Industry bodies like FICCI and ASSOCHAM will also be called to brief the panel on the impact of digital money push on trade and commerce.
A day after the political slugfest between the NDA and Opposition parties on the first anniversary of demonetization, a Parliamentary panel on Thursday saw a similar political divide as members grilled senior officials of the Finance Ministry.
The Parliament Standing Committee on Finance headed by Congress leader M Veerappa Moily, which could not adopt its draft report in August last year due to opposition by members mainly from the BJP over certain passages, has now decided to widen its ambit and go into sector-wise impact of demonetization.
Economic Affairs Secretary Subhash Chandra Garg, Banking Secretary Rajiv Kumar and CBDT Chairman Sushil Chandra, who appeared before the panel, were repeatedly asked by members belonging to the Opposition parties as whether there was no other way available to achieve the objectives stated by the government behind the demonetization decision.
Finance Secretary Hasmukh Adhia could not appear due to his engagements in the two-day GST Council meeting that began in Guwahati on Thursday. Sources say that the panel will now call senior officials of the Telecom Ministry on November 16 to ask about the status of Internet reach of people in India to adopt digital payments. Industry bodies like FICCI and ASSOCHAM will also be called to brief the panel on the impact of digital money push on trade and commerce.
In view of reports of demonetization having impacted the sale of agricultural produce and thereby hitting farmers, the panel has also decided to call representatives of various state governments before it. Representatives of Micro Small and Medium Enterprises will be called to assess the impact of demonetization on employment.
"The Committee is in no hurry to submit its report. RBI has given new details. The panel will now call before it representatives of respective sectors. It will examine the impact of the decision on economic growth, production, employment and agriculture, besides the limited issue of decision to demonetise the old currency notes of Rs 500 and Rs 1000 and the subsequent digitisation drive," a source in the panel said.
This means that the committee is unlikely to submit its report before the conclusion of the Gujarat polls in which Opposition parties have sought to make demonetization a major issue.
The representatives from the government claimed that demonetization has led to reduction in cash circulation in economy and increase in savings. They also argued that the money that has flowed into banks after demonetization has increased liquidity and will give a boost to investment in infrastructure as banks have lowered lending rates.
Members from Opposition parties in the panel, however, argued that none of the objectives of demonetization, which included checking black money and counterfeit currency, curbing terror funding and promoting digitalisation of payments, could be achieved.
They also said that that 'Brand India' has suffered and the country, which was on way to becoming the world's fastest-growing major economy, has lost out hugely to China due the impact of demonetization on economic activities.
Opposition members said that China's export grew at the expense of India's, sources said.
Opposition members also referred to the slowing of the GDP growth in the first quarter of the fiscal year to a three-year low of 5.7 per cent to buttress their argument.
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