DISCUSSION HOUR: DEMONETIZATION

The demonetisation of ₹500 and ₹1000 banknotes was a step taken by the Government of India on 8 November 2016, ceasing the usage of all ₹500 and ₹1000 banknotes of the Mahatma Gandhi Series as a form of legal tender in India from 9 November 2016.[1]

The announcement was made by the Prime Minister of India Narendra Modi in an unscheduled live televised address to the nation at 20:15 Indian Standard Time (IST) the same day. In the announcement, Modi declared use of all ₹500 and ₹1000 banknotes of the Mahatma Gandhi Series as invalid from midnight of the same day and announced the issuance of new ₹500 and ₹2000banknotes of the Mahatma Gandhi New Series in exchange for the old banknotes.

The banknote denominations of ₹100, ₹50, ₹20, ₹10 and ₹5 of the Mahatma Gandhi Series continued to remain as legal tender and were unaffected by the policy. The demonetisation was done in an effort to stop counterfeiting of the current banknotes allegedly used for funding terrorism, as well as a crack down on black money in the country. The move is also aimed at reducing corruption, drug menace and smuggling.

 

 

BEGINNING WITH THE DISCUSSION HOUR.. TIME- 1 HOUR..

NO USE OF ABUSIVE OR OFFENSIVE LANGUAGE..  

litson.stephen

47 Comments

  • Joy Banerjee November 24, 2016 at 2:54 pm

    I believe it is a major and one of the most remarkable step taken, which has subsequently made a change, for the time being people will find some prob, but at the end of the day if we as a Lawyer have to see, it will be better for all.
    The probable consequences of this decision can be on to the various economic variables and entities as to noted as the Online Transactions and alternative modes of payment, Banks, GDP and directly to economy.

    But a change its a gud move.

  • gayatri bala November 24, 2016 at 3:08 pm

    I agree that DEMONETIZATION is doing good in curbing the black money. At least not more but a few there have been developments, but still.the government has not found ways to. clear the mess created by it. It is still in a way of the common man. Like for example for the change of a 2000rupee note, a man has go struggle a lot to get it.the rules that the government has created for ppl in marriage functions is absurd. Like the bride n the groom have to first show that they r really getting g married n the then they would be given money.i find this a little weird. But still I’m with the desicion

    • Joy Banerjee November 24, 2016 at 3:28 pm

      yaa true, i accept but then tooo the positive thought behind ths step is really benificial..

  • litson.stephen November 24, 2016 at 3:12 pm

    I believe the demonitisation policy is good but it lacks a framework.. Rules change every now and then.. The move lacked proper planning.. It caused much problem to general public and would cause it in future as well..

    • ritima singh November 24, 2016 at 3:20 pm

      indeed, but dont you thin these change in rules is nothing but a convenient key to the daily struggle. and if we go by the utilitarian logic, the harm caused is way too less then the benefit this country would get.
      certainly the government did not ponder much about all the sections of the society, like daily wage earners, poor segment.

    • Joy Banerjee November 24, 2016 at 3:30 pm

      ya but ths ws taken as a step jst to start for the change and slowdown the process going for the blackmoney.

      • litson.stephen November 24, 2016 at 3:37 pm

        Joy, the fact is the people who were travelling in trains and buses that day could not even buy food.. I know this because even my mom dad were in train that day.. The vendors were not accepting old notes.. These problems happened..

        • Ritima Singh November 24, 2016 at 3:46 pm

          you cannot blame the policy! the notes were acceptable on that very day! and its a crime if one is not accepting a legal tender.

          • litson.stephen November 24, 2016 at 3:50 pm

            Ritima some train journey are long.. 2-3 days.. so if i boarded the train on 8th, I may be in train till 9th or 10th.. What should they do???

            Even the station officials didn’t change the notes saying that they don’t have change.. Even petrol pumps states the same reason..

            I still say- A great move but lacked planning

  • Rajat Godha November 24, 2016 at 3:12 pm

    We might see an extraordinary effect of this move of the Central Govt on Indian Society and Economy. The main effect might be that individuals will have bring down consumption control. With that they won’t have the capacity to buy lavish things. With the fake cash destroyed, Indian economy will see a big boom and the so far booming real estate sector might fall on the ground.It will abridge the crevice between those the haves and the have nots. and the less wealthy. In any case, there might be a few troubles for two or three months. In any case, this bother might be temporary and for short-term.

