Govt bid to ensure win: Note ban data after Assembly polls

New Delhi: Apprehensive over any negative impact of its demonetisation move during the upcoming Uttar Pradesh Assembly elections, the Centre will come out with the final tally of actual deposits made in banks across the country only after March 31, a good three weeks after the poll results in the politically-crucial state would have been announced.

The idea behind the move is to ensure that during the runup to the Uttar Pradesh Assembly elections, any mention or discussion of the controversial topic should be kept to the barest minimum so that it does not prove counter productive to the BJP’s campaign in the state.  

According to highly-placed sources, after hectic consultations with the PMO, it was decided that the finance ministry will come out with the official figures regarding the quantum of old currency notes deposited with banks since the demonetisation was announced on November 8, 2016, after March 31, 2017.

The Reserve Bank of India (RBI) is currently involved in counting of the currency, which was deposited in banks till December 30, 2016 (which was the last date for depositing the defunct notes).

While the government has been all along claiming that the demonetisation move has been a success and has managed to nail a large quantum of black money, the general reaction among the common public, especially in rural India, is not so positive. With people involved in the small scale industries, as well as daily wagers, being rendered jobless owing to the note ban, and are returning to their native villages to seek work under MGNREGA, the Centre, vary of a negative backlash from the critical rural votebank, seems to have decided to push the announcement of actual deposits in banks.

The elections in Uttar Pradesh are to be held in seven phases with the first phase set to begin on February 11.

The final phase will be held on March 8, while the results will be declared on March 11.

The government had initially said that all of the total Rs 14 lakh crore worth of currency which had gone out of the system after the Rs 500 and Rs 1,000 denomination notes were declared illegal tender on November 8, 2016, will come back to the system. It had estimated that around 10 per cent of the total value of demonetised amount (roughly around Rs 3 lakh crore) will not return to the system, and that could be the much talked about “black money”.

However, it is now seems apprehensive of the fact that much more than the originally expected Rs 14 lakh crore of demonetised currency may have returned to banks across the country, which in other words means that a lot of “black money” could have been turned to white. Whereas out of the much awaited Rs 3 lakh crore, a very small amount could not return to the system, sources said.

This, sources aware of the development said, could also have been another reason why the Government seems to have postponed the announcement of official data of deposits in banks.

The RBI in its statement on November 28, 2016 had announced that banks had reported deposits as well as exchanges worth Rs 8,44,982 crore  between November 10 and the aforementioned date. Of these, exchanges amounted to Rs 33,948 crore and deposits amounted to Rs 8,11,033 crore.

Considering that more than half of the expected Rs 14 lakh crore had been deposited within three weeks of the demonetisation drive having been announced, Government’s concerns about overflow of funds seem genuine.