The objective behind the RBI decision to withdraw from circulation all currency notes issued before 2005 seems unclear. It certainly cannot be its case that it will help tackle the huge problem of a parallel economy. If at all, it will only marginally lessen the circulation of black money into the economy. Maybe because the objective is vague, the central bank itself has taken care not to pitch the move as anything remotely connected with the problem of black money.
Instead, it has said that the idea is to withdraw soiled and old notes from circulation, especially those printed before 2005 which were relatively easy to counterfeit. It is notable that 14.1 billion pieces of soiled currency notes were removed from circulation in 2012-13. This was 358 million more than the figure for the previous year.
The central bank has said that notes to be withdrawn do not carry the year these were printed in, a feature missing on all notes printed before 2005. All banks are duty-bound to exchange these notes from all citizens between April 1 to June 14, 2014.
However, after July 1, 2014, banks can exchange only ten pieces of Rs. 500 and Rs 1,000 notes from its customers while non-customers will have to furnish their identity and residence proof. In other words, everyone holding in cash high-denomination old notes, legitimate or illegitimate, will necessarily rush to exchange them for the new ones before June 14 this year.
Since the next general election is to be held anytime before the end of May, hordes of illicit funds can be deployed in the polls without any questions being asked about the validity of the currency notes involved. In any case, much of the black money is not hidden in secret vaults or even under the pillow by grannies, but it is put to good use in the parallel economy. Unless the problem of black money is attacked at its source, for example, in the real estate and manufacturing sectors, such schemes as the exchange of old notes for new will only skim the surface of the problem.
Further, the RBI has clarified that even if holders of these notes fail to exchange these notes within the stipulated time-frame, they will not lose their validity. Of course, the exchange of pre-2005 notes does not tantamount to demonetisation, not by a long chalk. That would involve a huge exercise and might result in temporarily destabilizing the entire economic order. In short, the exchange of old notes for new is really much ado about nothing.
Though the Aam Aadmi Party may have frittered away a lot of goodwill by its misconduct in recent days, one cannot help sympathise with its poet-leader Kumar Vishwas. Several FIRs and court complaints have been filed against him in different parts of the country following his decision to challenge Rahul Gandhi in Amethi in the Lok Sabha poll.
The basis of all these complaints is the conduct of Vishwas in his previous calling as a poet-humorist. Unmindful of the universal fact that poets/humorists/comedians enjoy a certain degree of license and are not obliged to be always politically correct, Vishwas’s old gags and humorous digs to entertain the audiences are being picked on for foisting cases with the sole purpose of harassing him.
A group of Kerala nurses were made to demonstrate against him in New Delhi on Wednesday because several years ago he had good-humoredly commented on the colour of their skins. A group of Muslims were prevailed upon to protest because he had taken humorous potshots at their religious practice of self-flagellation.
The point is that you have to separate his life as a poet-humorist from his new avatar as a politician. His counter argument that politicians like Raj Babbar and Shatrughan Sinha too ought to be unacceptable since they did awful things as film villains has some merit. Given that nobody made that argument against Babbar or Sinha when they contested the Lok Sabha poll, it is inescapable that Vishwas is being singled out only because he has shown the temerity to challenge Rahul Gandhi in his own backyard of Amethi.
Such crude tactics reflect poorly on the people behind this campaign of harassment. It is in the Gandhi scion’s own interest that he puts an early end to it. The issue ought to be settled through fair electoral contest rather than through third-party persecution of the AAP candidate in Amethi.