Demonetisation Bang Bang

Signaling profound resolve and conviction to combat the menace of black money and willingness to take difficult measures for achieving considerable long term benefits, Prime Minster Narendra Modi on the evening of November 8, 2016 announced cancellation of the legal tender character of the high denomination bank notes of Rs.500 and Rs.1000. Department of Economics Affairs, Ministry of Finance vide press release dated November 8 reckoned the purpose behind government’s move that demonetisation would curb terror financing through the proceeds of Fake Indian Currency Notes and use of such funds for subversive activities such as espionage, smuggling of arms, drugs and other contrabands into India and for eliminating Black Money. Government’s resolve and willingness to curb black money was once again echoed with no holds barred on November 13 when in Goa Prime Minster made fiery speech and showed determination to go all out to make the demonetisation move a success.

- C.A. Arihant Kumar Baid

Taking a political call of such a highly sensitive move with heavy bearing on economic affairs of the Country has earned all new awe for Prime Minister particularly in light of the fact that, information to recall the currency notes was shared on “need-to-know” basis with merely “limited and identified” people, even when RBI witnessed leadership transition from Raghuram Rajan to Urjit Patel, to maintain the confidentiality. It was part of confidentiality that formal procedure of Economic Affairs Secretary writing to RBI mooting the proposal and RBI convening the Board to pass a resolution to accept proposal and communicating it back to the Government was completed only on November 8. It was after this process that the Cabinet members were informed during the meeting on the evening of November 8. So the total formal procedure was completed in a day before announcement was made public by the Prime Minster to roll out the move.