RBI to announce facility for NRIs to exchange old notes
The Reserve Bank of India (RBI) on Saturday said that it will introduce a facility for exchange of old specified…
Unearthing black money and dismantling the shadow economy are said to have inspired the demonetisation exercise, and what advocates of the government are using as prime weaponry to try and silence critics of the move and how it has dislocated the lives of the common citizen who never had much wealth — let alone unaccounted money — to begin with.
It is too soon to assess the success of demonetisation in driving black money to extinction, but in just over a month an entirely new illegal trade in currency has taken root, and appears to be flourishing. While the hapless citizen waits hours in long queues, often fruitlessly, to get a fraction of the money needed to continue with the business of living, vast amounts of new currency are being seized in corruption-linked raids by various agencies.
Which proves the extent to which the new black business has prospered despite the government’s stated determination to cleanse the system. For obvious reasons no comprehensive figures will be officially released (they would prove embarrassing), but there are reports that at least 50 banks are under the scanner of the Enforcement Directorate, while the Central Bureau of Investigation, Income-Tax Department and other central and state investigation agencies have taken independent action: at times political figures have been “nailed.”
Yet that is only the tip of the proverbial iceberg. Still to be tackled are the “commission agents” who operated openly when a “new notes for old” system functioned over-the-counter, and who now have taken to laundering money using “zero balance” accounts and a range of other devious methods.
It would certainly be incorrect and unfair to blame the government, finance ministry, RBI and the banking sector at large for the racket, but it does point to the sarkari failure to predict what the man-in-the-street feared would happen. The root of the problem lies in the lack of preparation to counter what Dr Manmohan Singh has slammed as “organised loot and legalised plunder”.
The so-called “digitisation drive” favouring an elusive cashless economy and similar moves are weak attempts at diverting public attention away from the inept implementation of demonetisation. Mr Narendra Modi may have had the right idea: in Arun Jaitley and his squad he lacked the means to translate thought into positive action.
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