Source: The Hitavada      Date: 01 Sep 2017 12:05:59

WHILE the Opposition and some sections of economic experts continue to question the efficacy and effectiveness of demonetisation of high value currency last year, Finance Minister Mr. Arun Jaitley, the Finance Ministry and the Reserve Bank of India (RBI) have come out with detailed rebuttal, claiming huge success and gains from the major financial step. 

There is no denying that the decision to demonetise high value currency notes was a historic step by the National Democratic Alliance (NDA) Government, truly unprecedented in the history of the country and a very daring one at that. That showed the confidence the Government had in its bold decision.

The unprecedented action by the Government mostly stunned those holding enormous amounts of unaccounted black money, hawala traders, speculators, money-launderers, corrupt politicians and bureaucrats, because by one single stroke the Government had reduced their hoards of money to worthless paper. Of course those holding legal money too suffered some pangs initially.

But their difficulties were short-lived, lasting for a few months as the money supply to replenish banks with new currency faced some teething trouble in initial days. But the panic situation soon normalised.

The Government went ahead with its bold decision, quite aware that there would be much hue and cry all around. But was determined that demonetisation was meant to achieve multifarious objectives which would have very positive impact on the nation’s economy; curb corruption, reduce the menace of black money, raise tax compliance, end money laundering, stop terror funding and most of all achieve greater digitisation of monetary transactions and transform the economy into a ‘less cash economy.’

After ten months of the decision, the Finance Minister has reeled out statistics of the objectives achieved and silence the critics of demonetisation. There might have been some hiccups in the short term, but in the long term the decision would begin to show even better results.
Now Mr. Jaitley has turned his attention to bring cleanliness in electoral funding. That will be a big step towards reducing corruption.