Decision to scrap notes based on RBI recommendation: Govt

Ravi Shankar Prasad said that country's economy has 12-13 per cent cash component out of which Rs 500 and Rs 1000 account for 86 per cent.

By: PTI | New Delhi | Published: November 26, 2016 10:13 pm
demonetisation, rbi demonetisation, notes scrapped, 1000 note scrapped, 500 note scrapped, ravi shankar prasad demonetisation, india news Law Minister Ravi Shankar Prasad claimed that the move to scrap notes was not demonetisation in economic sense. (Source: File Photo)

Law and IT Minister Ravi Shankar Prasad on Saturday said the decision to scrap Rs 500/1000 notes was taken by the government on the recommendation of the Reserve Bank of India. “It is not demonetisation. It is a wrong expression. Our government has only taken decision upon recommendation of Reserve bank of India who is authority to take decisions that notes of Rs 500 and Rs 1000 will not be a legal tender. It is not demonetisation in classical economic sense,” he said.

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Government scrapped acceptance of old Rs 500 and Rs 1000 notes from November 9 onward but allowed their payment for some essential services in limited manner. Listing out steps taken by the NDA government to deal with menace of unaccounted money at an event of PHD Chamber of Commerce and Industry here, Prasad said Prime Minister Narendra Modi created SIT on black money in the very first Cabinet meeting.

The government re-negotiated double taxation treaties with Mauritius and Cyprus, and bankruptcy code was brought in. India also entered into an agreement with the US under FATCA. “Then, provision under Income Tax was made to disclose black money and pay penalty, then voluntary disclosure income scheme was brought, then benami transaction rule was brought in. The decision of putting Rs 500 and Rs 1000 out of legal tender was last of these,” Prasad said.

He said that country’s economy has 12-13 per cent cash component out of which Rs 500 and Rs 1000 account for 86 per cent. “Now this country is moving towards honesty and transparency let it move in that direction. Now it is our duty to bring India out of corruption taint,” Prasad said. The minister further said due to economic reforms government has saved Rs 36,000 crore by digitalising economic activities such as payment of subsidies and MGNREGA wages through direct cash benefit facilities on to the accounts of intended beneficiaries through Aadhaar.

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  1. E
    Nov 26, 2016 at 5:35 pm
    BRT In Delhi was a disaster ( I know it was Congress Mr jaotley ) That was also done by experts in there fields . Basically government of India is rotten and has no idea about anything . They have no knowledge of anything . Bunch of educated illiterates only interested in bribes.
    1. P
      Nov 26, 2016 at 5:24 pm
      If RBI has recommended, then RBI must announce. lt;br/gt;lt;br/gt;Why the FK Modi announced? Elections? And he made it look like, advised by king whisperers.
      1. I
        Nov 26, 2016 at 9:38 pm
        There should be a limit to telling lies. It is known fact that former RBI governor Raghuram was against demonetization and current governor could not have recommended as the govt says decision was taken 6 months back so Urjit Patel could not have;br/gt;Govt shoul be honest
        1. V
          Nov 26, 2016 at 7:40 pm
          Modi Want to Rewards 270 Rich who were donors in BJP's 2014 Election Win by Shifting the burden of their bad loan given as reward by BJP on the shoulders of middle cl and poor of this country while keeping BJP politicians Black Money in Swiss Banks fully safe. Now jumping and clapping like babies that we have ended the Black Money while in fact killed the Aam Aadmi of this country.
          1. A
            Nov 26, 2016 at 7:42 pm
            We will be very surprised if this incompetent Modi Government will last one year they way it is running the country.
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