New Delhi: Union power minister Piyush Goyal on Saturday said the administrative apparatus had limited time to prepare for implementing the discontinuation of large currency notes announced by Prime Minister Narendra Modi on 8 November although finance minister Arun Jaitley was privy to what was “meant to be a disruptive move" to stifle the black economy.
Speaking at the Hindustan Times Leadership Summit here, Goyal said the logistics requirement for replacing the discontinued currency notes is enormous. “We didn’t have enough time to prepare for some of the logistics issues on account of the secrecy requirement of such a massive step," the minister said, admitting that he had no prior knowledge of the 8 November cabinet decision to discontinue Rs500 and Rs1,000 banknotes from the midnight.
Goyal, however, indicated that finance minister Arun Jaitley had prior knowledge. “Everyone wanted to know how Mr Jaitley could keep the secret so well. A lot of his friends will admit that this is the kind of commitment and grit that a tall leader has. Despite being very open and transparent, when the time comes, he is able to take strong decisions and keep a secret. He obviously had to know about it, he is the finance minister," Goyal said.
The power minister who also holds the portfolios of coal, mines, new and renewable energy, said that once the decision to discontinue the large bills by the Reserve Bank of India was taken, it had to be conveyed to the government. “And the authority for it to be conveyed to is the finance minister," Goyal said.
Goyal defended the currency ban saying it will eventually boost economic growth rate and suggested political funding too could happen through e-wallets to bring more transparency into how parties fund elections. The minister appealed to people to consider transparent funding of political parties that champion their causes.
“It is time that we looked at funding all political parties that support your cause, liberally. A good and honest political environment and good governance is good for India. If we can replace any element of bad money (that goes into election funding) with good money, that is the best solution we can give to the people," the minister said. Goyal assured that political donations through e-wallets are welcome and that he would facilitate such a donation option for the ruling Bharatiya Janata Party with the help of state-owned SBI. At the moment, political donations less than Rs20,000 need not necessarily be through cheques.
Goyal did not approve of criticism of the demonetisation move by eminent economists like 2008 Nobel laureate Paul Krugman and former Prime Minister Manmohan Sigh, who on 24 November described the move as a “monumental management failure" and a case of “organised loot and legalised plunder."
Krugman had said on Friday that India could face significant short-term economic costs from the ban on large-denomination currency notes—a disruptive move, with no significant long-term benefits.
“If you are moving the unorganised economy to the organised economy, if transactions which were never reported as part of GDP numbers, get reported through banks, it will only add to the GDP. Even if someone postpones a transaction, it will be made up in the next two or three quarters," added Goyal. The minister said agriculture sowing was above predicted levels and sectors like cement, which showed a decline in sales initially, were back to normal. However, there was a surge in automobile sales made with cash payment, which Goyal said ought to be discouraged in order to improve surveillance over illegal and terrorist activities.
“India has tremendous potential to change. India loves disruptive change," Goyal said.