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Demonetisation: Would have resigned on November 8 if I was the FM, says P Chidambaram

On the upcoming Budget session, Chidambaram said that if he was still the finance minister he would “stick to the path of fiscal consolidation and keep fiscal deficit below 3 per cent and current account at 1 per cent’’.

Written by Esha Roy | Kolkata |
January 29, 2017 1:44:33 am
Chidambaram, P Chidambaram, demonetisation, demonetisation debates, Chidambaram on demonetisation, november 8, demonetisation effects, Chidambaram comments on demonetisation, india news Former Finance Minister P Chidambaram in Kolkata on Saturday. (Source: Express photo by Partha Paul)

“My real quarrel with demonetisation, because I don’t want to call it a lie, is that a decision of this magnitude, in a republic, and we are a republic, cannot be taken and ought not to be taken, by one person,’’ said former finance minister P Chidambaram speaking at the Kolkata Literature Festival on Saturday.

“Who are the three most important finance officials in the country? Can anyone even name the finance secretary? No — because for the past 70 days he hasn’t uttered a word about demonetisation. Do you know who the chief economic adviser is? He has not spoken a word on it either. This shows that they were either not consulted at all, or if they were consulted they disagreed, and if they disagreed they were too timid to put in their resignations,’’ Chidambaram added.

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On the upcoming Budget session, Chidambaram said that if he was still the finance minister he would “stick to the path of fiscal consolidation and keep fiscal deficit below 3 per cent and current account at 1 per cent’’.

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“I would also cut indirect taxes such as service tax, export duty, customs duty etc to ensure growth. I would not cut direct tax. There is an Oxfam report which has found that 57 persons in India control as much wealth as 50 per cent of the population of the country does. Inequality has increased. Cutting direct taxes will benefit a smaller number of people, while cutting indirect tax will benefit a larger number of people,’’ he said.

When asked whether he would accept an appointment to be the finance minister to Prime Minister Modi, Chidambaram said: “In the unlikely event that I was offered an appointment by the current administration, I would have resigned on November 8. This was a terrible decision, ill-conceived, terribly implemented and with horrendous consequences which would have been foretold if the Prime Minister had consulted someone who actually knows and understands money supply. Raghuram Rajan was removed because he had emphatically opposed the demonetisation move and I suspect that the government was in a hurry to implement it…they implemented it within 64 days of Urijit Patel’s joining.’’

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“I don’t know who will win politically from this move, but the Prime Minister has capitalised on resentment. This is exactly what Donald Trump has done to win the elections in the US,’’ said Chidambaram.

Speaking of cash transactions during elections Chidambaram said: “Fighting an election is an extremely costly affair. And if there is black money used then the Election Commission is partly to be blamed for keeping such an unrealistic limit of just Rs 35 lakh. The Election Commission has driven elections underground by doing this. I have 3,000 villages in my constituency, to even reach them takes money. With the election commission limit it means I have been given Rs 3 per voter, in my constituency of 12-13 lakh voters. That’s why we created electoral trusts like Wipro, Bharti Mittal’s and Aziz Premji’s so that they could give money legitimately for elections,’’ he added.

Despite his opposition to demonetisation, Chidambaram said there was no evidence that majority of the Jan Dhan accounts were used for money laundering post-currency withdrawal. “Evidences do not point out that there was wholesale use of Jan Dhan accounts for money laundering purposes. Nearly 25 per cent of the JanDhan accounts were having zero balances and in the remaining, the average balance was Rs 27,000,” he said. (With PTI inputs)

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First published on: 29-01-2017 at 01:44:33 am
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