On a day the Supreme Court upheld Prime Minister Narendra Modi’s 2016 demonetisation move, with a dissenting judge ruling, a former bureaucrat shared a mixed review of the move.
Rajeev Kumar, former vice-chairman of the government’s thinktank Niti Aayog, told NDTV on Monday that he does not think demonetisation has achieved everything it wanted to. One positive, he said, was digitization.
The Supreme Court, in a 4-1 verdict, upheld demonetisation, saying it was “not relevant” whether the objective of the overnight ban was achieved or not.
Speaking to NDTV, Kumar said that the results of demonetisation were “very mixed”.
“Six years later, I’m not so sure about it. I believed it was worth it when it started, but the way things have turned out… well, I have to say that digitization has There has been a boost and to the growth of the fintech industry and the fact that we have achieved a lot of financial inclusion in the economy, etc. I probably won’t repeat it here, but the purpose for which it was done was largely achieved is,” he said. Asking whether it was worth it.
Announcing note ban in November 2016, Prime Minister Modi had made it clear that the ban was part of a larger plan to curb black money, and thus terrorism.
But six years later, the amount of fake notes in circulation is much higher than in 2016.
Mr. Kumar said: “Given the nature of our economy, the unorganized sector in our economy, a major part of our economy running on cash, large sectors like construction etc. Efforts to eliminate cash economy or black money etc., I don’t think it would have been achieved.”
The Finance Ministry recently informed the Parliament that the value of total currency in March last year increased by 89% to Rs 31,05,721 crore as compared to Rs 16,41,571 crore in March 2016.
According to the data shared by the ministry in the Lok Sabha, the amount of currency in terms of the number of notes in circulation has increased by 44 per cent to 1,30,533 million in March 2022.
Meanwhile, the value of digital payments is set to grow from Rs 6,952 crore in 2016 to Rs 12 lakh crore in October 2022.
The top court’s majority judgment said the government has the power to demonetise all series of notes and that due process was followed while banning Rs 500 and Rs 1,000 denomination notes in 2016. The court said the decision passes the test of proportionality – meaning it is a fair way to root out black money and fake currency. The judges said that the 52-day time given to exchange the notes was not unreasonable.
Justice BV Nagaratna, in a strongly dissenting judgement, said demonetisation was “perverse and illegal”.