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Chidambaram: 'No one will forget or forgive what note ban has done to them'

Former Congress Union minister P Chidambaram today sharply criticised Modi government for the demonetisation decision saying fefore banning high-value notes, Prime Minister Narendra Modi should at least have consulted his "own man" Yashwant Sinha so the "monumental mismanagement" could have been avoided.

He also called the note ban "a big scam" that has "dented confidence" in the economy, that will "impact growth negatively" and that most of all has affected the poor and only the poor.

"The government should have consulted at least Yashwant Sinha, he is their own man, They could have consulted even Mr Manmohan Singh", said Chidambaram while speaking at a press briefing in Nagpur.

Yashwant Sinha is a former BJP finance minister.

"There are over a 100 officers involved in budget making, till today it's never (been) leaked. What secrecy is this? Nobody was consulted. Are you suggesting that the former PM (Manmohan Singh) if consulted by the present PM, will betray a secret?" the Congress leader asked.

PM Modi, in a surprise announcement, on the night of November 8 scrapped Rs 500 and Rs 1,000 notes as of that moment. He also said the move was intended to hit black money and cut off funding sources from terrorists. Two weeks into the note ban, the government began saying the move is intended to kick start a digital and cashless India.

"This is an absurd move by the government. The goal post is shifting, it is no longer about black money now they have found a new one called cashless economy," Chidambaram said.

He also said that not only will none of the PM's stated demonetisation goals be met, demonetisation isn't even the correct route to achieve them.

"Has this stopped corruption, black money? The objective is not being served by this. Only poor people are being punished. This (demonetisation) is not the way to stop black money, corruption and terrorism. The objective is not being served by this," he said.

What is being and will be impacted, Chidambaram said, is the country's Gross Domestic Product (GDP), that is, growth.

"Long term impact that it will be negative for GDP. Even the RBI's low projection shows it. Most economists say there will be a negative 1-2% impact."

Talking about the implementation of the demonetisation scheme, he said, "Why are District Cooperative Central Banks kept out of this whole exercise. That is (tantamount to) punishing farmers. There is no money for them to buy supplies...there is no money to buy seeds, to hire labour or buy fertilisers. And there are also the 5 crore people are dependent on daily wages. Who is going to compensate them?"

"I believe people will not forget what is being done to them and will certainly not forgive the government for it. Just because people are not protesting in the manner that you are suggesting, it doesn't mean that they are condoning what the government is doing," Chidambaram concluded.