Amid rising anger among people across India over exchanging the scrapped currency, Finance Minister Arun Jaitley on Saturday regretted hardships caused due to withdrawal of high denomination notes but advised the public to be patient as the move will have larger benefits for the economy in long term.
He said it may take up to 3 weeks for all the 2 lakh cash vending ATMs to operate normally as each one has to be calibrated individually to dispense new sized notes of Rs 2000 and Rs 500 besides lower denomination currency of Rs 100.
Assuring that RBI and banks have stacked up enough currency to replace the Rs 14 lakh crore worth of Rs 1000/500 notes that have been declared invalid, he said the government is constantly monitoring the situation as it is a "massive operation".
As banks have been asked to remain open this weekend to cope with the rush, the Finance Ministry held a video-conference call with top RBI officials to assess the emerging situation and coordinate currency distribution across the country.
At a hurriedly called press conference, Jaitley urged people not to flock the banks to exchange the now-defunct banknotes, asking them to stagger it over the 50-day window provided by the government for the purpose.
The briefing, second in three days, was called after anger and chaos over never-ending queues were witnessed at banks that struggled to exchange old notes and give out newer Rs 2000 notes and smaller denomination currency.
Hardly 40 per cent of the ATMs were operating in the country and they too ran out of cash within hours. The new Rs 500 note was available only in Delhi and Mumbai and RBI has already started releasing soiled Rs 100 notes to cope with the demand.
"ATMs could not have been calibrated (before the announcement) because of secrecy issue. Thousands of people are involved in recalibration exercise (and) secrecy could not have been maintained. Recalibration takes at least 2-3 weeks," he said.
Terming demonetisation as a massive operation, he said there will be inconvenience in the first few days "but the long term advantages of this are to the overall economy".
"It is a regret that people are being inconvenienced. Because a replacement of this magnitude will cause inconvenience as you have to go to the bank, you have to stand in a queue," he said.
In the short run, he said, some "obvious" disruption will be caused in the short term.
"But once the money is available both in the system and more so in the banking system, the advantages of that to the economy and businesses will be far more. The capacity of the banks with all this additional capital to lend and support businesses is going to be far higher.
"And therefore medium term and long term advantages to the economy as against this temporary inconvenience or disruption, are far too many," he said.
FM rejects criticism of political parties on demonetisation
Finance Minister Arun Jaitley on Saturday rejected as "irresponsible" the criticism of political parties on the government's demonetisation drive, saying some people are having problem with the cleaning up of the system.
Jaitley also said that spurt in bank deposits in the July-September quarter, which Delhi Chief Minister Arvind Kejriwal attributed to selective leak of the drive to BJP friends, was on account of payment of 7th Pay Commission arrears to government employees.
"Different kinds of political reactions keep coming and some of them are even irresponsible. Some people have a problem with this attempt of cleaning up the political system," he told reporters here.
Dismissing the suggestions that one week should have been given to people to adjust, he said this would have amounted to leaving everyone to go scot-free and "this gives the whole game away (of cleaning the system)".
Kejriwal has dubbed the demonetisation of Rs 500 and Rs 1,000 currency notes a "huge scam" and alleged BJP had told all its "friends" about the move much before Prime Minister Narendra Modi's announcement.
He termed the Centre's decision as a "surgical strike" on common man's "small savings" and not on "black marketeers" and demanded its immediate roll back.
Congress spokesperson Kapil Sibal has described the demonetisation as another "jumla" (gimmick) for political reasons and suggested that BJP should make public all its expenses in upcoming polls in UP, Punjab and other states if it was serious about eliminating black money and corruption.
On Congress party's assertion that why should people stand in queue to get their own money back from banks, Jaitley said it is the right of the government to know whether the money has been legitimately earned.
"Whether you have paid tax on your money, people of the country and government have the right to know. Even on your own money, you have to pay tax and that is what we are trying to ensure. And this money has come through legitimate means or not, that also the country has a right to know," the Finance Minister said.