  • ritima singh November 24, 2016 at 3:14 pm

    Joy Banerjee, indeed its a good move by the central government , and as a lawyer i dont find any legal flaws in the step taken by PM, as it meets Section 26(2) of RBI act. and as section 24 clearly bestows power in the central gov. to take any such step. but viewing this scenario after wearing economist glass, i feel the step is not much pondered step.
    A) what about the down trodden or third tyre section of our society? daily wage earners?
    B) what about the the already doomed real estate sector?
    C) what about those people who have to meet urgent attending like marriages?

  • gayatri bala November 24, 2016 at 3:15 pm

    I agree that DEMONETIZATION is doing good in curbing the black money. At least not more but a few there have been developments, but still.the government has not found ways to. clear the mess created by it. It is still in a way of the common man. Like for example for the change of a 2000rupee note, a man has go struggle a lot to get it.the rules that the government has created for ppl in marriage functions is absurd. Like the bride n the groom have to first show that they r really getting g married n the then they would be given money.i find this a little weird. But still I’m with the desicion

  • litson.stephen November 24, 2016 at 3:16 pm

    FORMER PM MANMOHAN SINGH RIGHTLY STATED TODAY-

    “THE WAY IT HAS BEEN IMPLEMENTED IS THE MONUMENTAL MANAGEMENT FAILURE. AND, IN FACT, IT IS A CASE OF ORGANISED LOOT AND LEGALISED BLUNDER BY THE GOVERNMENT.”

    • Shubhankar Vajpeyi November 24, 2016 at 3:53 pm

      When Manmohan Singh speaks, which he seldom does, it is worth listening. But his speech in Rajya Sabha on Thursday on the demonetisation issue was a let-down. Not because he is known for great speeches, but because what he said made only partial sense.
      If his purpose was to highlight the government’s failure in handling the fallout of demonetisation, that is par for the course. It is possible to accept his criticism (with some qualifications) that there has been “monumental mismanagement” of the process of demonetisation. The persistent queues before some bank counters seems to justify his hyperbole, if nothing else.
      So far, so good. But after calling on the Prime Minister to “find practical, pragmatic ways and means to provide relief to the suffering people of this country”, he goes overboard by calling demonetisation “organised loot and legalised plunder.”
      This is bunkum, and pure politics. If there was “organised loot and legalised plunder”, that happened right under Manmohan Singh’s nose, with the 2G, Coalgate and Commonwealth Games scams being exactly that. The former PM was directly linked to those instances of “organised loot” since A Raja pulled off the scam by forcing Singh to look the other way, and Coalgate happened in a ministry Singh was himself in charge of for a while.
      Another point he made was that demonetisation would reduce the GDP by two percentage points, but we won’t know if this is right till the year is over. But the best estimates of professional forecasters are far below what Manmohan Singh’s crystal-ball has indicated. Goldman Sachs sees a 1.1 percent fall, Care Ratings 0.5-0.3 percent, Emkay Global 0.9 percent, Icra 0.4 percent, and ICICI Securities by 0.4 percent. Barring Ambit Capital, which adopted a faulty methodology to come up with an unbelievable GDP drop of 3.3 percent from earlier estimates, not one projection comes anywhere near what Manmohan Singh’s claims.
      The third point Singh made was that demonetisation would “erode our people’s confidence in the currency system and in the banking system.” For good measure, he added: “I would like to know from the prime minister the names of any countries he may think of where people have deposited their money in the banks but they are not allowed to withdraw their money. This alone, I think, is enough to condemn what has been done in the name of (demonetisation…”.
      Whether demonetisation and the replacement of old notes with new ones are enough to damage confidence in the banking system is questionable. One would have thought that prolonged inflationary policies through unabated money printing – which was what happened during UPA 2, when the fiscal deficit crossed 6 percent – would have done more to debase the currency than a demonetisation to replace currency notes. And just to refresh his memory, the first major bank scam happened during his watch in 1992, when Harshad Mehta actually looted bank cash to make hay in the stock markets. And as for restrictions on people drawing their own cash, any banking system can – at times – place such restrictions. Banks even now place restrictions on daily cash withdrawals from ATMs. When banks fail, then too restrictions happen.
      Singh also seems to have forgotten the Indira Gandhi emergency, when the government froze a big chunk of citizens’ earnings in compulsory deposits in order to contain inflation. If that did not bother Singh, one wonders why the orderly withdrawal of deposits is a great curtailment of citizens’ rights.
      While Singh is right to say that such restrictions do not happen except at times of crises or bank failures, surely temporary restrictions at a time of policy change can be justified?
      Perhaps the best point Singh made was the one where he pointed out that while 50 days to restore normalcy is reasonable, for the poor 50 days of financial denial could be “torture”. For good effect, he quoted Keynes to say that in the long run, we are all dead. So the short-term does matter – at least in politics.
      The former prime minister had some good lines to offer in a polemical sense, but one doubts if this was a former Reserve Bank Governor and finance minister talking. He did not make the kind of heavy-duty points that one expected from him. He delivered some below-the-belt punches without realising his own midriff is vulnerable.

