Rajiv Kumar, the former vice-chairman of government’s thinktank Niti Aayog, today gave a mixed report card to the notes ban of 2016. The Supreme Court, which backed the notes ban in a 4-1 verdict, had steered clear of the question, saying it is “not relevant” whether the objective of the overnight ban was achieved or not.
Mr Kumar, however, told NDTV that he didn’t think the notes ban had managed to achieve all it set out to do. The only positive, he said, was digitisation.
The outcome of notes ban is “quite mixed”, Mr Kumar told NDTV in an exclusive interview. “Because given the nature of our economy, the unorganised sector in our economy, a large segment of our economy is running on cash, the large sectors like construction etc. the attempt to weed out the cash economy or the black money etc, I don’t think it would have been achieved,” he added.
While announcing the notes ban in November 2016, Prime Minister Narendra Modi had made it clear that the ban was part of a larger plan to curb black money, and thereby terrorism.
But six years on, the amount of fake currency in circulation is far more than 2016.
The value of the total currency in March this year has gone up 89% to Rs 31,05,721 crore, compared with Rs 16,41, 571 crore as of March 2016, the Finance Ministry told the Parliament today.
According to data shared by the ministry in Lok Sabha today, the volume of currency in terms of the number of notes in circulation to has jumped 44 per cent to touch 1,30,533 million in March, 2022.
The value of digital payments, meanwhile, has shot up from Rs 6,952 crore in 2016 to Rs 12 lakh crore in October 2022.
The majority judgment from the top court today maintained that the government has the power to demonetise bank notes of all series and proper procedure was followed while banning notes of Rs 500 and Rs 1000 denomination in 2016. The court said decision passes the test of proportionality – meaning it is a reasonable way to root out black money and fake currency. The 52-day time given for exchange of notes was not unreasonable, the judges said.
In a strong dissenting judgment, Justice BV Nagarathna said the notes ban was “vitiated and unlawful”.
