed that note ban was perhaps the “most momentous decision” taken without consulting key officials “who are directly, by virtue of the office they hold, connected with the decision”.

Rejecting the Government’s claim that the people have supported the move, he said time will tell whether the people are happy. “People are patient but don’t mistake a patient people for happy people,” he said.

On the government promulgating an ordinance, Chidambaram said it should have brought a bill on November 8 itself since it is a legal requirement. He asked the PM, who is expected to address the nation Saturday, to make a categorical announcement that all restrictions on money have been ended.

Chidambaram said there are “serious issues” of privacy regarding digital transactions. “In the US, 46 per cent transactions are by cash. In Germany…80 per cent of transactions are by cash, Austria is 80 per cent, Australia is 60 per cent….we are not against digital transactions.

High value transactions must be nudged into the digital mode…buying and selling property, high value jewellery, paying certain taxes…all that can be pushed to the digital mode. But if I want to buy personal effects…vegetables…buy something in a village market…why should that be moved to digital mode…There are serious issues of privacy…there are serious issues of cost to the payer or the payee,” he said.

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