PART-I
JP Rajkhowa
In a sudden, unprecedented address to the tion, Prime Minster rendraModi announced on Tuesday 8th November 2016, that five hundred and one thousand rupee notes will cease to be legal tender from the midnight of that day, which he said, was decided with the objective of ridding the country of the mece of black money and corruption, as also to dry fund for terrorists, drug traffickers, circulation of high value fake currency etc., which have been costing the tion heavily. Notes of 100, 50, 20, 10, 2 and 1 rupee will continue to be the legal tender. He announced that the existing Rs.500 and Rs.1000 notes could be deposited to the Banks or post offices between November 10 and December 30 on submission of valid identity cards without any limit. Per day a person would be allowed to exchange currency up to Rs.4000 (raised to Rs.4500/- by announcement on 13/11) against newly created Rs.500 and Rs.2000 notes, with a limit of Rs.20000/- per week.
However, till midnight of 11th November, 2016 government hospitals, railway, air and government bus ticket booking counters, Public Sector Oil companies' authorized petrol, diesel and gas stations, consumer cooperative stores authorized by State or Central government, milk booths so authorized as well as crematoriums will accept the old notes (later time extended till midnight of 14th November 2016 and latest on 13/11 to 24 /11/2016).14/11 being a Bank holiday, the new limits would be applicable from 15/11/2016 only.
As for withdrawal from Banks, Rs.10,000 per day per Account and Rs.20,000 per week will be initially allowed, to be increased in coming days (since increased to Rs.25000/- on 13/11). The ATMs will start functioning from 11/11/2016, with daily withdrawal limit of Rs.2000 per debit card (raised to Rs.2500/- on 13/11), to be increased to Rs.4,000 gradually.Modi also said, there will be no restriction on non- cash payments by cheques, demand drafts, debit or credit cards and electronic fund transfer.
Reportedly, the last- minute announcement to demonetise the high- value notes was necessary ''to stop terrorists and drug cartels in their tracks. An element of surprise was essential, or else they would have made necessary arrangements". So far so good- the demonetisation was announced ostensibly, in tiol interest. However, what many have been questioning, is why Rs.2000 notes were decided to be brought in, replacing 1000 rupee notes, as the former could be preferred by the corrupt public servants, politicians, unscrupulous business persons, drug traffickers, gun runners, hawala dealers, etc., and also for those engaged in counterfeiting currency notes, because of 'space advantage'- kind of two in one. Many pro- Modi enthusiasts even termed it as another ''surgical strike"- this time against corruption and 'black money'. We general welcome this Bold Step, as one of the measures to be adopted for curbing the mece of 'black money' connected with the crimil activities, as announced. However, we have certain observations and reservations on the issue, as elaborated hereifter.
It is reported that, as per RBI's official data, till March 2016, Rs.14 lakh crore out of Rs. 16 lakh crore(also reported as 18 lakh crore?) worth of currency issued by the RBI were in denomitions of Rs.500 and Rs.1000. It is also stated that, 86 % of these notes comprise Rs.1000 and Rs.500 notes. It is suspected that, terrorists and crimil gangs as well as corrupt people mainly use these high- denomition notes, and as such, the 'surgical strike' would hit these hard and black money circulation would substantially be controlled. There are reports, post- demonetisation, that, the black money- holders, failing to divert the illegal cash to real estate, jewellery, bullion purchase etc. have already dumped the 'useless paper' into the Ganges, pits, car boots, public drains etc. and some such persons, as in Assam, had to lose a few crore of rupees due to seizure by police, while transporting from one place to another. At some places, premises of Jewellers and bullion dealers were raided by the I. T. Department, but the amount of cash realized is not revealed as yet. Obviously, no sizeable amount was recovered. The quantum of 'black money' recoveredor destroyed by the holders is not yet announced by the Central government or the RBI till 13th evening. On the other hand, there is a media report, that, the West Bengal Unit of the BJP had deposited Rs.2Crore demonetised notes, hours before the announcement was made by the Prime Minister on 8/11, which is very disturbing!
What a tragedy for the millions of 'aamadmi' and millions of middle class people, govt. /p.s.e. / bank employees/pensioners included, who have been subjected to untold miseries, harassment, humiliation and 'legal deprivation' to draw their own hard- earned money from Banks or Bank ATMs and to deposit the demonetised notes into their bank accounts, and that too after joining long serpentine queues, as if to draw quota of rations distributed to famished people in some of the impoverished third world countries, like Somalia under intertiol charity! Several persons lost their lives while standing in the queues, some died due to sudden shocks after withdrawing their money days before 8/11 for daughters' marriages, many had to defer cremation of near and dear ones due to cash crunch as fees charged by the crematoriums could only be paid by old demonetised notes, not other expenses, thousands are a worried lot as cash forshraddha ceremonies of parents, close relatives, family members died before 8/11 or thereafter, as required fund is simply not available either from ATMs or Banks. Lakhs of daily wage earners had no income for days, as people didn't have the cash to pay their wages.
Thousands of students had to go without any food as they had to spend long hours in the queues right from very early morning, and still hundreds couldn't draw the permitted cash, as the ATMs became dry, in one or two hours. The 'aamadmi' in the 8 north-eastern states are the worst sufferers, as most of the interior areas are not covered by Bank branches or ATMs nor majority of the population are covered by the much hyped "Dhan Jan" scheme. Foreign tourists, NRIs as also domestic tourists have been facing major cash crunch, as at many places ATMs were not there and at other places ATMs had long queues and by the tie they reached the machines, money was not there.
Travellers from USA, for instance, could not exchange Dollars for rupees in that country, as only 500 and 1000 rupee notes are imported there and new notes were not supplied. On their arrival in India, they could get, on 14/11/16 only $80/- per passenger. (To be continued)