EditorialQuestions that still haunt the Demonetization outcome!

Questions that still haunt the Demonetization outcome!

Date:

On November 8, the sixth anniversary of demonetisation, the Indian is still plagued by black
money, fake notes, and the cash economy to an even greater extent than they were before
demonetisation.
On television and radio, it was announced that all notes of Rs. 500 and Rs. 1000 would become
invalid at the stroke of midnight. It had a terrible effect on both the economy and way of life in . In
addition, hundreds of people perished while waiting in lines to withdraw their own money.
The three stated economic goals were to eliminate black money, eradicate counterfeit money, and
establish a cashless society. Demonetization, however, utterly failed to achieve any of the three goals.
According to Reserve Bank of India data, nearly all banknotes (over 99%) were returned to the banking
system. In contrast to the invalidated amount of Rs. 15.71 lakh crore, the banking system received Rs.
15.31 lakh crore.
Contrarily, the rise in black money persisted, albeit no official estimate has been made public, so no one
knows exactly how much.
The government had stated that the demonetization initiative will wash out any counterfeit notes
currently in use. However, the most recent RBI annual report for this year shows that during the fiscal
year 2021–22, which ended on March 31, 2022, the amount of counterfeit Indian currency notes
climbed by 10.7%. It was discovered that the number of fraudulent Rs. 500 notes had increased by
101.93 percent. It was revealed that there has been a surge of counterfeit Rs 2000 notes of more than
54%.
Additionally, in 2021–2022 there was an increase in counterfeit notes of Rs 10 and Rs 20, respectively, of
16.45 and 16.48 percent. Fake Rs. 200 notes increased by 11.7%. The data revealed a decrease in
counterfeit notes in the denominations of Rs 50 and Rs 100 of 28.65 and 16.71 percent, respectively. 6.9
percent of those were found at the RBI, and the remaining 93.1 percent were found at other banks.
It is important to remember that government authorities had 6.32 lakh counterfeit notes in their
possession when demonetisation was announced in 2016. However, according to RBI data, all
denominations of counterfeit notes totaling 18.87 lakh were seized in the country during the course of
the following four years.
There is no denying that the number of digital transactions has significantly increased. In October 2022,
UPI transactions reached a record high of Rs. 12.11 lakh crore. However, cash transactions continue to
predominate, and the amount of currency in circulation has dramatically increased from immediately
before demonetisation to Rs 30.88 lakh crore in October 2022. It indicates that the amount of cash in
use today is 71.84 percent more than it was right before the announcement of demonetisation in 2016.
The Supreme Court of India is currently hearing 58 petitions challenging the demonetisation order,
although it has rejected the AG and SG's claim that the matter is now academic after six years of
implementation.

The court requested that Centre and the RBI submit a thorough affidavit in response to the petitioners'
arguments after hearing their arguments, particularly their claim that Section 26 (2) of the RBI Act does
not permit the Union to totally invalidate currency notes of specific denominations. The petitioners
stated that this clause only gives the Center authority to revoke currency notes from a certain series, not
all of them.
Prior to the announcement of the demonetisation, the bench stated on October 12 that it wanted to see
the records pertaining to the RBI Board meetings. The SC had stated that although the matter may not
have become academic, it still has a responsibility to respond to the questions the Constitution Bench
assigned to it and that it must do so "one way or the other for posterity."

Northlines
Northlines
The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

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