Opposition cashes in on India's cash shortage

But there is no one strong enough to lead charge against PM Modi

As Prime Minister Narendra Modi's government struggles to bring back normalcy following last month's ban on high-value banknotes, the unpopular move has rallied opposition parties for the first time in over two years.

While the unity remains tenuous, nearly a dozen parties, including Congress, slammed the government for scrapping 1,000-rupee and 500-rupee notes in a bid to curb the country's black-money economy, estimated to be as big as if not bigger than the Indian economy.

They have stalled proceedings in Parliament and organised protests over the acute cash shortage caused by the withdrawal of 86 per cent of the notes, which has seen long queues outside banks in a country where most transactions are by cash.

Yesterday, the political battle shifted to Uttar Pradesh - due to hold legislative assembly polls next year - where both Mr Modi and Congress vice-president Rahul Gandhi held rallies. 

"Only 6 per cent of black money is in cash. Narendra Modi knows that most black money is in land, real estate, gold and foreign accounts," said Mr Gandhi. 

"The lives of the poor have been ruined. You can't force a cashless economy (on the poor people)," he added.

  • New deposit rules in rupee revamp

  • NEW DELHI • India's central bank has imposed fresh restrictions on deposits of banned currency notes into bank accounts, days before the Dec 30 deadline to swop old rupee bills for new ones.

    Prime Minister Narendra Modi unleashed chaos last month with his shock move to withdraw high-denomination 500-rupee (S$10.70) and 1,000-rupee notes from circulation, in an effort to tackle widespread corruption and tax evasion.

    Yesterday, the Reserve Bank of India said people would now be allowed to make only a single deposit of more than 5,000 rupees before Dec 30, and would be required to explain why they had not deposited the money earlier.

    Mr Modi said at a political rally that people who thought they could simply deposit their unaccounted (black) money in the banks "underestimated the government" and "are trapped".

India's two main national parties are Mr Modi's Bharatiya Janata Party and Congress.

There are also the Left parties and a host of regional parties.

When Mr Modi came to power in 2014 on the back of a landslide victory, he decimated the opposition

The under-fire Prime Minister yesterday accused his political opponents of siding with the dishonest and corrupt instead of supporting demonetisation.

"The government is fighting corruption while the opposition is uniting to save the dishonest.

"For the first time, I see people raising slogans in Parliament to save the corrupt," he said. 

"We (the government) are doing all we can to make a better India."

Analysts said the current situation presented opposition parties with a real opportunity to come out stronger.

"The opposition unity has attracted a lot of traction because of demonetisation, which is one of the biggest gambles of the present government. They see this as an opportune moment to embarrass the government and leadership," said Dr Sandeep Shastri, pro vice-chancellor of Jain University in Bangalore.

"The government has been saying the problem will ease after Jan 1. If it does, the opposition will have to scramble to find an issue.

"If it doesn't, they have a golden opportunity," he added.

Yet, the biggest challenge for the opposition is the absence of a leader who could lead the charge, according to analysts.

 Though Mr Gandhi has tried to step up to the plate, his political record remains inconsistent.

Last week, he accused Mr Modi of "personal corruption", and though he said he had information to prove it, he has yet to produce any evidence.

"He (Gandhi) is not able to present himself as someone with leadership abilities," noted  Dr Bhaskara Rao, director of the Centre For Media Studies.

"His own party is dilly-dallying over making him party president. Other opposition leaders too are not fully rallying behind him. Right now, the problem with the opposition is the lack of a leader acceptable to all the parties," he noted.

A version of this article appeared in the print edition of The Straits Times on December 20, 2016, with the headline 'Opposition cashes in on India's cash shortage'. Print Edition | Subscribe