Manmohan Singh to Urjit Patel's rescue amid MPs' flak

New Delhi: The RBI governor, Urjit Patel, was virtually cornered by members of the Parliamentary Standing Committee on Finance on Wednesday as he apparently “failed to give satisfactory reply” on how much old currency had been deposited in banks since demonetisation was announced on November 8.

As Mr Patel was being grilled by committee members, it was former Prime Minister Manmohan Singh who came to his rescue. Dr Singh, who was RBI governor himself, did not approve of the way committee members were speaking with Mr Patel.

“You all should not speak to him like that,” Dr Singh reportedly told the members, adding that the RBI as an institution and the governor’s position should be respected.

Dr Singh, who made a forceful speech against demonetisation in Rajya Sabha, calling it a “monumental failure and organised loot”, also told Mr Patel not to answer questions that may cause problem, an agency report said.

Mr Patel, flanked by deputy governors R. Gandhi and S.S. Mundra, reportedly also fumbled while giving an answer to the members as to when things would become normal, sources said.

On being asked who took the decision to demonetise Rs 500 and Rs 1,000 currency notes, the RBI governor is reportedly told the MPs that the “government forwarded the decision to me,” but added that the central bank was in agreement with the government on the objective behind demonetisation.
 
Economic affairs secretary Shaktikanta Das told the standing committee that the government had been planning for demonetisation since May 2016 and that meetings were being held every week, sources said.
 
Mr Patel told the committee that Rs 9.2 lakh crore or 60 per cent of the total demonetised currency has been replaced. The total value of the Rs 500 and Rs 1,000 notes in circulation till March 2016 was Rs 14.18 lakh crore.
 
The standing committee, headed by former Union minister and senior Congress leader M. Veerapa Moily, had called RBI and finance ministry officials to discuss the “demonetisation of Indian currency notes of Rs 500 and Rs 1,000 and the impact thereof”.

Members, including Congress MPs like Digvijaya Singh, wanted Mr Patel to be specific in his replies on lifting of cash withdrawal restrictions and wanted to follow through with tougher questions, but were prevented by Dr Singh and others, an agency report said.
 
“RBI officials were in a very defensive position on demonetisation,” said sources.
 
As members could not complete their questions, finance ministry officials will be called once again, most likely while Parliament is on a break during the Budget session.
 
But before that happens, Mr Patel will face tough questions from another set of MPs as he is scheduled to appear before Parliament’s Public Accounts Committee (PAC) headed by Congress leader K.V. Thomas on Friday. PAC meet is expected to be stormy as earlier Mr Thomas had threatened to even call Prime Minister Narendra Modi on the issue of demonetisation. However, later on due to opposition from BJP members, PAC issued a press release rejecting Congress leader’s contention.