Demonetisation pains ended 'in 60 days': Andhra CM Naidu

25 January 2017

Andhra Pradesh chief minister Chandrababu Naidu, who is heading a committee on boosting digital payments, has said he never did a flip-flop on demonetisation, but only put pressure on the Reserve Bank of India and bankers to ease the sufferings of the common man after the scrapping of Rs500 and Rs1,000 notes.

Naidu, who submitted a report on digital payments to Prime Minister Narendra Modi, told Business Standard in an interview that digital payments have to be cost-effective vis-a-vis cash to encourage people to use them.

''Immediately after demonetisation, the common man suffered and I wanted to reduce that suffering. I had expressed displeasure to the RBI and bankers for the way they were responding to the suffering. I was always inclined towards the (demonetisation) policy. The first statement supporting demonetisation was given by me. When I was in the opposition, I had raised the issue of demonetisation of high-value currency notes,'' he said.

He said the common man's demonetisation pains were ''over in 60 days'', adding that he was monitoring the situation daily and it was now normal in his state as well as across the country.

He said the demonetisation would help bring about reforms in political funding. ''Distributing currencies in these high-value notes was very easy during elections. Now, it is difficult in small denomination notes. It is difficult to distribute the money through mobile currency, as it is traceable. Once political corruption is reduced, corruption in other spheres would also be reduced,'' he said.

''Ours is a comprehensive report on digitalisation. For instance, your finger will act as a bank, it would be Aadhaar-based. A merchant having a smartphone needs only a biometric device that costs only Rs 2,000. The consumer need not have anything. He is to remember only his bank's name, Aadhaar number. He can go with Aadhaar authentication and do transactions,'' Naidu said.

He added, ''We are making a clear recommendation that digital currency should be cost effective than cash currency. If physical currency is cost effective than digital currency, nobody would shift to the latter. We have to create that environment to promote digital transactions.''

Asked if he would recommend tax on cash transactions to promote digital transactions, he said, ''If necessary, we have to levy some tax above a threshold ... let us see how the government responds.

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