Pulling out high currency notes a ‘half-baked plan’, says P Chidambaram

Experts have criticised that demonetisation did not achieve the objective it was aimed at.

By: ENS Economic Bureau | New Delhi | Published:November 13, 2016 2:40 am
rs 500 ban, rs 1000 ban, rs 500 invalid, rs 10000 invalid, currency ban, black money, Chidambaram, tax, tax on black money, demonoitisation, economy, paperless economy, indian express news, india news, latest news Former Union Finance Minister P Chidambaram. PTI Photo

Former Union Finance Minister P Chidambaram on Saturday criticised the NDA government’s decision to pull the Rs 1,000 and Rs 500 currency notes out of circulation, saying that the move has pushed the common man into “misery and despair”.

“This scheme is not demonetisation. This is ‘Old Notes for New’. Unprepared government pushes common people into misery and despair,” Chidambaram said in a tweet. He also accused the government of not coming up with a concrete action plan to implement the scheme smoothly.

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“The half-baked plan has benefited only touts and middlemen. Government should publish the 2012 CBDT report that advised against demonetisation,” he said.

The Central Board of Direct Taxes (CBDT), in its 2012 report, had cited the two previous occasions when demonetisation as a tool was used to tackle the black money issue. “Demonetisation of high denomination currency notes is believed to be one of the methods to ‘kill’ the extant black economy, and to curb the generation of black money. In India, demonetisation was implemented in 1946 and 1978. Experts have criticised that demonetisation did not achieve the objective it was aimed at. Further, inflation over the years and a large cash economy requires higher denomination currency notes to keep the cost of monetary management of the economy low,” the report
had noted.