By : M.S.Yatnatti Editor and Video Journalist Bengaluru : Prime Minister Narendra Modi on Tuesday announced that Rs 500 and Rs 1,000 rupee banknotes would be withdrawn from circulation at midnight to crack down on rampant corruption and counterfeit currency. From November 10 till December 30 you can deposit the old notes at your nearest bank or post office accounts without any limit. RBI will issue new currency notes of Rs 500 and 2000 from November 10 onwards. These notes will have new design. Few experts state that this scheme of scrapping and re-printing the notes will only add expenditure to government but this will not eliminate black money.As previous government also did the same things .But no tangiblr results.UPA Government did exchange pre-2005 currency notes, including those of Rs 500 and Rs 1,000 denominations, at banks and the Reserve Bank of India (RBI) has asked the public to deposit the old design notes in their bank accounts or exchange them at a bank branch convenient to them during UPA Government . It is easy to identify pre-2005 notes. The currency notes issued before 2005 do not have the year of printing on the reverse side. In notes issued post 2005, the year of printing is visible at the bottom on the reverse.The rationale behind the move to withdraw banknotes printed prior to 2005 is to remove them from the market because they have fewer security features compared with banknotes printed after 2005, RBI said.It is standard international practice to withdraw old series notes.Post-2005 notes have added security features and help in curbing the menace of fake currency.Over 164 crore pre-2005 currency notes of various denominations, including of Rs 1,000 were shredded in regional offices of Reserve Bank in 13-month period ending January.The face value of the shredded currency notes was around Rs 21,750 crore. As per the details given in Parliament in March, 86.87 crore pieces of Rs 100, 56.19 crore pieces of Rs 500 and 21.75 crore pieces of Rs 1,000 were shredded.
Government wants to eliminate black money by scrapping the currency notes and but by re-printing them it is not gaining anything .As reportedly people have smart accountants in India who have expertise to guide citizens to get the black money in white and white in black legally .Reportedly one accountant made 1000 fake company and they invested in real company of several thousand crore and made that single company have real white money and it is reportedly headed by a big politician and then question of getting black money out remains a big question.
Reportedly Since black money can't be used for buying financial assets, the same is used for purchasing mostly real estate and gold. Since more than 80% of money in circulation are through Rs 500 and Rs 1,000 notes, the best solution to this problem is the withdrawal of these notes from circulation. How will it benefit? First, withdrawal of Rs 500 and Rs 1000 rupee notes will result in immediate unearthing of black money. This is because people who are hoarding black cash currency will be forced to come to banking system for converting. Second, withdrawal of high denomination notes will help to reduce black money generation in future. This is because it will become difficult to deal in cash, especially for large deals that runs into crores. Smuggling of Indian currency outside also become really difficult. This is very important for our national security also because terror outfits usually use smuggling and black money route for financing. Major economies have already started taking steps in this direction.
Government can direct cash transfers to accounts of citizens as a game-changer as UPA did: Total computerization and ERP adoption and online government is first step towards making a Corruption-Free Government and Governance . One area where government should concentrate is bringing about systemic changes and automation, which would help in minimizing corruption if not eliminate it. For example computerization and automation of railway ticketing has virtually eliminated touts and reduced to a large extent corruption. But there are several other areas in railways where corruption is rampant like contracts, catering, procurement, scrap disposal and so on, which are not yet fully transparent. Smart cards in metros have virtually eliminated ticketless travel. Likewise digitalization, a pet subject of Modi, will minimize corruption in movement of files, tenders and so on as it would introduce tran Reportedly Kala Dhan is created by the people who do not pay tax for their earnings and eventually it take birth in India and grow in India. So question of bringing it from outside does not arise and it is alleged that balk money exists in all part of the world. .In India, Black money refers to funds earned on the black market, on which income and other taxes have not been paid. The total amount of black money created in corruption deals is unlimited and quantum is unknown. Effective and credible deterrence is necessary in combination with reforms, transparency, simple processes, elimination of bureaucracy and discretionary regulations. Credible deterrence needs to be cost effective, claims the report. Such deterrence to black money can be achieved by information technology (integration of databases), integration of systems and compliance departments of the Indian government, direct tax administration, adding data mining capabilities, and improving prosecution processes. Time is ripe for political parties taking sincere approach on such issues. The irony is that the politicians and their crony capitalists have the bulk of the black money which they liberally use during the elections when the Election Commission and other bodies remain helpless. The elections in the country have down-graded to battle of money-muscle power.
Reportedly the money that is siphoned off in scams is no doubt large but the money made in petty corruption is not smaller though they are not stashed abroad. The money made through corruption starting from driving licence, MNREGS, PDS system, subsidies, public procurement, bribing lower staff to push files, paying money to taxmen for getting their returns scrutinized and securing genuine refunds, real estate registration, bribing the cops for traffic and other violations and so on hit hard the common man most and stunts economic development. The parallel economy, which could be as much as 50 per cent of GDP contributes greatly to inflation, delay in decision making and at times stalls development activities because some vested groups are not able to make money.