Govt, RBI strapped for reasons to explain cash crunch: Opposition

The Congress and other Opposition parties on Wednesday criticised the Centre and the Reserve Bank of India’s (RBI’s) ‘lack of planning’ to provide automated teller machines with sufficient cash on the occasion of Akshaya Tritiya.

Trinamool Congress Rajya Sabha member Dinesh Trivedi asked the government to reveal the ‘real reasons’ behind the cash crunch across the country. “I feel that the real reason for the cash crunch is because the government has perhaps decided to discontinue the Rs 2,000 denomination currency notes,” Trivedi, who is a member of the Parliamentary Standing Committee on Finance, said.

Congress spokesperson Pawan Khera said the harvest season, weddings, and Akshaya Tritiya have turned into an occasion of sorrow instead of joy because of the cash crunch.

“The government is coming up with new excuses and theories about the cash crunch. Is the problem with the government’s planning or is it with its intent? Or is it that they are just inept at governance,” Khera asked, pointing to the trust deficit that has built among people for the banking sector.

Senior Congress leader P Chidambaram asked the RBI to explain why there is a cash shortage when it claims it has printed and supplied sufficient cash.

“Is it correct that currency in circulation has increased by only 2.75 per cent since demonetisation? If so, I maintain that the government and the RBI are not allowing money supply to grow at the same rate as nominal GDP,” he tweeted, adding the “ghost of demonetisation has come back to haunt the government and the RBI”.

Chidambaram said he suspected the RBI seriously miscalculated the demand for cash in the post-harvest season, and ordinary people are withdrawing cash but not putting into banks their surplus cash. “It is possible that there is some loss of confidence in the banking system, thanks to the bank scams,” the former Union finance minister said.

Chidambaram said the Modi government, after invalidating Rs 500 and Rs 1,000 currency notes, printed Rs 2,000 currency notes. “Now, the government is complaining that the Rs 2,000 notes are being hoarded. We always knew that Rs 2,000 notes were printed only to help hoarders.”