Source: The Hitavada      Date: 09 Nov 2017 10:21:06

LOOKING back, Finance Minister Mr. Arun Jaitley is obviously happy that the objectives set for demonetisation of high value currency notes have been achieved one year after making the daring move. Because skeptics were not convinced that the move would do any good to the economy. One year after the historic decision the Government sees the move as a watershed moment. While taking a review on the eve of the anniversary of the demonetisation of Rs. 500 and Rs. 1000 currency notes, Mr. Jaitley believes that the decision has bequeathed a clean and honest economic system to future generation, where there will be no place for tax-dodgers, dishonest people. Every transaction will be accounted for with less of cash dealings, a measure that may reduce the incidence of generation of black money. 

Indeed the enormity of the decision can be gauged from the fact that in one stroke the Government was able to withdraw almost 85 pc of currency in circulation. Such a massive withdrawal of cash from the system overnight was bound to create initial hiccups and panic, especially among those who had accumulated much unaccounted money without disclosing their source of earnings and evading taxes. Such people naturally had a huge problem in getting their hidden incomes on official records. The Government of course had offered a hand of help to do so but there were riders for doing so which the dishonest could not fulfill. While some did accept the Government’s window of help, many others were left with piles of useless currency which had lost its value totally. The Government, on the other hand, was able to mop up bigger tax revenue than usual, as a result, which otherwise would have been impossible to achieve.

Besides, those holding unaccounted black money, there were other elements whose whole life depended on underhand dealings, money-laundering and terror-funding, creating benami properties by evading taxes. By demonetising high value currency the Government had aimed at smashing these clandestine businesses. The Government was especially keen on striking at the root of terror-funding. By demonetising the high value currency, which had become the prime source of hoarding black money, the Government was able to break the back of the source of terror-funding. It simultaneously dealt a body blow to those who were circulating fake currency, which again was proving to be a big headache for the Government to control.

For the corrupt people, especially in the administration, demonetisation and transparency through digitisation of Governance, as stressed by the Union Government, demonetisation acted as a big blow. Along with demonetisation the Government has been stressing on giving a push to digitisation process of administrative function to impart transparency and speedier delivery of services to the common man.

That single move to withdraw high value currency from circulation was aimed at achieving many goals. And from Mr. Jaitley’s statement he appears to be happy with the results after the passage of one year post-demonetisation. He is convinced that the measure has ushered in a much clear, transparent and honest financial system. It was a ‘surgical strike’ on the flourishing black money economy, that had to be carried out in utmost secrecy and with great precision with a huge element of surprise and even shock. Mr. Jaitley is aware that the benefits may not be immediately available. But the wait and pain are worth the benefits that are likely to accrue in the not-so-distant a future.

The Government’s next target could be the phenomenon of creation of benami properties. This product of crony capitalism deserves to be smashed with equal ruthlessness.