Demonetisation: A Severe Jolt To Money - Hoarders

As the newly appointed RBI Governor Urijit Patel is in the driver’s seat on monetary policy, it follows that the scheme, which was announced not by its Governor but through Prime Minster Modi on 8 November, was the RBI’s brainchild. Of course, this must have been discussed by Patel with officials such as Secretaries Hasmukh Adhia and Shaktikanta Das as well as Principal Secretary to the Prime Minister, Nripendra Mishra, who has been a champion of the 8 November currency swap scheme from the very beginning of its being discussed.

- Vijay Dutt

Indira Gandhi had told her Finance Minister YB Chavan in May 1971 that “the problem of black money can only be tackled through some person who feels very strongly about it.” (Declassified black money files of Prime Minister’s Office, no 37 (465)/71 PMS).

That man turned out to be Narendra Modi in 2016, about 45 years after her remarkable understanding of the psyche of political leaders. On November 8, India was rolling on normally until Prime Minister Modi struck at 8pm and launched a surgical strike against black money, which is called parallel economy, because it’s huge. In fact, Indians boasted that the country’s economy survived the global recession in which economies of developed countries collapsed, because of the parallel economy.

This is not something to be proud of. It is used by the unscrupulous for criminal activities, trafficking, prostitution, smuggling, terror activities and even to topple elected governments. Most expense during elections in India involves black money. Naturally, Modi caused chaos, confusion and panic with the announcement that currency notes of denominations of Rs 500 and Rs 1000 would not be legal tender from the midnight. The opposition party leaders were out raged. They first attacked Modi saying that it was one of the biggest scams, for he informed his big money friends beforehand and then they became messiah of the poor blaming their misery to Modi.

But Modi is like the elephant who keeps moving while dogs bark and try to chase it. In fact, Modi warned of stricter action after December 31. So far, Modi is on firm ground. In fact, if as reported cash will reach all destinations in six days instead of 21 days so far, the long lines at ATMs may shorten or disappear in the next week, then demonetisation will become a lasting legacy of Modi.