Demonetization should not hit legitimate holders of money: Chidambaram

New Delhi, Nov 9 (IANS) Supporting the government’s demonetization move to stamp out black money, former Finance Minister and senior Congress leader P. Chidambaram on Wednesday stressed that 99 per cent people are legitimate holders of money and the government must “quickly, efficiently” exchange their money without causing any harassment.

He also said if housewives, students and small traders are made to fill up RBI forms, then it’ll be pure harassment, and Congress party will condemn it. Chidambaram further said that the introduction of the Rs 2,000 note by demonetizing Rs 500 and Rs 1,000 note is a “puzzle”.

“How will this move help in preventing the generation of black money? If new income or wealth is unaccounted, will not that income or wealth be hidden in the Rs 2,000 notes? How is demonetization of high denomination notes served if a new and higher denomination note is introduced? Government must explain this apparent puzzle,” asked Chidambaram.

He also said many people have legitimate money in their hands, and it must be replaced effectively and without harassment.

“Replacement of old notes by new notes should be done quickly, efficiently and with the least inconvenience to the people, especially the poor, the middle class, the farmers, the daily-wage earner, the small traders and businesspersons, the students, the self-employed and the housewife.

“Everyone of them will have a few notes of high denomination. The government and the banks will be on test on how well they handle the implementation of the decision,” he added.

He also said the banks and the government owe a duty to legitimate holders of money to effectively exchange the money without harassment.

“If the RBI form is made mandatory for housewives, small traders and students, then it’ll be a pure and simple harassment. Congress will condemn it,” said Chidambaram.

Chidambaram also highlighted that the decision of the government must be seen in the background of “undisputed facts and data”.

“In 1978, the Janata government demonetized high denomination notes. That action failed to achieve its objectives. High denomination notes were re-introduced shortly afterwards and the volume of unaccounted wealth and income admittedly increased,” said Chidambaram.