Black money: Time to recalibrate strategy

| | Delhi

This refers to the editorial, “Was it worth it?” (November 8). Demonetisation of high-value currency dates back to the Mughal era, when after annexing a territory, the invaders would effect sikkabandi with the aim to cripple the economy of the land. The primary motivation then would be to exchange the previous ruler's coins invariably for a lower value to ensure that the local people became dependent on them and toed their line. Later, during the end of 16th century, demonetisation became a policy initiative to bring in a unified and consolidated monetary system for the empire. In 1978, the Morarji Desai Government instated the High Denomination Bank Notes (Demonetisation) Act to carry out investigation and prosecution of defaulters and counterfeiters. Contrary to this, while addressing the Parliament on December 9, 1998, the then Finance Minister Yashwant Sinha cited the need for notes of higher face value, in public interest, for normal cash transactions.

Last year, the Narendra Modi Government’s surgical strike against black money, corruption and counterfeit currency by stripping the high denomination currency notes of their statutory status was hailed as a “black swan” moment for the Indian economy. However, now it seems that it was a mere exercise in reaping political dividends while the real offenders continue to park their illegitimate funds in offshore havens. It is time the Government re-calibrated its response to fight the menace of black money and “cleanse” the economy of its blots.



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