The RBI Governor Shaktikanta Das is the only Governor without an economics background; he studied history. He was the Secretary, of Economic Affairs on November 8, 2016, when demonetisation was announced by the Prime Minister instead of the RBI Governor. Now on 3-year extension as RBI Governor, he has announced that Rs 2000 notes will not be accepted after Sept 30, 2023, but will remain a legal tender. How could it be a legal tender when it will not be accepted by anyone?
He claimed that this is done under the Clean Note Policy. Under this policy, new currency notes in the same denomination are periodically printed and given to the banks and old notes are accepted by the banks as soiled notes and remitted to the RBI which shreds and destroys the same. You don’t withdraw the entire notes from circulation. Who is he trying to fool? What is the value of ‘I promise to pay’ signed by the RBI Governor in the notes? The faith in RBI is slowly eroding.
How did the notes become unclean in just seven and a half years? If so, why do the Rs 500 notes, Rs 200 notes and Rs 100 notes printed in 2016 continue to be in circulation?
In 2016 when banks were providing just Rs 4000 on exchange, when bankers were asked to use indelible ink on their fingers while exchanging notes, when 108 people including 12 bankers died; huge amounts of fresh currency notes of Rs 2000 denomination were caught with some people.
On the first anniversary of demonetisation, a list of 155 widely reported cases was released at Jawaharlal Nehru University, Delhi. Till date, no news of punishing any of the 155 has come to light. In Tamilnadu, there were many cases reported, including some connected to BJP and AIADMK. The biggest was a huge quantity of Rs 2000 notes found at the residence of Mr. Sekar Reddy, a contractor and member of the Tirupathi Devasthanam Board (Trustee). Similarly, a huge quantity was found in the office and residence of Mr. Ram Mohan Rao, then Chief Secretary. What are the findings in these two cases? The Govt has to clarify. The Police Dept has to clarify. Sekar Reddy has once again become the trustee of Tirupathi temple board. Ram Mohan Rao was reinstated and retired happily from Govt service.
During that time, Mr. P. Chidambaram, former Finance Minister, and former Home Minister, made a public statement- “I doubt that fresh notes from the RBI printing press were reaching the hands of few without going through the banks.” I quoted the same in the media many times, but the Govt has not replied to this allegation at all. In fact, All India Bank Officers Confederation as well as SBI Officers Association had demanded that RBI should provide details of notes with numbers and prefixes supplied to each bank to the investigation agencies, but it never happened. Why was this not done if there was nothing to hide?
The decision to demonetise was taken only on 8th November, but fresh Rs 2000 notes reached the currency chests of banks a few days before. How? It could have reached a few individuals also, as suspected by Mr. P. Chidambaram. Almost all Rs1000 and Rs 500 notes were returned to RBI before the deadline though Supreme Court was told that at least Rs 3 lakh crores will not return and that is black money. It is the duty of Govt to explain this.
With the clarification that no ID card is needed to exchange Rs 2000 notes, why is there a restriction of only 10 pieces at a time? It is simply the harassment of people. There is no ambition to get black money. Rather, this seems to be a plan to help the hoarders of Rs 2000 notes to exchange them.
The 2016 demonetisation failed on all counts – ending black money, fake notes, corruption and terrorism. The average growth in income tax collection is 11-12% which was the same during the previous period. In the last 10 years, direct tax to GDP ratio has increased from 5.6% to 5.9% only.
As per the RBI Annual report, there has been an increase of 150% every year in fake notes detected and reported. So what is in circulation will be many times more. They are difficult to detect. Are the banks going to get fake notes which resemble genuine notes and send them to RBI? Will RBI release details of Rs 2000 notes remitted every day? Corruption is at its peak and visible during all elections. There is going to be no end to it. Terrorism has not ended. Though digital transactions have increased, cash is the king. Cash in circulation today is double of what it was in 2016. Many explanations are given for withdrawing Rs 2000 notes by the newspapers. One is the ‘Clean Note Policy’ which is an eyewash as explained above. Second, getting back the black money, which also doesn’t hold ground. Some are saying this is done to divert attention from Karnataka election results. Maybe, but the more considerable doubt is, as Mr. P. Chidambaram suspected in 2016- new notes may be printed and some of them reach the hands of a few individuals before the 2024 elections. Will RBI bring transparency to clear doubts from the minds of people?
During demonetisation 2016, 15 crore people lost their jobs. Lakhs of MSMEs disappeared. Mr Narendra Modi said if I don’t deliver in 50 days, you can take any action. People have started taking action in Karnataka. Five more state elections are due this year. General Elections are going to be held in 2024. Are the people going to take action for the misdeeds and misleads?