New Delhi: The Congress on Tuesday slammed the Centre over the exchange of Rs 2000 notes by terming the move “a royal welcome to the black money hoarders” and demanded a white paper over the issue.
“We demand the government should come out with a white paper on the issue. Why were Rs 2000 notes issued in the first place and why are they now being withdrawn?” Congress spokesperson Prof Gourav Vallabh said. "Such poorly thought through decisions dent the credibility of the Indian currency and impact its international exchange rate."
According to Prof Vallabh, PM Modi had earlier announced the "disastrous demonetisation" in 2016 which hit the unorganised sector badly. “The Rs 2000 notes were introduced after the demonetisation to curb black money. But now it seems the decision was taken in a hurry. I am very keen to meet the persons or the economists who had suggested to the PM to bring in Rs 2000 notes,” he said.
According to Prof Vallabh, as per the exchange offer, anyone can get notes of Rs 2000 exchanged in one go at a bank up to a limit of Rs 20,000. “This means that the person can exchange notes worth Rs 20,000 at one go and can repeat the exercise several times in a day. There is no need for him to present any identification or provide any other information to the bank," he said.
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The Congress leader pointed out that the exchange of Rs 2000 notes would adversely affect the economy and make the lower middle class and the farmers suffer. This is like a single window programme for those with black money,” said Prof Vallabh.
“There are 181 crore notes of Rs 2000 notes in circulation at present. Their value is worth Rs 3.62 lakh crores. If all these notes have to be exchanged over the next four months, it will involve 36 crore transactions and consume 2.5 crore man-hours of the banks assuming that a single transaction will involve 4 minutes,” he said.
The Congress leader pointed out that the exchange offer will involve a colossal waste of bank manhours, at a time when they should be focused on providing loans to push business activity in the country.
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“Further, while the PM is abroad in cooler climes, around 11 crore farmers and 6 crore small and medium enterprises and the middle class have been forced to stand in queues in 43 degrees Celsius temperature at the banks. The farmers and those in the small and medium sectors are the ones who need to keep Rs 2000 notes with them as working capital as they do not always have the facility to make online payments,” said Prof Vallabh.
The Congress leader further pointed out that the exchange of Rs 2000 notes would also reduce the discretionary consumer demand where people spend their extra incomes on travel and other luxury goods. “A low discretionary consumer demand would in turn reduce the GST collections which in turn will affect the various welfare schemes funded by taxpayers’ money,” said Prof Vallabh.
“So, while the poor and the middle class would suffer because of the exchange program for Rs 2000 notes, those who have black money will not. It is also interesting that the RBI has issued the circular for this exchange program but has also said that the notes will continue to be valid after that. If that is the case, then why withdraw the same,” he added.
Also read: Rs 2,000 note helped keepers of black money: Chidambaram