Demonetisation will destroy black money stashed over 70 years, Centre tells supreme court
In a very subtle manner the Modi government has told the supreme court that black money was allowed to be accumulated in the country and the demonetisation move will unearth such stashed money.
With the supreme court questioning government’s real intent of the government to fight black money and corruption a day earlier, the Centre on Thursday told it that demonetisation was one such step to that end.
The government submitted an affidavit in the apex court saying that the demonetisation of high value currency notes would “unearth black money stashed over seven decades in the country”.
On Wednesday, the supreme court had asked the government that if it was serious to combat corruption and black money, why it did not appoint a Lokpal.
OBJECTIVES OF DEMONETISATION
In its affidavit, the government listed out the reasons for implementing demonetisation of 86 per cent of currency in circulation prior to the decision.
Demonetisation is an attempt to unearth black money, which have been accumulated in the country in the past seven decades.
It is a step to reduce the ratio of cash transactions in the country. Global average for cash transaction ratio to GDP is 4 per cent while in India, it stands at 12 per cent, the government told the court.
Demonetisation will unearth illegal parallel economy running in the country.
It is an attempt to make fake currency notes useless.
Demonetisation will check funding of terror groups in the country. The Modi government also claimed that terror funding has stopped since demonetisation.
‘WE ARE FIGHTING BLACK MONEY’
In its response, the government also informed the court about the steps taken to fight corruption. It said, “We constituted SIT to curb black money and also amended the Benami Properties Act.”
People might have had to face some inconveniences due to demonetisation but recalibration of ATMs is in full swing and situation will improve soon, the government told the apex court.
The Centre also said that the government was well within its right to demonetise currency notes by withdrawing the legal tender status as well as giving exemptions for certain services under the RBI Act 26.
The demonetisation situation is being closely monitored on daily basis and relaxations and relief measures are being taken accordingly, the government said in its affidavit. The farmers have been allowed to buy seeds from stipulated government stores, it said.
The supreme court will hear a bunch of petitions against demonetisation on Friday.