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.

Watch what else is making news

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.

For all the latest India News, download Indian Express App now

  1. E
    Earthkeeper
    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.
    Reply
    1. P
      Prateik
      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.
      Reply
      1. I
        indeei
        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 recommended.lt;br/gt;Govt shoul be honest
        Reply
        1. V
          Vishy
          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.
          Reply
          1. A
            Amrish
            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.
            Reply
            1. A
              Ashok Kumar
              Nov 26, 2016 at 10:48 pm
              Looking through the scanner Modi who himself does not look clean and honest for his role in Gujarat Macres during his time as CM of Gujarat. Anyone who comes forward to help victims of Gujarat Riots to get Justice for them is immediately demonise by CBI, like we saw in the case of Teesta Setalvad. Modi puppet LG najeeb Jung has not allowed Government in delhi to function even an iota. Modi's Delhi police busy fabricating and framing cases against AAP MLAs while rapist and criminals roaming freely all over Delhi. Modi's Caged parrot CBI going after non BJP state Governments in Himachal pradesh, uttaranchal, puducherry, delhi and other states. People cannot forget what happened to entire Bhansal Family knowing the women and daughter were forced to commit suicide after physical and mental toture mentioned in suicide notes of dead victims. Government agencies being used to destroy all cases against BJP and sanghis in melogaon blast and Vyapam scam. When Modi and BJP themselves are not on the right path how can they put the w country in right direction. If Modi and BJP Government are not clean then who should believe them.
              Reply
              1. D
                Dipanker
                Nov 26, 2016 at 9:28 pm
                Short term benefits: Modi has cut of opposition funding to some extent for upcoming UP, Punjab, Goa and Gujarat Elections. While country sees long Term harm like country returning to 1978 Era when Janata party led by BJP was in power and end up in dister for w country.
                Reply
                1. R
                  Rohit
                  Nov 26, 2016 at 8:18 pm
                  Great decision, welcomed by majority of Indians. Now, PM should take advantage of the situation and call fresh elections.
                  Reply
                  1. D
                    Damodar
                    Nov 26, 2016 at 5:40 pm
                    Because of the uproar against demonetisation, the government is now using RBI as the scape goat. Poor execution of the plan shows government incompetence. For example, why the lower denomination notes were not made available in good number to avoid shortage? Why everyone who earned the money, and paid taxes, has to stand in line? or, the government dictating how much money an individual can withdraw from an account? What is going on?
                    Reply
                    1. H
                      harun
                      Nov 26, 2016 at 7:05 pm
                      FIRST you take credit and the bhakts go Ga Ga over the decision.lt;br/gt;lt;br/gt;But now you understand whats coming and Let it all Go and name the RBI.lt;br/gt;lt;br/gt;So the govt has said it was done by RBI,Hope all are clear.lt;br/gt;lt;br/gt;Now i understand it has dawned on the Govt that even if 15 % of the money in circulation does not come back.lt;br/gt;lt;br/gt;It will help none,as Banks will have Money to lend.lt;br/gt;lt;br/gt;Loans will be disbursed and with economic slow down eminent ,You will have Bad loans and then write off to follow like the 125000 crores done by Govt.lt;br/gt;lt;br/gt;The crisis will come when all that has been deposited is withdrawn,it will as the deposits are due to Order of the Govt and not voluntary.lt;br/gt;lt;br/gt;Banks will have nothing to return and the Govt will impose the Embargo on withdrawal as you have today of 24000/week
                      Reply
                      1. A
                        AMM
                        Nov 26, 2016 at 7:28 pm
                        Means now Urjit Patel will be the scapegoat
                        Reply
                        1. P
                          P.THAPAR
                          Nov 26, 2016 at 7:52 pm
                          WITH SUCH HUGE SAVING MODI GOVT.SHOULD NOW REMEMBER PROMIS MADE AT ELECTION TIME AND GIVE THIS MONEY TO POOR PEOPLE OF THIS COUNTRY.IF THIS HAPPENS EVERY PERSON IN INDIA WILL BE FEELING RICH AND BLESS MODI AT NEXT ELECTION IN 2019.
                          Reply
                          1. J
                            JM
                            Nov 27, 2016 at 12:11 am
                            People of India will bear. Modi or Mrs. Sonia hi doesn't own India. India belong to all Indians. Its Hindusthan not sangisthan.
                            Reply
                            1. M
                              Manu USA
                              Nov 26, 2016 at 4:55 pm
                              Very good decision. Even RBI recommend, but will power matters.
                              Reply
                              1. R
                                Raghu
                                Nov 26, 2016 at 5:55 pm
                                If people believe this ic blabber, then they need brain surgery to revive their dead brain!
                                Reply
                                1. G
                                  Ginlunmang Tungnung
                                  Nov 26, 2016 at 6:48 pm
                                  It's hightime the government gives out all the reasons, facts and details of planning carried out about the entire imbroglio, so that we may be educated and those responsible can get their due bricks or bouquets at the appropriate time. By the way, where is the esteemed Governor of the RBI? Consutionally, isn't he supposed to be the prime mover, architect and executor of the entire operation?
                                  Reply
                                  1. M
                                    Mikka
                                    Nov 26, 2016 at 10:12 pm
                                    Heading from UK News Media: Indian politician builds mansion with bullet-proof bathroom using taxpayer money while targeting common men and women of their country.
                                    Reply
                                    1. M
                                      Milind Patil
                                      Nov 26, 2016 at 6:58 pm
                                      Government is lying here. Previous governor said he would have opposed this move if he was still governor. New governor was appointed 2 months ago. If this was new governor's recommoendation then how modi said this was planned 10 months ago?
                                      Reply
                                      1. M
                                        Moby
                                        Nov 27, 2016 at 11:23 am
                                        There is just one person who speaks and is allowed by himself to do so.lt;br/gt;He'll speak at will on issues he decides at places he wants to.lt;br/gt;I'm yet to see any minister speak to media or go on an official travel apart from that single him.lt;br/gt;BTW, ones that do speak to media are the irrelevant pawns who are clueless and the prominent ones when blame is being ped.
                                        Reply
                                        1. M
                                          muhammedsajiddia
                                          Nov 26, 2016 at 7:38 pm
                                          I told my friends when it was announced , means before 2 weeks , when this project success , all credit will take by governing party , when this project will fail , they will blame RBI and also some more things lt;br/gt; Normally , money currency matters decision or announcement should come from RBI after deciding a panel of RBI team , as similar to FED in USlt;br/gt; Here , only political gain is the main aim , and RBI role is under the govt which is dangerous because governing political party may misuse it lt;br/gt; Now why only checking deals after Nov 8 , check past 6 months deals , then it will clear it is leaked or not , as per news papers it is leaked lt;br/gt; Problem is opposition is weak and governing political party does as they wish anything ( see all incidents for 1 year )
                                          Reply
                                          1. R
                                            Ramesh Nittoor
                                            Nov 26, 2016 at 8:58 pm
                                            It is not clear whether Hon Minister is cleverly ping the buck to RBI Governor to avert political risk since the consutional validity case is in SC, or graciously giving credit where it is due or thoughtfully creating political space for consensus by all parties. The whiter that thou stance of BJP vis-à-vis other parties does not impress the discerning, nor does it help build required all parties consensus for genuine transformation. It is trifle unfair to doubt the intent of the government, but intent remains foggy at present. This fog of dawn so far, is still a pleasant feeling!
                                            Reply
                                            1. Load More Comments