Rajat Sharma

Connecting cash crunch with Nirav Modi is nothing but a ‘jumla’

aka (002)On Tuesday, as reports about cash crunch at ATMs in some parts of the country came in, Congress President Rahul Gandhi in an acerbic remark said: “Modiji has destroyed the banking system. Nirav Modi fled with Rs 30,000 crore. We were forced to stand in queues as he snatched Rs 500, Rs 1000 notes from our pockets and put them in Nirav Modi’s pocket”.

Connecting the cash crunch issue with Nirav Modi’s fraud with PNB, is nothing but a political ‘jumla’ (empty remark) by Rahul Gandhi. By no stretch of imagination can both the issues be connected. As far as the cash crunch is concerned, it first trended on social media, the rumour mills then went on overdrive, and in many places in UP and Bihar, people stood outside ATMs to withdraw cash.

The rumours spread so fast that even Madhya Pradesh chief minister Shivraj Singh Chouhan had to react. He alleged that there was a conspiracy at work which was aimed at creating cash crunch in the market by hoarding Rs 2000 currency notes. On Tuesday, Rahul Gandhi’s remark added fuel to the fire.

The facts are: Rs 15.22 lakh crore currency notes were withdrawn during demonetization, and presently there are Rs 18 lakh crore currency notes in circulation. The Reserve Bank of India has Rs 2.5 lakh crore currency notes in reserve, and daily Rs 500 crore currency notes are being printed. It would therefore be incorrect to say that RBI is facing a cash crunch. Overall, there has been cash crunch in some states due to mismanagement in logistics, and it is hoped that it would be brought under control in a day or two.

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