  • Ritika sahni November 24, 2016 at 3:18 pm

    This will have no big effect because people don’t store black money in cash and hold it either abroad or in the form of gold and real estate.

  • Parsh November 24, 2016 at 3:19 pm

    As India’s poor pay the heaviest price for Prime Minister Narendra Modi’s bold demonetization move, many warn the current pain could eclipse long-term benefits and hurt the ruling Bharatiya Janata Party (BJP).

  • gayatri bala November 24, 2016 at 3:19 pm

    The most important thing that people often forget is that or is an agrarian economy. The news today shows that the seeds that were give to be sold in October are still not done the main reason they don’t accept 500 and 1000 denominations. That’s still for private sector. The government has promised that they would be accepted in government shops. The reality is that they don’t exist In the required number

  • Shubhankar Vajpeyi November 24, 2016 at 3:19 pm

    Your old house is undergoing a refurbishment and as a part of it you need to vacate your room and sleep on floor for few days. Does that cause you inconvenience? Will you accept it or say that my brothers room is still safe so why me!! you know his turn will come soon too..

    The panic, chaos, inconvenience and discomfort is a temporary phase..The intention behind this move is clearly to curb black money which is the source for terrorists, goons, mafia, politicians and many other anti social elements. This is like any other emergency situation and we have to deal with it for our own benefit.

    Note ban(an attempt to cleanse the system) had to be done one day if not today. No leader could have been able to do it better than the current Prime Minister, Mr. Modi.
    This had to be done this way to maintain high secrecy. Though some people allege that big heads already knew, this is utter rubbish with no proof. Even if it is true to an extent, that should not be our worry. We should get out of this bad habit of thinking about others first and ourselves later. If you had paid taxes right, your money is safe.
    Stop worrying about people who escaped. Every ones turn is to come one day.
    This is not done all of a sudden. As step 1, govt urged people to create bank accounts under jan dhan yojna. People who created then are benefited now and they know how. As step 2, govt initiated an income tax declaration scheme where everyone is asked to declare their properties. People ignored. Now the third step is mind blowing and overwhelming is to ban the existing big notes overnight.
    It is common man who should be happier. Deaths, suicides cannot be directly related to this. Your intellect should act and not emotion. Common man is suffering. But how long will the common man hide behind the mask of innocence and ignorance and escape with no responsibility? Let us be alert and take self care in this situation of emergency.
    Hospitals have not accepted notes. Is this the flaw of hospital or the new rule? It was clearly stated that hospitals should accepts them.

    So i suggest not to relate everything with note ban and have some patience.. let’s join hands together for making india a better country.

    • Ritima Singh November 24, 2016 at 3:40 pm

      I second you, the problem with this nation is, first they would cry that the leaders are looting the nation, they expect that they should have an arm chair approach to everything, let the leaders work their ass off to build the nation. i believe if we have to undergo some deviance in our routine schedule, we should not mind this deviance, for it will help the county build in longer run!
      The unaccounted money will pool in the banks and other gov organisations, this would bring money to the government which they would utilize in public expenditure activities. there are plastic notes to help in buying daily livings. the trodden section of the society would face some problem, but this problem is any day better than one created by indira gandhi regime. being a member of this society i have quite an idea about the palpitations in elite class, also keeping in mind the past steps taken by modi and now this demonetization, i believe this government surely has some plans to net those people who have unaccounted wealth in other forms other than cash. looking forward for a better India, for something is any day better than nothing!

  • litson.stephen November 24, 2016 at 3:20 pm

    “THOSE WHO SAY DEMONETISATION IS GOOD IN THE LONG RUN SHOULD RECALL THE QUOTE: ‘IN THE LONG RUN WE ARE ALL DEAD’.”

