Seven years after the Narendra Modi government demonetised ₹500 and ₹1,000 notes on November 8, 2017, leading opposition party Indian National Congress (INC) has reiterated its stand that the move had caused immense harm to the economy without achieving any of the proclaimed objectives.
In a statement issued on Wednesday, Jairam Ramesh, general secretary (communications), All India Congress Committee (AICC) said that demonetisation along with a badly designed and hurriedly rushed through GST regime finished off India's job generating small and medium businesses, caused a 45-year unemployment high, and ended the economic recovery that had begun in 2013, all while failing to achieve any of its stated objectives. "It led to a record concentration of wealth and power, particularly among a handful of large monopolies that have sustained the BJP financially even as the people continue to grapple with joblessness and price rise caused by the same monopolisation," Ramesh said.
Citing the IMF report from August 2018, he pointed out that there was a severe and long-lasting impact on growth with a disproportionate impact on the informal sector. He also quoted the Centre for Monitoring Indian Economy (CMIE) report which said that 15 lakh jobs were decimated from January to April 2017, a likely result of demonetisation.
According to the Congress spokesperson, demonetisation did not result in reducing the spread of black money, ending counterfeiting or making India a cashless economy. "9.3% of the demonetised notes were returned to the RBI making it a complete and total failure of exposing any black money. Only 0.0002% of demonetised money was found to be counterfeit. It had no effect on making India a cashless economy," he said, adding that in May 2023, RBI withdrew ₹2,000 notes, due to it being faked and counterfeited in high numbers.
Ramesh complained that the demonetisation was carried out with haste, incompetence, and with a total and complete disregard to expert advice from the RBI. "The RBI's central board put on record objections to demonetisation, stating that black money is mostly held in gold or real estate and not in cash. At least 74 notifications were issued within 50 days of demonetisation by the Modi government and RBI demonstrating the utter cluelessness behind the move," he said.