5 Reasons Why Urjit Patel May Not Face House Panels on Note Ban

RBI Governor Urjit Patel may choose not to appear before the parliamentary panel on note ban, writes Rajeev Sharma.

Reserve Bank of India (RBI) Governor Urjit Patel who has been summoned by two parliamentary panels on the issue of demonetisation – on 19 January by the Standing Committee on Finance and on 28 January by the Public Accounts Committee (PAC) – is likely to skip both the hearings.

Here are five reasons why Patel is unlikely to appear before the two parliamentary panels which are keen to inquire the Narendra Modi government’s 8 November decision to demonetise two high-value currency notes.

Also Read: Urjit Patel Should Speak Up on Demonetisation or Lose Credibility

1) May Not Have All the Answers

He may not have the answer to the million dollar question which he will surely be asked by the parliamentary panels, both headed by the Congress: What is the total quantum of cash deposits during the 50-day period between 9 November and 30 December?

Also Read: Post Demonetisation, Rs 13 Lakh Cr Back In Banking System: Report

2) Recounting the Deposits

The RBI, according to knowledgeable sources, has directed all the banks to recount their cash deposits to avoid possible double counting. The recount is a long and tedious process and is likely to take many more weeks or even a couple of months.

3) Post Offices’ Cash Deposits

It's unclear whether the RBI has got hold of correct estimates of the post office deposits and whether the media reports that 97 percent of the demonetised money (Rs 15.44 lakh crore) has already come back have included the post offices’ cash deposits.

Also Read: I-T Department to Verify Large Deposits Post-Demonetisation

4) Post Offices Yet to be Computerised

The cash deposits in post offices during the 50-day window actually poses a big challenge to the RBI. A large number of the country's 1.5 lakh post offices, 90 percent of which are in rural areas, are yet to be computerised. This undoubtedly increases the government’s headache of counting the cash deposits which may well run into lakhs of crores of rupees.

5) Answers May Not Please Modi Govt

Most importantly, even if one presumes that the RBI Governor has all the answers to all the obvious questions of the two parliamentary panels and is updated with all the figures, his answers may well be extremely damaging to the Modi government. Patel hasn't so far toed as fiercely an independent line vis a vis the government as his predecessor Raghuram Rajan. If the government wants him to keep mum, which obviously they would be expecting from him, he is unlikely to go contrary to the their wishes.

All these factors would be a compelling reason for Patel to seek another date for his deposition before the parliamentary panels. His deposition will inevitably be politically explosive and perhaps would have the same potential of political damage for the Modi government as the CAG reports had for the UPA, though the two subjects are vastly different.

Also Read: Did the PM Admit to the Nation That Demonetisation Has Failed?

Deposition Before a Parliamentary Panel

A significant thing about deposing before a parliamentary panel is that a parliamentary committee’s decision cannot be challenged before any court of law. The panel’s ruling is final and binding.

A witness cannot fudge figures or give untruthful statements because in that event, the witness is sure to be hauled over the coals. A parliamentary panel can pass strictures against a witness for non-cooperation or for misleading the panel or for giving wrong facts and figures.

In the worst case scenario, if a witness faces a parliamentary panel’s ire, then he or she can be referred to the privileges committee.

All the above possible scenarios are a big no-no for any witness and even more so for a government servant.

Also Read: PM Modi is Rattled by Demonetisation’s Resounding Failure

Hide-and-Seek With the Panel

In view of the above, it is highly unlikely that Urjit Patel may have anything concrete or substantial with him by 19 January or even 28 January to appear before the two parliamentary panels.

However, he will have to come up with a credible explanation for his inability to appear before the parliamentary panels anytime soon.

Patel had skipped his deposition before the Parliamentary Standing Committee on finance in New Delhi on 22 December on the issue of demonetisation.

Patel managed to wriggle out of it by expressing his inability to attend the meeting because of his prior engagements and assured the parliamentary panel that he will do the needful at its next meeting. The parliamentary standing committee on finance comprises 31 members, 21 from the Lok Sabha and ten from the Rajya Sabha, and is headed by Veerappa Moily of the Congress.

Having said this, once the election results of five state assemblies are announced on 11 March, it will be a big relief for the RBI Governor or any other government servant to appear as a witness before any parliamentary panel, irrespective of the results.

(Rajeev Sharma is an independent journalist and strategic affairs analyst who tweets @Kishkindha. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)

Also Read: Baffled Over Black Money? Ordinance on Old Notes Won’t Help Either