Centre’s data proved demonetisation was a total failure: Uttam

Lok Sabha member N. Uttam Kumar Reddy was responding to the written reply given by Union Minister Nirmala Sitharaman to a question raised by him during the Question Hour in the Lok Sabha

File photo of Congress Lok Sabha member N. Uttam Kumar Reddy. Mr. Reddy in Lok Sabha said the Modi government failed to achieve objectives of demonetisation, on March 13, 2023. | Photo Credit: SPECIAL ARRANGEMENT

Congress Lok Sabha member N. Uttam Kumar Reddy said that the BJP Government has finally admitted that it has failed in achieving all the objectives of demonetisation it implemented in November 2016.

Responding to the written reply given by Union Minister Nirmala Sitharaman to a question raised by him during the Question Hour in the Lok Sabha on March 13.

Mr. Uttam Kumar Reddy said that the statistics pertaining to Currency in Circulation (CiC) and the value of Notes in Circulation (NiC) provided by the Finance Minister clearly show that none of the objectives of demonetisation was achieved by the Modi Government.

The Finance Minister, in her written reply, said that the mission of the government was to move towards a less cash economy to reduce the generation and circulation of black money and to promote the digital economy. The objectives of withdrawal of legal tender character of specified bank notes (₹1,000 and ₹500), as stated in the Gazette notification S.O. 3407 (E) dated November 08, 2016, issued by the Government of India, was to contain the rising incidence of fake currency notes which were largely in circulation; to limit the usage of high denomination banknotes for storage of unaccounted wealth and to contain the rising level of using the fake currency for financing subversive activities like drug trafficking and terrorism.

“Demonetisation was supposed to reduce black money by reducing cash in circulation. However, after the demonetisation, the cash in circulation has continued to rapidly grow. Even relative to the size of the economy, i.e. the ratio of cash to GDP has grown from 8.7% in March 2017 to 13.7% in March 2022.

“Similarly, the volume and value of Notes in Circulation have increased significantly post-demonetisation. The volume and value of NiC in March 2016 were 902,660 lakhs and ₹16,41,500 crore respectively. It increased to 13,05,326 and ₹31,05,721 in March 2022. What was the impact of demonetisation after it caused immense suffering to almost all citizens of the country?,” asked Mr. Uttam.