Buzz in govt: ‘Demonetisation not just economic reform, but a transformation’

“In one stroke, the nuisance of fake currency notes, being pumped in by Pakistan over the last two decades, has been struck," says a senior source in govt.

Written by Sheela Bhatt | New Delhi | Updated: November 13, 2016 1:12 am
demonetisation, Rs 500 note, Rs 1000 note, Rs 2000 note, demonetisation process, ATMs, narendra modi, indian express, india news Photo for representational purpose.

Despite the long queues at ATMs and the rising tempers, the government’s internal assessment is that the “economic gamble” that it took by invalidating currency notes of  Rs 500 and Rs 1,000 will pay off.

“In one stroke, the nuisance of fake currency notes, being pumped in by Pakistan over the last two decades, has been struck — at least for two to three years or until they come up with some new tricks,” said a senior source in the government, when asked about the gains from the exercise.

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The source claimed that the operation will yield other benefits. “The value of the Indian rupee will go up as a result of this exercise. And, the most important advantage is that the RBI will be able to print more notes to fund development projects without having to worry about fiscal inflation,” he said.

When asked about the primary aim of the exercise, the source said, “India is country of 120 crore plus people. We must have a mega budget to match people’s aspirations. Currently, our budget from all sources is only around Rs 4.5 lakh crore. That’s not enough to build up our military strength, bridges, hospitals, schools and space stations. We need big budgets for big projects. At the end of this exercise, we will get more money to fund such projects.”

Sources said the government had been keeping a “tight watch” on banking transactions and when business in banks across the country crossed the Rs 60,000-crore-mark, there was a “sigh of relief”. “This is not just economic reform. This is transformation…parivartan hai, sirf sudhaar nahi,” said a source.

The sources said there was a lot of planning that went into the operations. The initial plan, they said, was to demonetise the Rs 500 and Rs 1,000 notes in February 2016, around the time of the Union Budget, but the move had to be deferred because the arrangement to print new notes of Rs 500 and Rs 2,000 could not be put in place by then.

They claim that Prime Minister Narendra Modi, however, was never in doubt about the operation that finally got off the ground on November 8, with Nripendra Misra, Principal Secretary to the PM, and RBI Deputy Governor R Gandhi, playing key roles.

When the design for the new Rs 500 and Rs 2,000 notes was being debated, there was consensus about using a picture of the Red Fort on the notes. A source in the government explained, “The Indian tricolour flying over Red Fort symbolises the nation’s strength and power. It’s part of Indian history.’

Sources said a special agreement has been signed with the manufacturer and supplier of the ink and paper for the notes. The note includes a clause that disallows them to supply the same ink and paper to Pakistan.

 

 

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  1. V
    Vijay
    Nov 13, 2016 at 3:13 am
    So poor in thoiughts" aggreement stating same pAper not to supplied to " do u want me to believe that the same kind of paper cant be manufactured in this world when lot of other things can be made. Common dont take all to be fools.
    Reply
    1. S
      saran
      Nov 13, 2016 at 6:08 am
      Big deposits before demonetization should be investigated.lt;br/gt;even after 5 days no 500 notes in bank.lt;br/gt;why 2k note, nobody is taking them at small retail shops, for big amount I will use card.lt;br/gt;Why extra charges on online payment, they should be incentivise.lt;br/gt;why flow of 500 and 1000 notes in systems was not reduced.
      Reply
      1. D
        Darby
        Nov 13, 2016 at 2:41 am
        No parivartan can justify the death of people. You know a policy against black money is not so good, when people like Amitabh Bachchan (with money in Panama accounts) welcome it and poor, innocent babies die because of the move.
        Reply
        1. H
          Harry
          Nov 13, 2016 at 8:30 am
          stan is a gutter country. A country which thinks terror is its biggest export is sure to go bust in time.
          Reply
          1. J
            jagats
            Nov 13, 2016 at 2:13 pm
            Surprised to hear important people demanding roll-back of demonetisation. Demand for roll-back of demonetisation and more concessions should not be met. However, the shortage of money (new notes and smaller denominations) in circulation should be quickly overcome, to sufficient levels.
            Reply
            1. S
              Salim Khan
              Nov 13, 2016 at 10:22 am
              Give back stan in the same coin. Flood that country with counterfeit notes. Don't do surgical strikes on common man
              Reply
              1. B
                B
                Nov 13, 2016 at 3:34 am
                It is a fact that paper and ink can be made to a formula. Only fools who don't know this will complain.
                Reply
              2. S
                s s nair
                Nov 13, 2016 at 7:18 am
                It is a political ber.
                Reply
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