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It's just the beginning, says PM Modi as BJP MPs endorse his 'crusade'

Hitting out at the rival parties, the BJP resolution asked them to decide whether they stand by the people of India or hoarders of black money.

, ET Bureau & Agencies|
Updated: Nov 23, 2016, 12.09 AM IST
PM Modi seeks views of people on demonetisation
NEW DELHI: Prime Minister Narendra Modi attacked the Opposition for questioning the wisdom of his decision to withdraw Rs 500 and Rs 1,000 notes and said the move was part of his crusade against black money, corruption and terror financing that would benefit the worst off in Indian society.

“This is not the end but only a beginning of our struggle,” Modi told Bharatiya Janata Party lawmakers on Tuesday, two weeks on from his November 8 announcement. “We have come to power not for us or those close to us but for the poor. For 70 years, the poor and the lower and middle classes suffered and have been exploited by black money, corruption and terrorism. Our aim is a deep, long and constant struggle against them.”

Parliament was stalled for a fourth day by Opposition protests demanding the prime minister’s presence in the House and Rs 10 lakh compensation for the kin of those who died, allegedly after having to stand in lines or being unable to pay for medical attention. “Prime Minister Narendra Modi can speak on TV, pop concerts, then why not in Parliament,” Congress Vice-President Rahul Gandhi asked.

Further protests are planned on Wednesday in the Capital, with opposition parties seemingly presenting a united front on the matter.

Modi sent a clear message to BJP MPs that the measure was only the beginning of his government’s fight against black money and more steps are likely to be announced in the coming days. The MPs said he broke down on more than one occasion during the speech, stopping to wipe away tears. He’d broken down in a similar manner during a speech on November 13 in defence of the note withdrawal.

Finance Minister Arun Jaitley lauded Modi for creating a “new normal” with the crackdown on black money.

FM Jaitley said the measure had been kept so secret that even he wasn’t aware, rejecting the accusation that top BJP officials and others had been tipped off about the change before it happened.

“Demonetisation has a direct relation with poor, with poverty and with poverty alleviation,” Jaitley said, adding the restrictions on cash withdrawals will be eased once the replacement of currency reaches a reasonable level.

In another anti-black money step, the government will start getting information about accounts held by Indians in Swiss banks from September 2019, it was announced on Tuesday.

The BJP lawmakers unanimously passed a resolution supporting the measure with a standing ovation, rallying around the PM who has been subjected to criticism for scrapping the notes. The lawmakers accused the Opposition of trying to disrupt Parliament and foment violence, Information and Broadcasting Minister M Venkaiah Naidu told reporters.

In the past two weeks, people have had to stand for hours in queues to change old notes for new or withdraw cash from their accounts at banks while automated teller machines have run out of currency.

Things have been getting better at the branches and more ATMs have been reprogrammed — 82,500 out of 202,000 — to dispense new Rs 500 and Rs 2,000 notes in urban areas. The government is now looking to focus on rural areas, Jaitley said.

Farm, consumer and other markets that conduct business in cash have seen a slump, expected to make a dent in India’s growth.

Jaitley said the benefits of the move outweighed any short-term misery as banks were flush with cheap deposits and the government would collect more by way of taxes, all of which could be used for the benefit of the poor.

“Today you see lakhs of crores of rupees which was in cash has come into banking system,” he said. “This is low-cost money. Now banks will have capacities to provide more loans for infrastructure development, agriculture and private sector... banks have also started reducing interest rates.”

About Rs 8 lakh crore will be raised from income tax and Rs 8.5 lakh crore from indirect taxes this year with another Rs 4-5 lakh crore needed, he said. That may not be needed when everyone starts paying the taxes they should thanks to the scrapping of high-value notes. The prime minister’s measure meant that all transactions would have to be fully legal, he said.

“What was normal from last 70 years that this much in cash and this much in cheque... but now prime minister has created a new normal,” Jaitley said. “Today, every honest citizen feels that a premium has been given for his honesty. In the long term, this landmark step will increase the size of official economy and reduce the shadow economy.”

Modi told lawmakers to expect more strong measures. “I would not guarantee that the process stops at demonetisation. There will be more steps in the coming days… On new year’s eve, I will give a new India. I had asked for 50 days for this scheme,” Modi said, adding the fight is one that is going to be “long, deep and constant”.

During his speech, Modi offered MPs some advice. He asked them not to use the term “surgical strike” for the move. “Let others do it if they want, but we should refrain from it. We should not compare it with the surgical strike that was carried out as in that our soldiers had put their lives in danger for the country and we should appreciate that,” an MP said, quoting the prime minister.

A resolution moved by Home Minister Rajnath Singh and seconded by M Venkaiah Naidu at the parliamentary party meeting hailed the demonetisation move as a “historic, daring and pro-poor” measure taken in the interest of the nation.

India and Switzerland signed a joint declaration on the automatic exchange of information (AEOI) between the two nations on Tuesday. “As a result, it will now be possible for India to receive from September 2019 onwards, the financial information of accounts held by Indian residents in Switzerland for 2018 and subsequent years, on an automatic basis,” the finance ministry said.

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