Demonetisation anniversary: BJP, Congress set stage for a face-off
Arun Jaitley defends demonetisation as Manmohan Singh says it caused needless disruption in the Indian economy
New Delhi/Ahmedabad: Ahead of the first anniversary of demonetisation on Wednesday, the ruling Bharatiya Janata Party (BJP) and the opposition led by the Congress readied for a showdown, arguing their respective cases on the note ban. While opposition parties have decided to observe Wednesday as a “black day”, the BJP has dubbed it “anti-black money day”.
Former prime minister Manmohan Singh argued the opposition’s case, claiming that not only was demonetisation a flawed decision that had caused a needless disruption to the Indian economy, but it also risked unleashing harassment by tax sleuths probing illegal deposits. Finance minister Arun Jaitley defended the move, saying demonetisation was a watershed moment that had not only worked to curb illegal wealth creation, but also spurred the creation of a less-cash economy.
The impending face-off revives the debate on demonetisation, coincidentally in the middle of a campaign for assembly elections in Gujarat and Himachal Pradesh, and puts the spotlight afresh on corruption and black money.
“The fight against corruption and the anti-black money drive is an ethical and moral step taken by the government. Since it is ethical and moral, it has to be politically correct. demonetisation changed the agenda. We are moving towards a less-cash economy. The number of taxpayers has increased, digital currency increased, terror currency squeezed and high-denomination currency squeezed,” Jaitley told a press conference at the BJP headquarters in Delhi.
Emphasizing the benefits of demonetisation—specifically, the message it sent out against black money—Jaitley reiterated that the BJP-led National Democratic Alliance (NDA) had from its inception targeted black money by forming a special investigation team (SIT), amending the country’s bilateral tax treaties and coming up with an anti-black money law.
Countering this, Singh said, “The government says that they will pursue all those who made large deposits in banks after demonetisation. In other words, the taxmen will be unleashed on these individuals.” The former prime minister was addressing the media in Ahmedabad on Tuesday.
“Demonetisation, poor implementation of GST (goods and services tax) and the rise of tax terrorism under the guise of controlling corruption have seriously damaged the investment climate for small businesses,” Singh added.
Previously, in an intervention in a debate in the Rajya Sabha on demonetisation, Singh had likened it to “organized loot”.
Citing it, Jaitley alleged that “loot” happened during the tenure of the Congress-led United Progressive Alliance (UPA) in the allocation of 2G spectrum, the funding of the 2010 Commonwealth Games and the allocation of coal blocks.
“Congress and BJP differ in ethics. The primary objective of Congress is to serve the (Gandhi) family, whereas we serve the nation. During the UPA (tenure), there was policy paralysis, while structural reforms have been initiated during NDA,” Jaitley added.
Earlier in the day, the minister said in a Facebook post that Rs15.28 trillion had been deposited with banks. “From this inflow, the amount involving suspicious transactions based on various estimates ranges from Rs1.6 trillion to Rs1.7 trillion,” he said.
Some analysts defended demonetisation.
“Measures such as demonetisation and greater digitization of transactions in the economy, introduction of the goods and service tax, linking of most financial transactions with Aadhaar are all steps which will greatly improve transparency, compliance and tax buoyancy,” said Sudhir Kapadia, national tax leader, EY India.
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