How scrapping 500, 1000 notes and bringing in 2000 notes will check black money: Congress

Will the cost involved in demonetising the old currency and replacing them with new ones will be less than the black money checked in the process, asked Chidambaram.

The Congress today hit out at the Narendra Modi government for declaring Rs 500 and Rs 1000 notes illegal, questioning how it could check black money when new Rs 2000 notes have been introduced. The party also accused the government of harassing ordinary people by the sudden move.

Addressing a press conference in New Delhi today, former Finance Minister P Chidambaram wondered if the cost involved in the demonetisation of the old currency and replacing them with new ones will be less than the black money checked in the process.

"I don't understand why Rs 2000 notes have been introduced when Rs 500 and Rs 1000 have been demonetised," Chidambaram asked. He said a similar move by the Janata Party government in 1978 had failed.

Chidambaram said that though the Congress supported the decision on Tuesday, it will see if the objectives are achieved.

"The introduction of new series of notes is estimated to cost between Rs 15000-20000 crore, hence the economic gains of demonetisation should be at least equal to that amount," he said.

GOVT'S DEFINITION OF BLACK MONEY FLAWED: CHIDAMBARAM

Chidambaram said the definition of black money under this programme is flawed. "I don't encourage or support unaccounted wealth or income, but there's a non-monetised economy. You can't call it black money. The bulk of this money is legitimate money," he said.

The Congress leader said that the amount the Government mentioned was being used for financing terrorist activities was exaggerated.

Empirical evidence tells us that unaccounted wealth is largely stashed away in construction, jewellery etc. We don't know how much is in hard cash," he said.

The Congress leader reiterated his vice-president Rahul Gandhi's concern that ordinary people should not be harassed. "The government and banks owe a duty to people to exchange their money quickly... If the RBI form is mandatory for housewives, small traders and so on, then it will be a pure and simple harassment. The Congress will condemn it," Chidambaram said.

In remarks laced with sarcasm, Rahul today targeted Modi for declaring Rs 500 and Rs 1,000 currency notes invalid to check black money. "While the real culprits sit tight on their black money stashed away abroad or in bullion/ real estate. Well done Mr Modi," the Congress vice-president tweeted.