-Dev Ankur Wadhawan
The scourge of black money undoubtedly is a huge curse which has plagued India for decades.
During public and private discussions, this particular topic raises its head time and again. So, what happened to that promise of bringing back black money allegedly stashed away in foreign bank accounts? Why has the Modi Government not yet fulfilled its promise of bringing the unaccounted wealth that was illegally deposited in foreign shores within 100 days of coming to power? What about the fulfillment of the promise to deposit Rupees 15 lakhs in every Indian’s bank account by bringing back black money or unaccounted for wealth? So, was it, as the BJP President once said, a mere jumla, that was coined to win the 2014 elections? These are some of the questions that have often been asked, sometimes with concern, at times, sarcastically, to take on a party that made black money as one of the key weapons during election campaigning to rise to power.
Its true that Narendra Modi targeted the then party in power, Congress, in the run – up to the Lok Sabha elections, claiming that the party has failed in bringing back the black money stashed away in foreign shores which has been hampering the country’s growth and development. Some analysts even credit Modi’s victory to a great extent to this purported fight against the menace of black money, corruption at high levels, amongst other factors.
Narendra Modi, indeed, after the formation of his Government at the Centre, taken the step of forming an SIT to look into the matter regarding black money and suggest ways of tackling the issue. However, it was considered as slow in its approach and as one that did not make much headway even after coming into existence around two years ago.
But with the big – ticket decision of doing away with Rupees 500 and Rupees 1000 notes, the Modi Government, that was finding itself under the lens on a score of issues, seems to have redeemed itself from a rather difficult situation to a certain extent.
The 500 and 1000 Rupee notes as we have known them for a fairly long time will no longer be valid legal tender. You can no longer make legal use of them at the Grocery stores, at the movie multiplexes, in malls, to buy electronic items, etc. They have been put out of use. The Government has decided to introduce new currency notes instead. Rupee 2000 note has been introduced which is expected to soon be widely in circulation. A new 500 Rupee note will also soon be available in wide circulation. The Government gave a window till the 11th of November, during which it allowed the use of old Rupee 500 and 1000 notes at Railway stations, bus stands, airports and hospitals. The announcement was made by PM Modi during around 38 – minutes address, which included his speech first in Hindi and then in English. Post that, people in large numbers were witnessed outside ATMs and at petrol stations. Some wanted their 500 or 1000 notes to be put in use, while a few others wanted to withdraw money of smaller denomination, fearing that they may soon run out of legal currency. The PM had stated that from midnight between the 8th of November and the 9trh of November, 500 and 1000 rupee notes will not be legal tender. Meaning that they will not be acceptable for any kind of transaction, barring exceptions for a few days. Once the traders, shopkeepers and various vendors became aware of the issue and its underlying implications, several of them refused to accept Rupees 500 and 1000 notes even before the clock struck midnight. The Government has left currency of lower denomination, for example, Rupees 100, Rupees 50, Rupees 20, rupees 10 and all coins in circulation, untouched for the time being. PM Modi announced a window of 50 days, that is from the 10th of November till the 30th of December, to deposit currency notes of Rupees 500 and Rupees 1000 at Banks or post offices. If in any case a person is unable to deposit till the 30th of December, that person can return it to the designated offices of the Reserve Bank of India, however, after filing declaration form alongwith proof and reasons. Cashless transactions are not going to be impacted by the Government’s announcement. And, thus, it can help boost the business of PayTM and other wallet companies who are involved in facilitating cashless transactions.
Real estate property prices may witness correction due to elimination of black money or unaccounted wealth from the market to a large extent. Property prices can fall.
The Government seems to be aware that there are going to be inconveniences involved, especially to the poor people, who are not accustomed to making use of or do not hold bank accounts and therefore, are unlikely to trade in cashless or paperless transactions. This reflected in PM’s remarks, who during his speech, did mention that it will cause some hardship to you, that in country’s history, there comes a moment when people will want to participate in the nation building and reconstruction and that very few such moments come in life.
During the course of announcing one of the boldest steps by the Modi Government, the PM mentioned that there is a need for a decisive war against the menace of corruption, black money and terrorism and that corruption, black money and terrorism are festering wounds which make the country hollow from within. In the last few months, it is being believed, a view had increasingly gained ground that black money and counterfeit currency was fueling a parallel economy in the country which was aiding and abetting terrorism, shady deals and impacting the pace of the nation’s growth. Acutely aware and concerned about India’s image on the world stage, Modi mentioned that India’s global ranking on corruption had moved only to 76th position from 100th earlier.
The move is going to, in particular, impact those involved in shady practices like hawala transactions, with unaccounted large sums of black money extremely hard. The Government has been applauded for ensuring that the entire move was shrouded in a great deal of secrecy as its entire purpose could have failed if there would have been large scale leakage of Government’s decision. Those with large sums of black money or unaccounted wealth on which they had not paid any taxes, are believed to be a worried lot in particular and in a state of utter shock due to the Government’s move.
Its also being speculated that the move will help do away with unaccounted wealth which was being used in large quantities during elections. In the near future, the move is expected to have a positive impact on the crucial elections of Uttar Pradesh and Punjab.
The Government also expects that the move will help in nipping in the bud Pakistan’s nefarious designs at fueling terrorism and drug trade in India through the use of fake or counterfeit currency. The recent spate of terrorist activities and rise in violence in the border state of Jammu and Kashmir has had the Government increasingly worried. Many amongst the NRIs staying in countries such as USA, Britain are believed to be happy with the move as they believed that earlier, despite contributing earlier, their attempts were neutralized due to the scourge of black money. Industry leaders, banks and various voices have mostly hailed the Government’s move. Parties out of power have been mainly subdued in their reactions, with more than one leader claiming that its a decision which has been taken without proper planning and will impact the poor farmers.
The Government’s step seems to be an honest effort against black money hoarders and should help towards derailing parallel economy which had been fueling terrorism and shady, illegal deals in the long – run. However, one must not forget that this Government came into power after making the promise of bringing back large sums of black money stashed abroad. Therefore, it must not get carried away and fulfill that promise.
The Government expects that the decision will help in attaining following goals:
# Boost the image of Modi Government in its fight against black money
# Curb terrorism and spread of counterfeit currency
# Bring correction in property prices
# Help the economy by curbing underhand or illegal practices, such as hawala transactions
# Will help in preventing use of black money in upcoming elections, including in Punjab and Uttar Pradesh