Former President Pranab Mukherjee has written in his memoir The Presidential Years that he was not consulted by Prime Minister Narendera Modi ahead of demonetisation in November 2016.
The Presidential Years is the fourth book authored by Mukherjee, who passed away on August 31, 2020, in New Delhi at the age of 84.
The late Congress veteran wrote, “PM Modi had not discussed the issue of demonetization with me prior to his announcement on 8 November 2016. I learnt of it along with the rest of the country when he made it known through a televised address to the nation.”
While the NDA faced criticism for the sudden announcement on demonetisation, Mukherjee wrote that the “suddenness and surprise” was absolutely necessary for such an announcement.
“There has been criticism that he should have taken lawmakers and the Opposition into confidence, before making the announcement. I am of the firm opinion that demonetization could not have been done with prior consultation because the suddenness and surprise, absolutely necessary for such announcements, would have been lost after such a process. Therefore, I was not surprised when he did not discuss the issue with me prior to making the public announcement. It also fitted in with his style of making dramatic announcements,” Mukherjee wrote in his book.
Mukherjee wrote that after the announcement, the prime minister had discussed the need for demonetisation with him and had outlined three main objectives of the “bold step” — tackling black money, fighting corruption and containing terror funding.
“He desired explicit support from me as a former finance minister of the country. I pointed out to him that while it was a bold step, it may lead to a temporary slowdown of the economy. We would have to be extra careful to alleviate the suffering of the poor in the medium to long term. Since the announcement was made in a sudden and dramatic manner, I asked the PM if he had ensured that adequate currency was there for exchange. I extended my support to him,” Mukherjee wrote.
The former president wrote that even he had sent a note on demonetisation to the PMO in the 70s after the successful implementation of the Voluntary Disclosure of Income and Wealth Ordinance, 1975, but it was not accepted by former prime minister Indira Gandhi.
While mentioning Indira Gandhi’s view on demonetisation, Mukherjee wrote, “She did not accept my suggestion, pointing out that a large part of the economy was not yet fully monetized and that a substantial part of it was in the informal sector. Under these circumstances, she argued, it would be imprudent to shake the faith of people in currency notes.”
Mukherjee said in his book that questioning the decision of demonetisation was ‘understandable’ because it shook the confidence of the people in the banking system.
“But perhaps one thing can be stated without fear of contradiction: that the multiple objectives of the decision of demonetization, as stated by the government, to bring back black money, paralyse the operation of the black economy and facilitate a cashless society, etc., have not been met,” Mukherjee wrote
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