Rs 500, Rs 1000 banned; Rs 2000 to come: Did we miss these Twitter, RBI hints? - Firstpost
Firstpost

Rs 500, Rs 1000 banned; Rs 2000 to come: Did we miss these Twitter, RBI hints?

#Black money   #currency notes banned   #NewsTracker   #RBI   #Rs 1000   #Rs 500   #Twitter  


A great aspect of prime minister Narendra Modi's announcement of demonetisation of Rs 500 and Rs 1,000 currency notes is that it was kept a secret. Nobody in the media knew about this.

This is one of the congratulatory remarks on the social media after the earth-shattering announcement made at 8 pm on 8 November 2016.

But did we fail to read correctly a few developments - or rumours rather - in the recent days or weeks that indicated something of this sort may be coming?

There are reasons to believe it may be so.

Reuters

Reuters

Before getting into the details, it is worth remembering the black money warnings issued by PM Modi a few days back.

"We have made requisite legal changes so that the black money circulating inside the country can also be curbed. There's a scheme which is running till the 30th of September. For all those who are still willing to come in the mainstream. I have said this in public that 30th of September is your last date. You may have made mistakes with whatever intentions. Whether it has been done willingly or unwillingly, here is your chance. Come into the mainstream. I have this plan for people to sleep peacefully at night. People must accept this. And no one should blame me if I take tough decisions after the 30th. This money belongs to the country's poor. No one has the right to loot this. This is my commitment. I am working with full force and will continue the effort," Modi had said this in an interview to Network18 on 2 September.

Before that on 24 July, Modi had issued an ultimatum. He had warned black money holders of stringent action including imprisonment after 30 September. At a function jewellers organised to felicitate him in New Delhi, Modi had said said those with undisclosed wealth, most of which is parked in jewellery and real estate, should come clean to sleep peacefully.

He said he is aware of people going to bullion merchants with "cartload" of money and a message has to be delivered to them to come clean using the one-time compliance window closing on 30 September.

The government had devised an Income Declaration Scheme (IDS), which opened on 1 June and clsoed on 30 September. Under the scheme, black money holders could come clean by declaring the assets, paying the tax and penalty of 45 percent thereafter. what the PM said was that those who fail to take advantage of the scheme will have to face stringent actions, including imprisonment.

As per the government, the scheme yielded Rs 65,250 crore worth black money from 64,275 declarations. Of this, about Rs 30,000 crore will flow into the government’s tax kitty based on 45 percent tax penalty. "The figure is a clear relief to the Modi-government, which has been facing questions on its poll promises on the black money," Firstpost financial editor Dinesh Unnikrishnan had said.

Had PM Modi's warnings taken seriously, it would not have been difficult to see something of this sort coming.

But more importantly, here are the reasons for the nagging doubt that there could have been somebody who knew about the impending announcement:

strong>RBI dropped hints?

Nearly a week back, the Reserve Bank of India announce that it was conducting a pilot under which 10 percent of ATMs in the country will be calibrated to dispense Rs 100 notes exclusively. "In keeping with the objectives of the Clean Note Policy and to ensure genuine requirements of members of the public for Rs 100 denomination banknotes are met, the banks should increase dispensation of Rs 100 banknotes through ATMs which are widely used for distribution of banknotes for retail use," the central bank said in a notification.

Was that an attempt to cushion the sudden surge in demand for Rs 100 notes after the government announces this move? This indeed could be a safe specualtion.

Twitter buzz on Rs 2000 notes a hint?

In the digital era, there is nothing that you can hide for long.

Just two days back, Twitter was abuzz with new Rs 2,000 notes that are likely to come into circulation in the near future.

Interestingly, the design and colour of the original (image released by the RBI on 8 November after the announcement by the PM; see here) seem to be somewhat similar to those that were circulated on the Twitter two days back.

Clearly, somebody knew something of this sort was brewing. Or rather, how far is it true that this was indeed a unexpected surgical strike?

First Published On : Nov 9, 2016 09:37 IST

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