One year of demonetisation: 5 questions Modi government must answer now
Irrespective of the ideological currency one may hold, there is no denying that demonetisation was not launched just to get more people to punch in tax returns (not even actual tax payments) or push up digital transactions from abysmally low levels. Demonetisation was a colossal disruption and intended, indeed, towards bigger tangible results beyond the vague hunt for dormant (not shell) companies.
Besides the chaos that it unleashed on the economy, the note ban turned out to be India's biggest policy mystery after 99 per cent of the high-denomination notes made their way back into banks.
It has been a year since the government quietly unleashed a crackdown on dormant companies for their misadventures during the currency clamp. We can now assume that the revenue and banking mandarins are armed with adequate data to do away with the vital mysteries of demonetisation.
On the first anniversary of demonetisation, the government owes answers to the following questions to India's ordinary citizens, who went through unprecedented pain and agony during and after the note ban:
Question: Who were those "poor" who opened thousands of Jan Dhan accounts and deposited crores of rupees in old and new accounts during the note ban? A huge chunk of this money had reportedly been withdrawn subsequently.
Reasoning: The operation and trajectory of Jan Dhan accounts is the biggest puzzle of the note ban. Post-demonetisation, 23.3 million new accounts were opened under PMJDY, the bulk of which (80 per cent) was with the public sector banks. Deposits under PMJDY accounts increased significantly post-demonetisation. According to a March 2017 RBI report, the total balance in PMJDY deposit accounts peaked at Rs 74,600 crore as on December 7, 2016 from Rs 45,600 crore as on November 9, 2016 - an increase of 63.6 per cent.
As news reports kept floating about the misuse of these accounts to convert black money into white, the government capped deposits into PMJDY accounts at Rs 50,000 on November 15, 2016. Although deposits declined to Rs 64,300 crore by March 1, 2017, they were still higher by 41 per cent over the level of November 9, 2016.
Gujarat had registered the highest (94 per cent) rise in Jan Dhan deposits during the demonetisation followed by Maharshtra, Rajasthan, Jharkhand, Haryana and UP - the finance ministers told Lok Sabha on February 3, 2017.
Question: How much cash was transacted through the government (centre and state) treasuries, government/PSUs accounts in various banks during the days of demonetisation?
Reasoning: Government treasuries and accounts had been kept free from the currency ban or cash transactions limits. Several government utilities had been specifically allowed to accept payments in demonetised currency during the note ban.
Also, the government treasuries received fresh notes, on priority, against their pile of old cash from the RBI during the currency rationing.
Question: How many old notes reached banks via current accounts of businesses, including big corporates?
Reasoning: As dormant companies have been found involved in currency laundering, it is reasonable to expect that the government will have adequate information about the use of active business cash accounts worthy of scrutiny during the note ban.
Question: The nation deserves to know more about the transactions in the accounts of political parties and expenditure on political extravaganzas during the note ban.
Reasoning: Right in the middle of the demonetisation ordeal, the government had allowed political parties to deposit old Rs 500 and Rs 1,000 notes in their accounts.
They are already exempt from income tax, provided the donations taken are not more than Rs 20,000 per individual and sufficiently documented. However, after severe criticism, this facility, it was claimed, was withdrawn, but there is no harm in sharing available data in order to make politics credible.
Last but not the least
Question: After three weeks of the note ban, Prime Minister Narendra Modi had asked BJP legislators and parliamentarians to submit details of their bank transactions between November 8 and December 31 to party chief Amit Shah.
Where are the details of those accounts?
Reasoning: Caesar's wife must be above suspicion. Policy failures are bearable not transparency failures. In spite of the pain and agony that the country's citizens suffered, they stood the test of demonetisation. It is high time the government comes clean on the actual benefits of demonetisation that don't require the "long-term" to reflect results.
Also read: How Modi government failed to spot its biggest success story