India has demonetised high-value currency before, in 1978

Even then the move was aimed tackling the issue of the black money economy which was quite substantial at that point of time.

By: Express Web Desk | New Delhi | Updated: November 8, 2016 11:36 pm
Rs 10,000 note that was discontinued in 1978. Rs 10,000 note that was discontinued in 1978.

While Prime Minister Narendra Modi might have taken India by surprise, the move to demonetise high denomination notes in not unprecedented in Indian history. In January 1978, the Indian government had demonetised that Rs 1,000, Rs 5,000 and Rs 10,000 notes in a bid to counter black money in the economy.

Even then the move was aimed tackling the issue of the black money economy which was quite substantial at that point of time. The move was enacted under the High Denomination Bank Note (Demonetisation) Act, 1978. It was termed as “an Act to provide in the public interest for the demonetisation of certain high denomination bank notes and for matters connected therewith or incidental thereto.”

Under the law all “high denomination bank notes” ceased to be legal tender after January 16, 1978. There was a prohibition of transfer and receipt of high denomination bank notes. Plus, all banks and government treasuries had to send to the Reserve Bank the total value of high denomination bank notes held by it at the close of business on the January 16.

People who possessed these notes were given till January 24 the same year — a week’s time — to exchange any high denomination bank notes. The one big difference with the announcement Tuesday is that Rs 1,000 and higher value notes were almost impossible to possess then for the common man given the value of these amounts then.

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  1. S
    Srikant kr
    Nov 9, 2016 at 6:11 am
    Excellent.
    Reply
  2. A
    aftab
    Nov 15, 2016 at 12:16 pm
    Good concept,good move,but very bad methodology bad execution.suffering only common man who don't have black money.i agreed it is good decision but who know after corruption will stop in govt offices.
    Reply
  3. D
    dhanalakshmi
    Dec 30, 2016 at 3:46 am
    i am so happy
    Reply
  4. N
    Nishant Kishore
    Nov 9, 2016 at 3:55 am
    I would stop short of drawing comparision but the move does not seem to have a foresight. I would call it for what it is. A show of decisiveness, which appears bold and positive after all those Manmohan years. A word of caution though, Modi's penchant for symbolism and ball display may cost us someday. For now 10 points to him, for doing something!
    Reply
  5. R
    Raj Saksena
    Nov 10, 2016 at 12:15 pm
    If the motive is to eradicate black money and shadow economy, why introduce 2000 rupee note??? I'm cluelesslt;br/gt;This would mean in another 50 years, government will need to demonetise again (keeping busy :) )
    Reply
  6. C
    Cristoval Jes%c3%bas
    Nov 10, 2016 at 11:01 am
    No. 1978 was not a dark time in India. But 2016 is.
    Reply
  7. S
    Sanchayan Sarkar
    Nov 9, 2016 at 7:25 am
    1978 IS different from 2016 . We have a digital infrastructure now , free market economy and a lot of transparency . 1978 were dark times.
    Reply
  8. S
    sanjay pandey
    Nov 10, 2016 at 11:19 am
    i should have guts to take this type of bold decision.. this type of move was is pipeline for say about last 8-10 yrs. but the congress govt. failed to implement.. like the pokhran test which was taken by sri atal bihari vajpayee.. the decision was there... but no one dare to bell the cat. i would like to give a big salute to mr. narendra modi.
    Reply
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