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Demonetisation of High Indian Currency Note – Was it really a masterstroke? – Part 5

Demonetisation! Aww! I am sure it must be painful for the present Indian government even to hear this word. It’s indeed equivalent to the “Achilles heel” for the Government of India (GOI). Many economists have raised their voice against this step taken “without complete preparedness”, and at the same time, some independent organisations, in the recent past, have also released their survey/research reports, “along with the statistical data”, stating that the demonetisation step taken by the GOI was not able to meet its desired objectives. But alas, in spite of all this, the politicians, under the influence of power, are not willing to accept this fact of failed attempt openly. Obviously, accepting a mistake takes a lot of guts which not everyone possesses.

As a conscious step, whenever someone comes up with valid figures indicating the failure of the demonetisation step, the politicians of the ruling government starts accusing them, and further, without any statistical backing, keep on boasting that demonetisation was a successful attempt towards curbing black money, terrorism, as well as, moving towards a cash-less economy, etcetera. But I am pretty sure, that deep down in their heart, they are well aware that they had made a blunder in opting for this step in a hurry-burry. However hard the leaders and their blind followers may try to cover up but the fact is not going to change even a bit.

Recently, the Reserve Bank of India (RBI) has published its annual report for the Financial Year 2015-16. In this report, it is clearly mentioned that an amount of Rs. 8,900/- crores i.e. almost 1.4% of the total old High Indian Currency Note of Rs. 1000/- that ceased to hold its status as a legal tender Post-Demonetisation step, were not been deposited with the RBI. Further, quite surprisingly, this report also states that the same details about the old High Indian Currency Note of Rs. 500/- were not available/clear because of the reason that both the old and the new currency note of Rs. 500/- were into circulation. Although, this reason is straight away rejected by my digestive system, but anyway, since it’s the same RBI which came up with a lot of trial and error methods during the period of demonetisation, so I guess it must be yet another hit and try attempt from their end to serve the innocent public at large, to save their neck. Herewith, it is very interesting to note that this report also claims that Demonetisation step didn’t have much impact on the recovery of fake currency.

Now let us see what the trusted soldier of our Pradhan Sevak has to say with respect to the details revealed in the RBI’s annual report. Mr. Arun Jaitely, who is managing two portfolios i.e. Finance ministry and Defence ministry, in the current government, has come to the rescue of the government by defending the step of demonetisation. Mr. Jaitley said that the objective of demonetisation was not to confiscate cash; rather it was to increase the tax base and move towards less-cash economy, as well as, stop fake currency and curb the funding to the terrorists. It’s the biggest achievement of demonetisation that black money has been deposited in the banks. [Reference: News article published on dated 31st August 2017, in the Rajasthan Patrika (Hindi Daily Newspaper)]

It seems as if, Chai waley se zyada, Jetli garam hai, Oops I mean, Chai se zyada ketli garam hai (Kettle is hotter than the tea). Well, Mr. Learned Minister, please be noted that your statement is contradictory to the claims made by both Mr. Pradhan Sevak, as well as, the RBI. Just to remind you Mr. Jaitely, that in his historic and crystal clear speech on the eve of 8th November 2016, the Pradhan Sevak, Mr. Narendra Damodar Modi, informed the three major reasons behind opting for demonetisation of the high currency notes i.e. 1) Corruption, 2) Black Money, and 3) Terrorism. I do hope that post the Bhartiya Janta Party (BJP) led government came into power the synonyms of these three reasons have not been changed to – increasing the tax base or moving towards the less-cash economy. And as far as, curbing of funding to the terrorists is concerned, who better than you being the Defence Minister, would be in a position to know that whether the graph of terrorism has come down post demonetisation or not. To the common man, terrorism is spreading its wings with each passing day.

Now Mr. Jaitley, with regard to your last claim i.e. “It’s the biggest achievement of demonetisation that black money has been deposited in the banks”, I would just like to draw your attention towards the fact that if the black money has already reached the banking channels then it is very conveniently been converted into the white money, obviously with the support of the so-called “successful demonetisation step”. And mind it there is no mechanism available for the government to filter the “entire” black money that has already been deposited in the banks and catch hold of all the “real” owners of such black money. So if at all, conversion of black money into white was the very motive of the demonetisation step taken by the government, then I would like to congratulate you and the entire GOI that no doubt you were actually successful in doing the same. Kudos to all of you!

Herewith, I would like to quote the following paragraph extracted from the fourth part of this Blog Demonetisation of High Indian Currency Note – Was it really a masterstroke? – Part 4 – “I very strongly urge the Comptroller and Auditor General (CAG) of India to probe into this matter and notify the citizens of India about the impact of Demonetisation on our economy and the country, as a whole. Until this happens, the politicians, with their buttery speeches will continue to misguide the innocent citizens of India. Do note that in a democratic nation, the ruling government is answerable to the citizens for each and every action of theirs. The truth has to come out in open and those responsible needs to take the onus of their actions. Mind it no one can get away with any of their actions just because they are in power”.

Now all those who have a sane mind can very well analyse the impact of demonetisation, in light of the facts available, and thereby, could judge for themselves whether it was a successful step taken by the GOI or not. The sooner the better, the GOI accepts their mistake and stop covering up with illogical statements every now and then.

I wish that may the Almighty give good sense to each one of us.

God Bless.

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Peyush Jain