NEW DELHI -- Former Finance Minister P Chidambaram has warned the government's demonetisation drive will throw up serious privacy issues.
"Why should the government know if a couple is going to Goa for a holiday or for that matter medicines being bought by individuals," the former finance minister questioned.
Chidambaram raised these issues when talking to reporters in Delhi today. The former Finance Minister also demanded that Reserve Bank of India and Government should make public the discussions around demonetisation.
Relying solely on digital payments also carries serious issues of privacy and cost to the payer and the payee.P Chidambaram
He also expressed concerns on the government's pitch that even smaller transactions should be made cashless.
"We support encouraging high-value transactions to adopt the digital mode, but to insist that even low-value transactions should go cashless is an absurd and undesirable goal. There are serious issues of privacy and cost to the payer and the payee. These issues require serious debate," said Chidambaram.
"No economy is, or can be completely cashless," he emphasised.
Prime Minister Narendra Modi had removed ₹500 and ₹1,000 notes on 8 November, billing it as an attempt to root out corruption, end terror financing and move the country into the age of digital payments.
Chidambaram also reiterated that PM Modi's argument about scrapping ₹500 and ₹1,000 notes being related to fake currency being used for terrorism purposes did not hold water.
"Casualty and terror attacks in Jammu and Kashmir show that demonetisation hasn't worked there either. New Currency was found on terrorist who were killed in Bandipore," he said.
No economy is, or can be completely cashless.
"PM Modi had promised the nation that the problems faced due to demonetisation would come to end very soon, and had asked us to give him 50 days. When the PM addresses the nation tomorrow [31 December], the people will expect that he will make a categorical announcement that all restrictions on money have ended," Chidambaram said.
After PM Modi's announcement on 8 November, the RBI and the Ministry of Finance have issued over 60 different directives so far, about how much money can be withdrawn from bank accounts, and which documents are needed for depositing old cash. The mixed messages as well as the cash crunch have snowballed the overall confusion in the country.
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