In a sudden and unprecedented move, Prime Minister Narendra Modi announced the demonetisation of high-value currency notes in November 2016, sending shockwaves through the nation. This overnight withdrawal of 80% of the currency in circulation, commonly referred to as notebandi, left the Indian economy reeling.

Just seven months later, the economy faced another jolt with the introduction of the Goods and Services Tax (GST). This new tax regime proved particularly disruptive for India’s micro, small, and medium-sized enterprises (MSMEs). These businesses, employing over 10 crore people and contributing 30% to the country’s GDP, struggled to cope with the sudden changes imposed by the GST.

Two years later, the Union government attempted to downplay the disastrous impacts of these policies on MSMEs in Parliament. An investigative piece by The Reporters’ Collective has revealed how the Reserve Bank of India (RBI) supported the government’s misleading claims before a parliamentary committee, even though their own published findings told a different story.

This investigation highlighted a rare moment of accountability when Parliament’s Committee on Government Assurances confronted the government for spreading false narratives.

In December 2018, a Rajya Sabha Member of Parliament sought answers from the Union Ministry of Finance regarding the impact of these moves on small and medium-sized businesses.

“Whether with two years in retrospect, recent reports indicate that micro and small business firms are still reeling under the impact of demonetisation with a rather bumpy start for the GST regime,” asked the former Congress MP from Meghalaya, Wansuk Syiem.

The Ministry’s response to all her queries was curt: “Information is being collected.”

An assurance made to Parliament must be fulfilled within three months, and this is one such promise. The Committee on Government Assurances oversees these commitments, tracking their progress and holding officials accountable. This watchdog committee regularly meets with ministry officials to gather updates and can request extensions or even the removal of certain assurances. Sometimes, the government contends that a minister’s statement did not qualify as an assurance to begin with.

In this instance, the Ministry of Finance failed to provide Parliament with data on the performance of MSMEs, defined as companies with annual revenues under Rs 50 crore. The ministry missed the three-month deadline, drawing sharp criticism from the Committee on Government Assurances. This incident marked only the beginning of the committee’s confrontations with the government over this issue.

Read the complete story here.