    • Joy Banerjee November 24, 2016 at 3:32 pm

      but in the long run a person get max experience and better knowledge of the circumstances

      • litson.stephen November 24, 2016 at 3:39 pm

        What experience do I get after I am dead..

        • Ritima Singh November 24, 2016 at 3:41 pm

          all deaths should’nt be related to this note ban! we need to filter news coming now and then based on our understanding!

        • Joy Banerjee November 24, 2016 at 3:43 pm

          i m talking of the point to be patient n calm for any point yet taken.

  • Divya Sadhwani November 24, 2016 at 3:25 pm

    I think the step taken by our PM is a good move for the whole nation.By this step there are many problems in our country that can be curbed out.The problem of black money can be solved by demonetization …There are various other problems that can also be curbed by having the proper implementation of demonetization.Our PM is making various efforts so that domestication can be implemented in a good manner..All of us will have some problem or the other by this step bit at the end this will bring out a great nation..So personally I think this is a great move and all the Indians will have a bright future ahead..

  • litson.stephen November 24, 2016 at 3:25 pm

    Those who are talking about benefits, see the facts:

    The GDP of the country will decline by about 2 per cent by what has been done. And this is an underestimate and not an overestimate

  • Parsh November 24, 2016 at 3:31 pm

    The November 8 ban on currency notes has sent India’s economy out of control, as citizens struggle to get their hands on new bills, hindered by a limited stock of freshly-printed notes, daily account withdrawal restrictions, long queues at banks and empty ATM machines. With farmers unable to buy seeds and roadside shopkeepers unable to sell produce, the low-income population has emerged as the biggest losers from the milestone policy designed to stamp out so-called black money.

  • Joy Banerjee November 24, 2016 at 3:36 pm

    it will help in some of the major grounds as to noted as-
    -Fake currency- It will remove the fake currency used by terrorist and other organizations to use Indians for their benefits. Funding for arms, smuggling, and terrorism will take a blow.
    -Transparency -It will bring more transparency in the long run (cashless economy). Since circulation in counterfeit currency will see the end soon.
    -Security/faith- with security features new 500 & 2000 Rs notes are hard to fake and put people faith in Govt
    -Ensure equity & rebalance – According to FATF most of the money used in criminal activities, bribe,laundering schemes, racketeering and drug ,money kept by corrupt officials are in high end notes. Also hording of money will decrease & equality would be there.
    -Election Funding-Most of the money used by political parties are high end money use to buy candidates so it will put a stop here.

    i m in favour of ths step

  • Meenal shukla November 24, 2016 at 3:36 pm

    The step taken by honorable Prime Minister mr narendra modi is remarkable one…he has direct targeted his protest against corruption,terrisiom..nd many other things Bt v can’t deniye the fact that the manner in which he had done smthng Good needs to be re-looked l.. The government should have replaced the Old currency immediately to ensure continuation of monetary transaction without interruption.another aspect is dat there are still large no. Of people in the unorganized sector without Bank account nd governments at the center and in the state will have to reach out to them to bring them itno the mainstream to avail the benefit of economic reforms..

  • Ritika sahni November 24, 2016 at 3:36 pm

    Its a good step by the p.m but he failed to realise that the general public or we can say the innocent people who r earning daily with great hard work r suffering rather than those who have black money.
    Have anybody seen the rich standing in the queue for the whole day…??? Definitely not
    Also there is no harm to such black money holders instead many innocent people lost their life standing in the queue the whole or suffered from injuries….
    As well as should we stand in the line or go to the work so that we can earn the daily bread for the family…????
    The initiative was good but it wasnt implemented properly if it then no one has to bear such problems…

    • litson.stephen November 24, 2016 at 3:38 pm

      And people say that
      what if people die, even people die in accidents..

      Some illogical statements too about death of people..

  • Devika Gupta November 24, 2016 at 3:38 pm

    I agree too that though the policy is a huge step taken by the central government to curb the flaws of the Indian economy but lacks appropriate planning and strategy for implementation.

  • litson.stephen November 24, 2016 at 3:42 pm

    The move lacked proper planning..

    1. Bank Officials were not ready
    2. General Public were not ready

    Bank are giving us torn notes in return of the 500 and 1000 Rs Note we give them.. They are giving 1 re, 2 rs, 5 rs and 10 rs coin as exchange…

    It was done without proper planning and you need to agree to this people..

