Congress alleges Rs 2000 note ban 'royal welcome' to keepers of black money, demands white paper

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The Congress on Tuesday accused the government of facilitating those hoarding black money with the move to withdraw Rs 2000 currency notes and demanded a white paper on what it alleged was the "greatest organised loot" in independent India.

Congress spokesperson Gaurav Vallabh claimed the unorganised sector will be under stress once again after a gap of 6.5 years and six crore MSMEs and 11 crore farmers will have to "stand in line" for exchanging a few Rs 2000 notes after the sudden announcement.

He said as on March 31, 2023, there were a total of 181 crore Rs 2000 currency notes in circulation totaling Rs 3.62 lakh crore.

"The majority of this Rs 3.62 lakh crore is with the keepers of black money. Now to exchange Rs 2000 notes, no identity, forms, or proof will be required by banks. So, a royal welcome is being given to keepers of black money to exchange their Rs 2000 denomination notes by the Modi government," Vallabh alleged.

The decision will impact the economy which had just started showing signs of minor recovery after the pandemic as small businesses and traders will be affected due to this note ban, the opposition party alleged.

"We want to ask the government that on the 8th anniversary of note-ban, who were the people who had suggested the introduction of Rs 2000 notes in the first place and why these notes were brought," he said.

"We demand a white paper on why Rs 2000 notes were introduced and who all were saying that all black money will finish. Why was the decision to take back 2000 notes taken? We demand a composite white paper on this biggest loot in independent India," he said.

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The Congress leader claimed bank credit growth will have an adverse impact as people will stand in long queues in banks to exchange their notes.

Assuming that a person will come for the exchange of five Rs 2000 notes, banks have to perform around 36 crore transactions in the next four months. If a transaction takes about four minutes to complete, it will take 144 crore minutes (2.4 crore hours) of banking hours just to exchange Rs 2000 notes in the next four months, he said.

"This will harm the growth in credit as many bank branches will be busy in this exchange only in the next 4 months. Resulting in slow or no new job creation in the economy," he claimed.

Vallabh also said the discretionary consumer demand will also fall when people will be busy exchanging Rs 2000 notes and especially for products like entertainment, high-end apparel, luxury cars, etc. resulting in a low GST collection from these economic activities at least in the next four months.

"That will hurt social sector spending by the government," he said.

He claimed that there will be a fall in the credibility of the currency, as it will be affected due to such "mini-demonetisation".

"In the long term, it affects the credibility and acceptability of our currency.

"Ordinary citizens will be impacted indirectly via rising unemployment and loss of income. They continue to be impacted by day-to-day corruption," the Congress leader said.

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