Kejriwal demands rollback of demonetisation

Delhi Chief Minister Arvind Kejriwal on Saturday demanded rollback of the government's decision to demonetise Rs 500 and Rs 1,000 currency notes, saying that the economy will collapse in the coming days if the decision was not withdrawn.

Kejriwal said that demonetisation will not bring black money into the banking system but will only result in it changing hands and alleged that those close to the Bhartiya Janata Party (BJP) were already aware of the government's move and took care of their black money before the announcement.

"One can see it from the fact that many banks which had shrinking deposits from many months suddenly saw growth of two to three percent in July to September quarter. This growth means many thousand crore rupees jump in deposits. Whose money was it," Kejriwal asked.

"It means that those who were close to the BJP were aware of the government's announcement in advance. They already took care of their black money. And it is the common people who are facing all the trouble (due to demonetisation)," he added.

Kejriwal added that the whole process will be futile and "not a single penny" of black money will enter the Indian economy.

"The black money will only change hands. For example, a person having Rs 10 crore worth of black money will not deposit in bank. Because he will be charged 30 per cent tax and 200 per cent penalty on that leaving him with only Rs 1 crore."

"Instead, he is buying foreign currency, gold etc. at double the price," Kejriwal explained.

He added that many brokers in the market have emerged who are getting old currency changed into new Rs 2000 notes.

"Now these brokers are changing the currency at a commission of 50 percent. So the gold trader will exchange his old notes. As a result, the person who had Rs 10 crore black money will be left with Rs 5 crore in his hands and the rest Rs 5 crore is divided between the broker and the person selling gold, foreign currency etc," Kejriwal explained.

He further alleged that an intentional crisis has been created so people run to the brokers to exchange money.

"They (the government) are threatening on TV that those depositing more than Rs 2.5 lakh won't be spared and will have to pay a heavy penalty. What they mean is don't deposit the money. Our brokers will come and exchange it with them," Kejriwal alleged.

Kejriwal said the government's move is a "surgical strike" on those who saved their life earnings and will have no effect on those who deal in thousands of crore worth of black money.

"We are questioning the intent of the decision, not just its implementation," Kejriwal said while demanding its rollback.