“Ghost” of demonetisation come back to haunt the government: Chidambaram

Vastavam web: Former finance minister P Chidambaram today said the “ghost” of demonetisation has come back to haunt the government and alleged that the Rs 2,000 notes were printed only to help hoarders.In the wake of cash crunch in some parts of the country, he also said there was a possibility that people have lost confidence in the banking system due to the “bank scams” and they were not putting their surplus money into the banks.

“The ghost of demonetisation has come back to haunt the Govt/RBI. Why are ATMs still being re-calibrated even 17 months after demonetisation?Dismissing the statement of the Reserve Bank of India that there was no shortage of currency in the system as “unsatisfactory”, the senior Congress leader said if the RBI has printed and supplied sufficient cash, it must explain why there is a cash shortage.

“I also suspect that RBI seriously miscalculated demand for cash in the post-harvest season. Is it correct that currency in circulation has increased by only 2.75 per cent since demonetisation? If so, I maintain that Govt/RBI are not allowing money supply to grow at the same rate as the nominal GDP,” he said.He said he supported the digitisation, but the government cannot force the pace of digitisation or arbitrarily reduce the supply of cash.

According to officials, cash position across the country is improving fast with over 80 per cent of 2.2 lakh ATMs operating normally today.