On 8th November 2016, Mr. Modi announced on all national television channels that 500 and 1000 currency notes would not be legal tenders from midnight. Like a thunderbolt, it struck many, from tax evading businessmen and corrupt officers stashing money in their lockers to terror funding organizations causing bloodshed and massacre with help of fake Indian currency and black money. Demonetisation jolted the nation out of its slumber after decades.
Demonetisation is the act of stripping a currency unit of its status as legal tender. The Union (Parliament) has the sole power to make laws regarding currency, coinage, legal tender and foreign exchange under entry 36 of first list of schedule 7 of the constitution. Demonetisation took place in India in 1976 as well as in 1978 when 10,000 notes were demonetised along with 1000 in 1954 and along with 1000 and 5000 by the Morarji Desai Government in 1978. This is the third time, similar decision has been taken.
The decision of Demonetisation was taken mainly because of three reasons. The first one was to tackle black money, the second was to check corruption and cash circulation and the third was to stop terror funding. Is these problems are considered in as grave manner as they really are, this move had in fact been due for a long time. In India, all sections have been accustomed to using cash for all petty transactions and even high value transactions for a long time. This has resulted in a parallel economy and has caused inflation and grave problems like insurgency, black marketing, terrorism etc. Inflation has sent the price of land and building skyrocketing and owning a house has become a distant dream for a common man.
This weapon of Demonetization shall be used to fight against undisclosed income which is converted into assets like gold and real estate. Government officers have their palm greased and the money find its way to properties usually benami. Within days on his decision on Demonetisation, our PM attacked benami properties. These properties are those that are bought by people with black money on fictitious names or names of other people but enjoyed by the black money holders. Under the Benami Transaction Prohibition Act 2016, a transaction is termed benami, if a property is owned by one and paid by another. The act prohibits recovery of the property held benami from benamidaar by the real owner. Also benami properties are liable to be confiscated by the government.
Demonetisation has severely attacked terrorism too. Where earlier the antinational elements had a free run through India’s security apparatuses, now the absence of cash will hit all terror activities that thrive on black money and fake notes for their survival. Lack of hawala transaction will hit activities of Maoist and other insurgent groups too as the stocked currency has become useless and the availability of new high-value notes is not in abundance.
Demonetisation though has multifaceted positive effects on the health of our country yet it brought hardships in the life of the common man. While black money hoarders and tax evaders are finding ways to make their black money white; a common man is still standing in long queues wasting thousands of productive hours. Besides this, the black money stashed in terms of gold, properties, foreign assets, foreign currencies and in foreign banks are still out of purview. The large fishes are at large while the small fry has been trapped. Several labourers and hawkers have lost their livelihood as there is no cash to pay them. A daily wager committed suicide as he wasn’t getting work and a few old and feeble died while waiting for their turn in queue.
No pain, No gain may be the right phrase to sum up this discussion on demonetisation. With a windfall of approxim