    • Ritima Singh November 24, 2016 at 3:51 pm

      The essence of the step was that the people holding black money should not get any time to convert it or dispose off in an” unsuitable ” manner by investing in gold or property or adjusting it in foreign bank accounts. so i find no point in warning any individual or organization for that matter.

      • Parsh November 24, 2016 at 3:53 pm

        This move also deeply impacts the working sections of society: drivers, maids, cooks, etc.How do you expect a chai wallah to leave his business and stand in a queue to deposit these notes in bank?

        • Ritima Singh November 24, 2016 at 4:01 pm

          and how correct is it on our part to expect our leaders to win this race against corruption without our support? if for a couple of days our chai wala or cook has to stand in a lane, i see no harm or not that big a loss which our country has been suffering since years.

      • litson.stephen November 24, 2016 at 3:57 pm

        RBI should have been ready to print currencies.. Even they were not ready.. That is why this confusion is there..

        Just telling that removing 86% of the currency by a single decision without planning is the best way to curb corruption.

        The one who suffered were the majority who are not corrupt or do not have black money

        As Bentham stated- Policies should be made for the greater benefit of greater people and maximum pleasure with minimum pain…

        • Ritima Singh November 24, 2016 at 4:09 pm

          and why do you believe RBI wasn’t ready for this move? its the central board of RBI which recommends the central gov. for any such move and based on rbi’s recommendation the central gov through gazette of india notifies the public. notes were available in the banks rights after 4-5 days of notification. and litson as i already said, the essence lied in the surprise element else the move would have lost its purpose.
          PS: agreeing with bentham Sahab! pain is subjective, this could be minimum pain taken by us to acheive maximum pleasure, which is yet to come!

  • Parsh November 24, 2016 at 3:43 pm

    Most of the black money would have already been converted into non monetary assets (land, real estate, gold, foreign currency, foreign bank accounts, etc).
    Counterfeiting the notes again is not impossible.
    The demonetization does not affect the black money in foreign accounts.

  • Adarsh Singh Thakur November 24, 2016 at 3:44 pm

    In my opinion the decision of demonetising the old 500 and 1000 rupees note is very good in fighting the problem of corruption in oir country. Of course there are some inconvenience which is being faced by the people but it is for the greater good of our country. And even though people are worrying too much there is no reason to do so because tge government is against corruption and corrupt people and not the inncoent and hard working people. Also there are other alternatives like net banking and cheques. The people are required to deposit their money in the banks and then they can freely do business and other transactions and this was the reason behind the Pradhan Mantri Jan Dhan Yojana for opening of bank accounts. Therefore it is for the greater good and it will benefit our country in the long run.

  • Megha Sinha November 24, 2016 at 3:54 pm

    I do agree that demonetization of 500 and 1000 rupees notes is a good and effective step but we all know that India is such a populated country and implementing any program is not an easy task. It needs proper and effective planning and its execution. So i believe there is a complete sort of inconvenience at a huge level and people don’t expect this from their elected government representatives

  • Shubhankar Vajpeyi November 24, 2016 at 3:55 pm

    I have given a complete justification to your queries litson..

    • litson.stephen November 24, 2016 at 3:58 pm

      Please do justify Shubhankar

      • Shubhankar Vajpeyi November 24, 2016 at 4:02 pm

        See my reply on your first comment

  • Devika Gupta November 24, 2016 at 3:55 pm

    But the inflow of money into bank accounts will reduce interest rates and that has a stimulatory effect upon economic growth. And there would be reduction in the budget deficit as some of that black money gets taxed, which will reduce inflation again beneficial. Talking about GDP it’s a possibility only that it wud go down not certainity.

    • Parsh November 24, 2016 at 4:01 pm

      Overall market growth will come down as most people have black money to some extent which they will lose. Black money is not only with the rich but also with the upper middle class people. Its those people who do the most businesses.

  • litson.stephen November 24, 2016 at 4:09 pm

    We are closing the debate.. Some valuable comments from both sides.. A perfect conclusion would be that the Demonetization has both pros and cons.. Let us try for some time and Let the government work.. If they don’t fulfill the promise, we have the next elections.. Let us give them a fair chance to prove that they are not like the other governments..

    Thank you all…

    We will continue this type of debates in near future…

Comments are closed.