Kya Hua Tera Vaada? Modi’s Broken Promises on Demonetisation

Five times Prime Minister Modi could not keep his promise to the people of India on demonetisation.

(Photo: The Quint)

In the last 50 days of demonetisation, the Modi government has introduced, scrapped, or altered more than 60 rules. For example, at first we were allowed to exchange old notes up to a certain limit. That limit was then reduced, and finally scrapped. The same applies to the constantly changing limit on cash withdrawals. Understandably, it’s left many feeling confused and insecure about how to access their own hard-earned money.

Here are five promises made by Prime Minister Modi that came to naught.

1. The Narrative

In a surprise address to the Nation on 8 November, Prime Minister Modi announced that Rs 500 and Rs 1,000 notes would no longer be considered legal tender. But as the queues – and anger – grew outside the banks, the government made a virtue of the cash crunch. Calling it a painful but necessary exercise, the Prime Minister told us that demonetisation was needed to make India cashless or digital. Over the last 50 days, the narrative has completely changed from combating corruption to creating a cashless economy.

2. Deposits

On 8 November, Prime Minister Modi invited all Indians who’d stashed their savings in cash to deposit them in bank accounts. Four days later, Finance Minister Arun Jaitley told people not to rush to the banks since they had time till 30 December to deposit their cash.

But a little more than a month later, the government shocked all those who hadn’t yet deposited all their cash when it tried to impose a limit on the amount of money and the number of deposits one could make.

According to this absurd notification, anyone who wanted to make a second trip to the bank to deposit more than Rs 5,000 could not do so without being interrogated by two bank officers. The ensuing public outrage, however, forced the government to retract the notification.

3. The 50-Day Challenge

Prime Minister Modi had set a 50-day deadline to ease the country’s cash crunch. During an emotional speech at a foundation stone laying ceremony of Mopa greenfield airport in Panaji, he said – “I will accept any punishment if there’s any shortage after 30 December”.

But come 2017, the new Rs 500 note remains scarce, withdrawal limits have not been removed, we still see “Out of Cash” notices outside banks, and there still are several ATMs that need to be recalibrated. The lines outside banks may be shorter, but we’re still a long way from normalcy.

4. The Jan Dhan Dhoka

Even as the government was investigating the sudden spurt of money into Jan Dhan accounts, Prime Minister Modi, while addressing a rally in Moradabad, UP said, “If you have deposited someone else’s unaccounted money in your account, don’t withdraw it. I will find a way for you to keep that money.”

But on 24 November, the government cautioned Jan Dhan account holders that they will be prosecuted under the I-T Act for allowing misuse of their bank accounts.

5. Pro-Poor Pitch

The Modi government has constantly reminded us that demonetising Rs 500 and Rs 1,000 notes was a pro-poor step meant to punish the rich who had undeclared wealth.

But its the cash-dependent rural economy and the urban poor who’ve been hit the hardest. Daily wage labourers lost work, small shop-keepers and traders lost business, and small farmers were left with no cash to buy seeds.

The last 50 days have been painful to say the least. We can only hope that the next 50 days bring some stability.