RBI – Ministry of Finance:
Finance Minister Arun Jaitley today said government's decision to demonetise the 500 and 1000 rupee notes is good for country's economy which will rid the nation of black money and corruption.
In an exclusive interview with Doordarshan News, Mr. Jaitley said black money is not a fundamental right of the people, and those who have not earned money with honest means are now worried. Explaining the rationale behind the decision, Mr Jaitley said as countries develop, economy should be cashless and transact through cheques and plastic currency.
The Minister said deposits in banks will now increase and banks will have more lending capacity. He said official transactions will increase which will impact indirect and direct taxes in the long run.
Finance minister said the positive impact will be more and more transactions would come to bank.
He said India will become tax compliant society. Mr Jaitley said this is the first time government has taken a decision which has many many advantages. The Minister said move to withdraw 500 and 1000 rupee denominations will help in cleaning up the process of political funding. Mr Jaitley also said replacement of currency will be done in three to four weeks.
- Have spoken only to Four individuals since this morning, one of them works in a Bank, who said:
Quite naturally all eventualities of People’s need cannot be anticipated – BANKS are closed Today, cell calls will come flooding in.
There are bound to be debates, arguments & more likely heated interactions, as by & large non of us want to listen, we interrupt & instead put forth our point forcefully.
Coming weekend is 2nd Saturday, Sunday & Monday follow which are Holidays, thereby Banking Transactions & Economic Activity will have restricted activity.
There is HUGE black Money in circulation & by curbing same inflation comes in check.
Real Estate Developers, Financers, likewise Bullion, Jewelry trade comes to ones mind wherein Cash transactions have become a norm. These activities will be deferred /
The second person said People will do an ABC analysis of needs & buy with lower denominations what is Essential. At Petroleum outlets Police Vans have got into position – 2 & 3 wheelers
buy small lots & are likely to demand change which will shortly run out. Most not keeping Debit / Credit cards.
- The 3rd is Domestic Help who have kept Rs 500 & Rs 1000 notes to take to the Post Office / Bank – collect same & once it is a reasonable amount, take it for transmission back home. Assured them, it will get back to being legal tender.
- A person just walked in & said: It is a great move, kudos, Mess is there in too many areas, this could create a Turmoil.
Below is the only digital reaction so far received which is self explanatory.
Celebrities like Rajinikanth, Amitabh Bachchan, Karan Johar and Anurag Kashyap among others have praised Prime Minister Narendra Modi's decision to abolish Rs 500 and Rs 1000 currency in war against black money.
In his tweet Rajinikanth said hats off to narendramodi ji. Anurag Kashyap, said it is super way to make the black money redundant. Madhur Bhandarkar said this bold move will counter Black Money and strengthen Indian economy. Anushka Sharma tweeted that it is a welcome bold and courageous step towards nation building and each one of us should cooperate in the larger interest of the nation.
Southern superstars Kamal Haasan and Nagarjuna thanked the Prime Minister for rewarding the tax payers. Karan Johar called the step a 'masterstroke while Rishi Kapoor said de monetisation is the right answer.
Actress Bhumi Pednekar, Suniel Shetty and others also tweeted to hail the Prime Minister's decision to scrap Rs 500 and Rs 1000 currency notes. Baba Ramdev said, termination of legal tender of old currency notes will eradicate finance related crime in the country. He praised Prime Minister Narendra Modi to take this major and courageous decision. He said that this decision will bring country in new era of economics.
In Maharashtra, chaos ruled the streets. Petrol pumps, ATM booths, grocery stores and chemist shops saw long queues of excited and confused people trying to do away with their large notes. Police had to be deployed at many petrol pumps and ATMs to control swelling crowds. Chief Minister Devendra Fadnavis welcomed the bold and revolutionary step and urged people not to panic.
Bihar Chief Minister Nitish Kumar appreciated the initiative. He said people will certainly face hardship for a few days, but this move will effective to unearth black money and check fake currency money.
In Tamil Nadu, most of the political parties have welcomed the de-monetization of higher value currencies. Cutting across political spectrum, parties like the DMK, the PMK, the MDMK and the Dravidar Kazhagam, have appreciated it saying it is a bold move that would help in curbing the black money menace.
The decision has evoked mixed response in the Puducherry. Chief Minister V Narayanasamy asked the Government to reconsider the decision. Madhya Pradesh Chief Minister Shivraj Singh Chouhan has lauded the decision. He said that today is Safai Parva. This act of the Prime Minister is in the welfare of the poor, common man, society and in the interest of the nation, he said. Karnataka Chief Minister Siddaramaiah has welcomed the decision of Central Government to curb black money but said that people should have been given some time before making the announcement.
Demonitization of Rs 500.00 & Rs.1000.00 Notes
For getting rid of notes
1. Citizens can deposit money to the bank account through the usual cash depositing process but not huge amount of money straight into account as banks will be under tight surveillance henceforth and every transaction will be done under the camera.
2 . Citizens can also exchange 500 and 1000 rupees in a bank branch with notes of a lower denomination on production of a valid identity proof viz., PAN, AADHAR or Voter ID card for the same, subject to a maximum of Rs. 4000.00. However, how many such transactions can be made by an individual and how frequent such transactions can be made is not clear by the official notification issued.
3. The notification also mentions that the 4000.00 limit will be reviewed in 15 days which indicates that there might be a chance that higher amount of money may be exchanged.
4. Citizens will still be able to exchange notes of 500 and 1000 in Government Hospitals, Govt. Pharmacies and Govt. Petrol Pumps until 11th of November.
5. Citizens can also deposit money to another account provided there are valid reasons for the same. There will be no limit on such transactions.
For getting cash
1. Withdrawal to the extent of Rs. 10000 are allowed from Bank branches until 24th November.
2. The withdrawn money will be in the form of notes of lower denomination. In a week, the maximum amount withdrawn from the bank account will be Rs. 20000.
3. The ATM will be out of operation for the next couple of days. They will be filled with appropriate notes in two days and will resume operation from Friday, November 11th.
4. The withdrawal limit will be Rs. 2000 until 18th November and will be raised to Rs. 4000 from 19th November.
Obviously this is a political move. As a master stroke an attempt has been made to regain the popularity that Mr. Modi has lost over last two years and the BJP regime being criticised and sometime being equated to Nazi Germany, this was opportune moment dot right on time, over-sped at the cost of causing great inconvenience to the citizens.
If BJP is able to wins UP election, it will get a adequate number of seats in Rajya Sabha. Once it is in majority in Rajya Sabha as well, you can easily fathom the unilateral decisions that can be taken by ignoring divergent opinions which are contradictory to the government’s stance.
News are pouring in from the entire country as to how businesses and shops have stopped accepting 500 and 1000 rupees notes. This will create a great havoc tomorrow. What will happen to a villager in emergency who can not got to a government hospital and do not have access to facilities for exchange?
The banks would be over-crowded on the next working day i.e. 11th November without ruling out the possibility of some major clashes in different parts of the country. When it comes to money, people tend to loose their temper.
The information in public domain is inadequate and people not understanding the move clearly, there is a possibility of people getting panicked and making wrong move within time. The efficacy of the scheme would depend on the government mechanism in place.
Previously, similar measures were taken post independence of India. In January 1946, currency notes of 1000 and 10000 were withdrawn and new notes of 1000, 5000 and 10000 were reintroduced in 1954. The Janata Party coalition government had again demonetized notes of 1000, 5000 and 10000 on 16 January 1978 as a means to curb forgery and black money, still the demon of black money came back with vengeance.