Indian Govt’s latest claim on demonetisation: Situation will normalise within 10-15 days

The Indian government seems clueless on by when the cash crunch situation, risen from demonetization, will ease. Recently, Finance Minister Arun Jaitley had said it will take at least one to two quarters for the demonetization effect to cool down.

"The effect of demonetisation will remain for one or two quarters, but its effect on the economy will be seen in the long term,” Arun Jaitley had said.

However, in the latest claim, the Centre said it will just take 10-15 days.

The Indian Government told the Supreme Court the inconvenience caused to public over cash crunch will be over within 10-15 days.

Post demonetization, people are facing acute cash crunch, lining up in never ending queues outside banks and ATMs. The government defended the crisis, telling Supreme Court that it is "not sitting around doing nothing" and also added that all the problems will be over in "10-15 days".

"The government is not sitting around doing nothing...In 10-16 days it will be all over," the Centre said.

Meanwhile, calculations done by Saumitra Chaudhuri, an economist who advised Manmohan Singh earlier, estimates that the replacement for the stock of now worthless bills will only be re-circulated by May 2017. The reason is due to the limited capacity of the printing presses in the country for such a sudden, huge job.

The government further said that there hasn’t been a single case of social unrest and blamed the political overtones in the arguments on petitions challenging Prime Minister Narendra Modi's decision to ban Rs. 500 and 1,000 notes, which formed 86 per cent of the cash in circulation.

The government further said that it would not be possible to have a stock of printed notes ready before the notes ban announcement as it would have defeated the purpose of secrecy.

The court is hearing a batch of petitions that allege that the demonetization drive has left people facing a huge cash crisis because of the scarcity of new notes.

Some of the petitioners have said that despite the government allowing withdrawals of Rs. 24,000 a week, banks often said they didn't have that much money.

Arguing for the petitioner, senior lawyer Prashant Bhushan said the government was not prepared to tackle the impact of its sudden decision.

"There was no cash in ATMs, recalibration was not done in time and cooperative banks were being discriminated against," he said.

The court asked the government why people couldn't be assured a minimum amount for withdrawal.

The government said the withdrawal limit was restricted to ensure that everyone gets new currency.