After so much chaos, deaths, inconvenience, job issues and suffered small scale businesses finally government informed Parliament that a decision has been taken to print plastic currency notes and procedure has started for that. It has been decided to print banknotes based on plastic or polymer substrate. Meanwhile, Supreme Court asked the Centre whether its decision to announce demonetisation was taken in absolute secrecy while hearing a bunch of petitions questioning the Narendra Modi government’s rationale behind the implementation of the policy. Chief Justice TS Thakur also asked why the Centre’s order granting limit of Rs. 24,000 per day to a person had not been complied with. Lawyer Prashant Bhushan, who was appearing on behalf of a petitioner, told the court that there was no preparation on part of the government to deal with the impending situation caused by demonetisation.
There has been no cash in ATMs, recalibration was not done well and co-operative banks were being discriminated. The government announced its decision to scrap Rs. 500 and Rs. 1,000 notes, which formed 86 per cent of the cash in circulation, to curb “black money and corruption” on November 8. And after a month of the currency ban, millions are still facing problems as they have to stand in queue for hours outside banks and ATMs to withdraw money or deposit the old currency notes. The opposition and the government have locked horns over the issue of demonetisation during the current winter session. Even though more than three weeks have passed since the winter session began, both houses have failed to conduct any meaningful business as protests over demonetisation continue to disrupt proceedings.
On the other hand, Income Tax officers have in a raid allegedly unearthed 44 fake accounts at a branch of Axis Bank in central Delhi’s Chandni Chowk. Since November 8 about Rs. 100 crore in old notes has been deposited in these accounts. A total 450 crores have been deposited in the branch since the day that the ban was announced. The 44 fake accounts had been created using forged documents and investigators suspect that the money may have been routed to buy gold.
In an another incidence, new currency notes worth Rs. 85 lakh and Rs. 76 lakh were seized from Mumbai and Surat by IT department. Two persons were taken into custody for questioning by the Mumbai Police Crime Branch sleuths after the cash recovery in Dadar’s Hindu Colony. In Surat, four persons are being questioned. IT department recovered at least Rs. 106 crore cash, including Rs. 10 crore in new currency, and 127 kgs of gold bars in searches at multiple locations in Chennai to check instances of tax evasion post demonetisation. In Chennai, it is the largest seizure of new currency notes post demonetisation. 127 kg gold in 1 kg bars and 96 crore in old currency and Rs. 10 crore in Rs. 2,000 notes have been seized by the sleuths after the operation. They said the I-T teams had launched operations on at least eight locations of a “syndicate” involved in currency conversion and recovered this huge amount. The officials said a number of documents related to financial transactions, entries of gold sale and records of sale/purchase have also been seized by the tax sleuths.
The tax department had made the largest seizure of Rs. 5.7 crore cash in new notes in Bengaluru few days back after which two other central probe agencies, the CBI and the Enforcement Directorate, had taken over the cases to probe instances of corruption, money laundering and large-scale hawala transactions. This is the second raid since the notes ban at an Axis Bank branch in Delhi. Last month, tax officers had caught two people with Rs. 3.5 crore in new currency notes as they came out of the Kashmere Gate branch of the bank, also in central Delhi. After the Prime Minister’s sudden announcement abolishing high value currency, the government has allowed people to deposit the outlawed Rs. 500 and Rs. 1000 notes in bank accounts till December 30. It has said that deposits of more than Rs. 2.5 lakh will attract scrutiny by the taxman. The government has also given people possessing old notes in black or untaxed money a last opportunity to deposit this amount in their accounts and pay a 50 per cent tax plus penalty. It warned that if tax officials catch deposits made without them being informed, they will have to pay a much bigger fine.
Sekhar Reddy is a member of the trust that runs the uber-wealthy Tirumala temple in Tirupati, one of the reasons why he has access to top leaders of the government. Last month, he visited Apollo Hospital bearing prasadam from the temple for then Chief Minister J Jayalalithaa. After Ms Jayalalithaa’s death, her trusted lieutenant O Panneerselvam was made Chief Minister. Last year, Panneerselvam was photographed at the Tirupati temple with Sekhar Reddy as his escort.
It is too premature to evaluate the concrete benefits of demonetisation to the state-exchequer and whether the pain of the common man is justified at the end of it. But, even at this stage, it is equally naive to imagine that the note ban will kill illegal cash built up in the system, curb corruption and an end to the organized terror. It is too early to assess the impact of demonetisation on the economy and its last stated objective of pushing the system to a cashless economy. But, one needn’t wait any longer than this to understand whether the currency swapping exercise is good enough to address the issues of black money build-up in the system, corruption and terror funding. Various incidences have already proven that nothing can stop fake currency, terror acts or corruption in India. Ironically, ruling BJP leaders were caught the most with the huge amount of new domination of Rs. 2000 notes.
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