Modi comes clean on note ban and Urjit Patel’s exit

indica News Bureau –

 

Note ban was not a sudden decision and former RBI governor Urjit Patel had himself requested to quit, Indian Prime Minister Narendra Modi said in his first interview of the year ahead of the 2019 general election.

“It was not a sudden decision. Note ban was necessary to clean the system. It wasn’t a ‘jhatka’. We had warned people a year before, that if you have such wealth (black money), you can deposit it, pay penalties and you will be helped out. However, they thought Modi too would behave like others so very few came forward voluntarily,” Modi told Asian News International in an exhaustive interview.

The PM said demonetization was needed to bring money into the mainstream and that following the note ban, more people are paying taxes.

“There was a parallel economy running before notes ban, which had drained the country from the inside… The currency which used to be kept in sacks has returned to the banking system,” he said.

In a surprise announcement on November 8, 2016, the Prime Minister banned Rs 500 and Rs 1,000 notes overnight, leaving 80 percent of the cash in circulation worthless. The move was aimed at curbing black money and bringing back money into the banking system.

Modi government’s note ban move has been repeatedly attacked by the opposition, with the Congress saying India had to pay a “huge price” for demonetization.

On former RBI Governor Urjit Patel’s sudden exit, Modi said the central bank head had personally written to him about wanting to resign, citing personal reasons, several months before stepping down from the office in December.

“He himself requested (to resign) on personal reasons. I am revealing for the first time, he was telling me about it for past 6-7 months before his resignation. He gave it even in writing. No question of political pressure,” Modi clarified.

Patel resigned as RBI governor after a months-long tussle over policy with the government over the central bank’s independence.

“He did a good job as RBI Governor,” Modi said acknowledging Patel’s work.

Sources said Patel took the step as Modi government for long had been trying to pressure the RBI to ease its lending norms and other policies.

Congress chief Rahul Gandhi said that Patel had resigned to “protect the institution of RBI” from PM Modi’s government.

Modi stressed that institutions like these are paramount to his government and that the Congress party has no right to point finger by saying that the government weakened such institutions in the country.

Modi cleared the air on several other issues including the Ram temple, Goods and Services Tax and economic offenders like Nirav Modi, Vijay Mallya and Mehul Choksi.

On Pakistan, he said the government was trying all means to keep up the pressure on the neighbor, but it would be wrong to expect that Islamabad will “mend its ways” anytime soon.

“Ek ladai se Pakistan sudhar jayega, yeh sochna bohot badi ghalti hogi. Pakistan ko sudharne mein abhi aur samay lagega. (To think that Pakistan will start behaving would be wrong. It will take more time for Pakistan to be corrected), Modi said.

The comments came shortly after Pakistan’s Border Action Team sneaked into Jammu and Kashmir and was flushed out by the Indian Army

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