Cong picks holes in demonetization, says `2K notes a puzzle

Congress on Wednesday sought to pick holes in the Modi government demonetizing Rs 500 and Rs 1000 currency notes, saying if the idea was to address the issue of black money why has it decided to introduce Rs 2000 denomination notes, and terming the action as a “puzzle”.

The main opposition party said if the common man faced problems in exchanging the demonetized notes, it would amount to “pure and simple harrassment”. Former Finance Minister P Chidambaram told reporters that a similar move was also contemplated by the previous UPA government but the idea was dropped as “the economic gains were not too great”.

“Introduction of Rs 2000 note is a puzzle. How will this help in preventing generation of black money? If new income or wealth is unaccounted, will it not be hidden in Rs 2000 notes. How the purpose of demonestization of high denomination notes is served if a new and higher denomination note is introduced? Government must explain this apparent puzzle,” he said.

Chidambaram, a former Finance Minister, said Congress supported any move to check black money, but warned that the demonetization exercise may cause initial contraction and disruption of economic activity. The real test, he said, would be how quickly the old notes are replaced.

Chidambaram said while he supports the government’s action taken to stamp out black money, “but the method adopted raises many questions”.

“We support the objective of government to stamp out black money. But the method they have adopted raises questions...The move has come as a bolt from the blue for the common man,” he said.