Shame on RBI which 'recommended' demonetisation: Chidambaram

RBI says got back almost all of banned currency notes

"Reality-RBI data released today proves only Rs 16000Cr out of the 15.44 Lakh Cr money in circulation came back".

When asked about the government's demonetization, the former RBI governor Raghuram Rajan had said: "My sense is the clever find ways around it". "When note ban was announced, it promised two things".

Narendra Modi had also claimed that the note ban will curb the terror funding and will break the backbone of terrorism and Naxalism.

"The Prime Minister and Finance Minister should answer this, else this would be the biggest corruption in Indian history", he added.

Jaitley questioned the knowledge on black money and its relation with the demonetised currency adding that the demonetisation's objective was also to create a digital economy and India was moving in the right direction.

Modi said that in November, notes of 500 and 1,000 rupees had been declared invalid, thereby bringing black money back into the economy in large quantities.

The amusing thing is that there were no estimates of how much black money was held in the form of cash.

Das was reported to have also said that once the final counting is done, he expects the figure to be much lower. The economist behind the demonitisation move deserves nobel prize.

Another stated aim of the demonetisation drive was to increase the tax base. The report revealed that 98.96 percent - or Rs 15.28 lakh crore out of the Rs 15.44 lakh crore - invalid currency notes had come back into the banking system by the end of June 2017.

Expectedly, such notes have effectively been held back from depositing with banks or even destroyed during the remonetisation exercise or are still being held by criminals and anti-socials hoping to recirculate these through some channels some day. To which Chidambaram quoted a number saying: "In November 2016, electronic payment was Rs 94 lakh crore, in May 2017 (after six months of note ban) it has come back to Rs 94,21000 crore. The Reserve Bank figures yesterday exposed the falsehood propagated by the government", he said. People holding these notes had to deposit them in their bank accounts. In his address, Modi had said, in the last three years, more than Rs. 125,000 crore black money has been caught. Expenditure on currency printing increased to Rs 7,965 crore in 2016-17 as against Rs 3,420 crore in 2015-16. "The fallout of demonetisation is on predicted lines... the fact that money got deposited in banks doesn't make it legitimate money", Jaitley claimed.

The RBI annual report said that "subject to future corrections based on verification process when completed, " the estimated value of the banned notes it "received" was Rs15,28,000 crore.

Experts warned the government repeatedly that most of the black money was held not in cash, but in real estate, gold and securities.

"The upsurge in expenditure during the year was on account of change in the production plan of printing presses due to the introduction of new design notes", the central bank said in its annual report.

We can not be certain if indeed the note-ban troubled the black money riches against whom it was devised, but we know for sure that common people went through hell (sometimes, even death) and may still fall victim to the risk of "inspector raj" as government will try to push up its tax collections by all means.

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