Finance Minister Arun Jaitley
Finance Minister Arun Jaitley

Note ban debate heats up as Arun Jaitley, Rahul Gandhi spar

Finance Minister Arun Jaitley cites formalization of economy, while Congress chief Rahul Gandhi calls the move a scam

New Delhi: Political sparring over demonetization escalated on Thursday, a day after central bank data showed that almost all demonetized notes have returned to the central bank, with finance minister Arun Jaitley contending that the move has helped formalize the economy and Congress president Rahul Gandhi alleging that invalidating the banknotes only helped crony capitalists.

The Reserve Bank of India (RBI) in its annual report said all but 10,720 crore of the 15.4 trillion banned currencies have returned to the central bank, which was seen as a failure of the government’s original intent to stamp out black money.

Jaitley, in a Facebook post, said that greater formalization of the economy has made it more tax-compliant, delivering a body blow to black money. “When cash is deposited in the banks, the anonymity about the owner of the cash disappears. The deposited cash is now identified with its owner, giving rise to an inquiry, whether the amount deposited is in consonance with the depositor’s income. Accordingly, post-demonetisation, about 1.8 million depositors have been identified for this enquiry," he added.

Congress trained its top gun to attack the government on demonetization, as Gandhi held a press conference at the party’s headquarters in the national capital.

“This cannot even be called a jumla (gimmick), this is a scam. The Prime Minister was very correct that he did what no one could do in 70 years in India, which is he wrecked the economy," Gandhi told reporters.

Gandhi’s line of attack on the government was that demonetization led to “wrecking" of the economy, job losses and hurt small and medium enterprises. Gandhi’s focus on these three issues is significant as it points to the fact that Congress is reaching out to the youth and small businesses, as well as hinting that the party plans to raise the issue electorally in the run-up to 2019.

In early 2015, Gandhi had alleged that Modi was leading a suit boot ki sarkaar (pro-rich government), putting the government on the defensive.

“Narendra Modiji has to reply now as to why demonetization happened? He has to answer to the youth of the country, to small shopkeepers, the small and medium businesses," Gandhi said. “He has to answer why money was taken from the common people and given to 15 rich people. This is the main issue of demonetization."

Soon after Gandhi’s media interaction, the ruling Bharatiya Janata Party held a press conference by national spokesperson Sambit Patra to counter the Congress president. “The people of the country have rejected not only the Congress party but also the take of Mr. Rahul Gandhi… Post demonetization in the last two years, why is Rahul Gandhi and his family so rattled," Patra told reporters adding that Gandhi “had nothing new to say".

In his press conference, Gandhi also attacked the Union government over the Rafale aircraft purchase and reiterated his demand for a joint parliamentary committee (JPC) probe into the issue.

“I asked them that questions should be asked but there should be a JPC so that there is transparency, everyone would know what happened in Rafale," Gandhi said. “I have no objections, Congress party has no objections, opposition parties have no objection. Jaitleyji is writing long blogs, but he hasn’t said anything on JPC."

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