After former Chief Economic Advisor Arvind Subramanian slammed demonetisation as a “draconian shock,” former Chief Election Commissioner OP Rawat has said note-ban had little impact on the use of black money in elections.
Two days after his retirement, Rawat said demonetisation didn’t reduce the use of black money in elections, and in fact in some States more seizures were reported compared to previous years.
“After demonetisation it was thought that misuse of money during the election will be brought down. But it couldn’t be proved on basis of the data of the seizures. Compared to previous elections, there were more seizures in the same States,” he told a news agency.
The ex-CEC also said political class and their financiers seem to have no dearth of money. “Money used in this manner is generally black money. As far as black money used in the election is concerned, there was no check on it,” Rawat said.
Reacting to Rawat’s statement, senior Congress leader Abhishek Manu Singhvi tweeted, “One more slap on the face of Modi Sarkar on demonetisation”. “Outgoing Chief Election Commissioner OP Rawat just now gave a breaking statement. He has said, ‘Demonetisation had no impact on black money, a record amount of money was seized during the polls,’” he tweeted.
On November 8, 2016, the Centre had declared Rs 500 and Rs 1,000 notes as non-legal tender and introduced new Rs 500 and Rs 2,000 notes. Since then, various Opposition parties have been highly critical of the Centre’s move.
In September this year, Rawat had said the prevailing law is inadequate to tackle the menace of black money in elections. He had stated that the current laws were not of much help for them to ensure a complete check of his abuse and that is why “State funding” of polls was not possible in India at present.”
Rawat’s reaction came days after former Chief Economic Advisor Arvind Subramanian said note bandi was a massive, draconian, monetary shock that accelerated economic slide to 6.8 per cent in seven quarters after it against the 8 per cent recorded prior to the notes ban.
This was the first time the economist has openly spoken about the move. Before this, he never openly supported the exercise.
In his memoir, titled “Of Counsel: The Challenges of the Modi-Jaitley Economy”, he has signalled that he was sceptical of the decision. In his book, the former CEA has also hinted that he was not consulted before taking the decision.
Nearly all the demonetised notes came back to Reserve Bank of India according to RBI’s annual report for 2017-18. Union Agriculture Ministry had recently told the Parliamentary Standing Committee on Finance that there was no impact on demonetisation on farmers and agriculture sector.