Trinamul Congress Rajya Sabha MP Saket Gokhale alleged Monday that the Modi government’s demonetisation drive in 2016 was linked to the United States Agency for International Development (USAID).
In an X post, Gokhale said that the US agency partnered with Modi Govt to “drive cashless payments” in India in 2016.
The USAID initiative, to promote digital transactions, was launched in collaboration with the Union ministry of finance a month before Prime Minister Narendra Modi announced demonetisation in November, 2016.
Under demonetisation, the government withdrew entire currency notes of denomination of 1000 and 500 of value 15.44 lakh crore. This was about 86.5 per cent of India’s currency.
“BJP is claiming that USAID was an anti-India agency. In October 2016, USAID partnered with the Modi government to ‘drive cashless payments.’ A month later, Modi did the disaster called demonetisation to ‘promote cashless.’ Now, will BJP explain the mysterious ‘chronology’ behind this?” Gokhale posted on X.
According to a US embassy statement at the time, the USAID-backed initiative sought to “scale up digital payment systems in India” by selecting locations based on “smartphone penetration, the local economy, and administrative feasibility.”
The statement also described the effort as “the next phase of partnership” between USAID and the Indian government.
Earlier this week, billionaire-investor Elon Musk stirred a controversy over the electoral processes in India with the claim that a US government-funded project under the Biden administration had shovelled around ₹182 crore to boost voter turnout in India.
He said the department of government efficiency (DOGE) had cancelled several projects that received US taxpayer dollars to further some objective or the other.
Musk and US President Donald Trump has already shut down USAID for alleged wasteful expenditure.
Musk’s statement prompted BJP IT cell chief Amit Malviya to accuse the Congress-led United Progressive Alliance (UPA) of benefiting from external funding during its tenure.
“$486 million to the ‘Consortium for Elections and Political Process Strengthening,’ including $22 million for ‘inclusive and participatory political process’ in Moldova and $21 million for voter turnout in India. $21 million for voter turnout? This definitely is external interference in India’s electoral process. Who gains from this? Not the ruling party, for sure,” Malviya posted on X.
Congress spokesperson Pawan Khera dismissed Malviya’s claim and said, “In 2012, when the Election Commission of India (ECI) allegedly received this funding from USAID, the ruling party was Congress. So, by this logic, Congress was sabotaging its own electoral prospects while the BJP won in 2014 because of Soros/USAID?”
Former chief election commissioner (CEC) S.Y. Quraishi rejected that foreign funding played a role in boosting voter turnout in India.
In a post on X, Quraishi clarified that the ECI had signed a 2012 Memorandum of Understanding (MoU) with the International Foundation for Electoral Systems (IFES) for training purposes, but the agreement did not involve any financial commitments.
“There was an MoU with IFES in 2012, like we had with many other agencies, to facilitate training for desirous countries at ECI’s training and resource centre, IDEM, which was very new at that stage. There was no financing or even promise of finance involved,” Quraishi wrote.
He further stated that any reports suggesting monetary transactions were “entirely false and malicious.”
Now with Gokhale’s comments on USAID and demonetisation, the alleged US funding in India raise uncomfortable questions about the Modi government’s own engagements with international agencies.
