Last few days of the past week have brought back the painful memories of demonetisation as several ATMs across the nation are running dry or non-functional and public end up hopping from one ATM to another.
While severe cash crunch has been reported in states like Maharashtra, Andhra Pradesh, Rajasthan, Uttar Pradesh, Madhya Pradesh, Telangana and poll-bound Karnataka, Union Finance Minister Arun Jaitley blamed the “temporary shortage” of cash on the “sudden and unusual increase” in withdrawals in some areas.
Currency notes in circulation are now at Rs 18.04 trillion. The cash in circulation-to-GDP ratio before demonetisation stood at 11.6 per cent and it has declined to 10.7 per cent at present.
Jaitley took to Twitter on Monday and said, “Have reviewed the currency situation in the country. Overall there is more than adequate currency in circulation and also available with the banks. The temporary shortage caused by ‘sudden and unusual increase’ in some areas is being tackled quickly.” The Minister of State for Finance also indicated that some states are having low currency reserves and the Reserve Bank of India (RBI) formed a committee to keep head above the crisis on Tuesday.
Going by the words of Jaitley, if the banks have ‘adequate’ money to circulate, what exactly he meant by ‘sudden unusual increase’? What made states to go short in currency again when the cash flow after the struggling months post note ban was back to a balance? The citizens across the nation have expressed their grief by casting doubt on the government for channelling whooping funds to the looming heavyweight Karnataka Assembly election, causing the major vacuum of currency.
Congress spokesperson Ratnakar Mahajan said, “Government will never disclose the reasons behind this cash crunch because the RBI and the Finance Ministry do not have any coordination and after demonetisation, the RBI has dropped down its qualitative administration. The banking regulator now lacks a proper system to maintain required cash flow. Lack of proper financial policies is also a reason. On one hand, the government is promoting cashless economy, but they don’t have any proper understanding of finance visionary.”
Cash-for-Votes is not an oddball for Indian and especially South Indian elections. The illegal practice of using cash, liquor, freebies like utility items to influence the voters during polls have made the banks cashless many times heretofore. The most recent instance is the rescission of Tamil Nadu’s R.K. Nagar by-polls by the Election Commission on allegations of bribing voters. Blame game over bribe to buy the loyalty of leaders also rocked the headlines ahead of Gujarat elections 2017. And now, the cashless ATMs are pointing figures at the battleground in Karnataka where major political parties like Indian National Congress, Janata Dal (Secular) and Bharatiya Janata Party are not keeping any campaigning card unturned.
When AV spoke to RBI’s Chief General Manager Department of Communication Alpana Killawala, she denied commenting anything on this issue and asked citizens to wait for an official statement from the RBI about the actual reasons behind this cash crunch.
The mismanagement and poor planning of the central government have also become quite evident. Banks being unable to maintain the cash flow, recalibration of ATMs to support the new currency notes, lack of coordination between the RBI and central government and logistical issues are to be blamed for the suffering of the common men in days prior to Akshaya Tritiya celebrations.
On the condition of anonymity, a Bandra resident stated, “The cashless ATMs have made people suffer again and shopping will also see a shortfall on the occasion of Akshaya Tritiya celebrations. The government should properly maintain cash inflow to avoid the hardship of common men.”
Congress President Rahul Gandhi blamed Prime Minister Narendra Modi for “destroying” the banking system. “Modi Ji has destroyed the banking system. Nirav Modi fled with Rs 30,000 crore and PM didn’t utter a word. We were forced to stand in queues as he snatched Rs 500-1000 notes from our pockets and put in Nirav Modi’s pocket,” he commented.
State Finance Minister and senior BJP leader Sudhir Mungantiwar expressed, “The cash crunch has not affected Maharashtra yet. I will gather more information about the current cash flow in the state. I don’t think Karnataka elections play any role in this.”