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Homechevron_rightOpinionchevron_rightEditorialchevron_rightDemonetisation move a...

Demonetisation move a blunder

Demonetisation move a blunder

Prime Minister Narendra Modi announced the demonitisation of Rs 1, 000 and Rs 500 notes with effect from the midnight of 8th November this year sending shock waves across the nation.

The Rs 1, 000 and Rs 500 notes that constituted up to 86 per cent of the nation’s valid currency was made invalid citing it as a move to check black money stashed as cash, destroy fake currency and curtail funding of terror networks. The determination and the audacity initially displayed by the Prime Minister and the Reserve Bank of India who implements the decision, isn’t seen now with both coming up with rectifications, explanations and promises every day intensifying the anxiety as well as the uncertainty of the citizens who are already in severe trouble.

The Reserve Bank orders have been amended 60 times after the government’s demonetisation announcement. Those who were in support of the move by the PM who sought 50 days to overcome the hardships post demonetisation are visibly in panic now. Andhra Pradesh Chief Minister Chandrababu Naidu who heads the 13-member central committee to look into demonetisation issues, had initially extended complete support to the move. But he has now been compelled to change his tone saying that ‘a lot of problems’ still remain even fifty days after the decision. The AP Chief Minister while addressing a workshop of MPs, MLCs, MLAs and other leaders of the Telugu Desam Party (TDP) also said that he spent ‘two hours daily to ease the problems caused by demonetisation’ but was unable to find a solution to the problem. He pointed out that the transition to the digital economy aimed by the government wasn’t easy and that the government was not prepared for the move. The PM and his government keeps blaming the Congress and the other Opposition parties. But the TDP being an ally of the NDA doesn’t come under that category. Naidu, even though came up with clarifications later refuting his statements, admitted that there were issues in executing the decision.

While the Prime Minister’s calculations have misfired making a mess of demonetisation, it’s also an opportunity to assess if the hunt for black money has been successful. In the raids across the country by the income tax department post the November 8 ban until 19th, over Rs 3, 185 crore of undisclosed income were seized of which Rs 86 crore were new notes. This plainly means that the black money mafia has survived government’s demonetisation move as they have already equipped themselves well. Reports about the seizure of counterfeit currency surface almost every day, reinforcing the above notion. The seized Rs 3, 185 crore doesn’t come near the total amount of black money in the country. It’s also doubtful whether the money is sufficient even to meet the expenses for conducting the raids.

According to the revelations of the CBI Director in 2012, an estimated 5000 million US Dollars of illegal money were stashed in tax havens abroad by the Indian depositors. After four years, the amount should be unimaginably massive. It’s therefore impossible to check black money through the note-ban move. The government’s agenda, apparently, is at present, to hunt down the illegal money stashed in the Indian banks. And that too isn’t properly implemented with required vigilance as well.

The bank employees who break their backs working overtime and on off days due to demonetisation have called for strike commencing on 28th of this month to protest against the issues various banks and their employees are facing. The state of the income tax department employees is also pathetic. In short, the government’s so called war against black money without doing proper homework or carrying out the necessary preparations is a blunder right from the start.

Given that there is no easy way out or shortcuts to escape from the crisis and save the country, the Prime Minister and his government should perform a sensible and comprehensive re-analysis instead of getting puffed up by false prestige. Firstly, the Income tax system should be made transparent and logical in its functioning. Awareness should be instilled in the citizens about the need to cooperate with the income tax system for the benefit of the nation and not to fight against it. Secondly the corrupt officials who assist the illegal money hoarders should be instantly thrown out as the black money lobby wouldn’t have grown this much without their support. They surely deserve no mercy.

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