Prime Minister Narendra Modi said demonetisation has helped reduce black money, increase tax compliance and given a boost to transparency on Sunday, the fourth anniversary of the contentious decision to withdraw high value currency notes, as BJP and Congress sparred over its outcome.

Congress leader Rahul Gandhi alleged that Modi’s move was aimed at helping a few of his “crony capitalist friends” and had “destroyed” the Indian economy, prompting a strong response from the BJP which said the exercise was an “attack” on corruption and black money that were rampant during the “lost decade” of the Congress-led UPA government.

Gandhi and the Congress have been alleging that demonetisation was not in the interest of the people and had adverse effects on the economy, a charge the government has dismissed repeatedly.

On November 8, 2016, Modi announced on national television his government’s decision to ban all currency notes of higher denomination of Rs 500 and Rs 1,000 from midnight.

Taking to Twitter, the Prime Minister listed the beneficial outcomes of demonetisation. “Demonetisation has helped reduce black money, increase tax compliance and formalisation and given a boost to transparency,” he said.

“These outcomes have been greatly beneficial towards national progress,” Modi said using the hashtag ‘DeMolishingCorruption’.

Along with his tweet, the Prime Minister also shared a graphic on how demonetisation has ensured better tax compliance, improved tax and GDP ratio, made India a lesser cash based economy and gave a boost to national security.

But in a video released as part of the Congress’ online ‘SpeakUpAgainstDeMoDisaster’ campaign, Gandhi said the question was how the economy of Bangladesh “surpassed” the Indian economy as there was a time when India used to be one of the most high performing economies of the world.

“The government says that the reason is Covid but if that is the reason, there is Covid in Bangladesh and elsewhere in the world also. The reason is not Covid, the reason is ‘Notebandi’ and GST,” Gandhi said in Hindi.

“Four years ago Prime Minister Narendra Modi began an assault on the Indian economy. He hurt farmers, labourers and small shopkeepers. Manmohan Singh ji said the economy will lose two per cent and that is what we saw,” the former Congress chief said.

“The Prime Minister had stated that it is a fight against black money, but it was not so,” he added.

“This was a lie. The attack was on you, Modi wanted to take your money and give it to his 2-3 crony capitalist friends. You stood in lines, not his crony capitalist friends. You put your money in banks and PM Modi gave that money to his friends and gave them a loan waiver of Rs 3,50,000 crore,” Gandhi alleged, but did not provide any evidence to support his claim on loan waiver.

Hitting back, the BJP said demonetisation was good for the country and resulted in cleaning up of the economy, formalisation of the informal sector and revenue aggregation.

“Demonetisation had dealt a body blow to the systemic financial corruption and black money economy. Since then, it has simultaneously invigorated formal economy and brought unprecedented financial benefits to all sections of society,” BJP national spokesperson Rajeev Chandrasekhar told a press conference at the party's headquarters in Delhi.

“If there is anybody who shouldn't talk about loot, mismanagement of the economy it should be people from the Congress. During the last decade of the Congress-led UPA government, there was rampant black money and corruption in the country's economy.”

The Congress-led United Progressive Alliance (UPA) was in power at the Centre for two terms from 2004 to 2014.

“Demonetisation had three significant and tangible impacts ‑ cleaning up of the economy, formalisation of the informal sector as it helped us to reach the poor and needy, and revenue aggregation,” Chandrasekhar said.

Congress leader P. Chidambaram said the BJP-led NDA government did great harm to India's economy on November 8, 2016. “The first lesson every ruler and every government must learn is ‑even if you do not do good to the people, do not do harm,” the former finance minister said.

Congress general secretary Ajay Maken alleged that the Modi government has continuously changed the explanatory reasons for carrying out demonetisation and it has “destroyed” the economy.

The Congress observed the fourth anniversary of demonetisation as “Vikshwasghaat Diwas (Betrayal Day)” and ran a social media campaign ‘SpeakUpAgainstDeMoDisaster’.

Maken quoted former Prime Minister Manmohan Singh’s remarks on November 24, 2016, to hit out at the government. “The way this scheme has been implemented - is a monumental management failure, and in fact, it is a case of organised loot, legalised plunder of the common people,” Maken quoted.

“Modi ji’s government continuously changed the explanatory reasons for carrying out demonetization,” Maken added.

The Congress leader said that at different points, these were to counter black money and corruption, to stem out fake or “counterfeit” currency, for a “digital or cashless” economy, to tackle Maoism, terrorism and separatism, to bring idle savings into banks, to expand and deepen the tax base, to arrive at a bigger, cleaner and real GDP and for faster economic growth, to bring down real estate prices and to partner with the GST.

Maken also made a point by point rebuttal of the various objectives cited for demonetisation.