A year after demonetisation, the hunt for elusive black money continues

It’s been a year, since Prime Minister Narendra Modi has announced demonetisation, and we are still waiting for black money to be accounted. Well this reminds me of song from 70’s, ‘Kya hua tera vaada..’, where have promises gone, Mr Modi?

Modi government promised many things like 1 crore jobs per year, crackdown on corruption and terror funding, stabilising Indian economy and bring in black money. But till today, none of the promises have been fulfilled.

While announcing demonetisation, he assured citizens that by doing this, his government will be able to track black hoarders, which will make it easy to bring back black money. He also promised that he will punish those who were found with black money. Well, it has been a year now, and there is no proper figures over black money given either by the government or the RBI. On the other hands, the Reserve Bank of India (RBI) in September came out with provisional figures on the count of old Rs 500, Rs 1000 notes that were returned to the banking system.

Subject to future corrections based on verification process when completed, the estimated value of SBNs (specified bank notes) received as on 30 June 2017 is Rs 15.28 trillion, the RBI said in its annual report released in September. The total value of invalidated Rs 500 and Rs 1,000 notes at the time of demonetisation was Rs 15.44 lakh crore or around 86 per cent of the currency in circulation. This means 99 per cent of the demonetised currency has found its way back to the banking system. Only a little over Rs 16,000 crore of Rs 15.44 lakh crore was not returned.

So does mean that there is no black money or just 1 per cent of it, in the system. And does this mean just for this 1 per cent of the black money Modi government was responsible for serpentine like long queues outside banks. And, businesses are still recovering from the losses they faced due to demonetisation. Well, this is very clear and evident that Modi government has failed to bring in black money.

The RBI also told a parliamentary panel that it has “no information” on how much black money has been extinguished as a result of demonetisation of Rs 500/1,000 notes or about unaccounted cash legitimised through exchange of currency post note ban.

Well even the RBI has no clue about black money. Ridiculous, right. The RBI report, further said that cost of printing currency post demonetisation (mainly on account of the new Rs 2,000 and Rs 500 notes), escalated to Rs 7,965 crore, more than double the figure in the previous year when it stood at Rs 3,421 crore.

Well seriously, government wasted its time as well as its resources, it was not a planned moved which affected the Modi government a big time, for which it is facing heat from opposition and common man. Well to add to misery, Modi government implemented GST also— which was basically its predecessors (Congress) idea— which was put on hold because back than even Congress-led government thought it had loopholes in it. But, Modi government just wanted to take credit and implemented it without any planning. While businesses were recovering from demonetisation, they were again hit by GST.

Demonetisation-resulted cash crunch hit the common man hard, businesses suffered and the economic growth was hit by a significant margin. The fourth quarter GDP fell to 6.1 percent from 8 percent from the year-ago quarter.

Well I guess the Modi government forgot they cannot bring back black money which is not in Indian banking. What if it is stored in international banks for example, Swiss bank? Well yes that’s right. People are smarter; they might have stashed their black money in international banks, for which Indian government can’t do anything. No policies have been mapped out to block such overseas accounts which have huge amount of money stashed in. And such international banks have a strict privacy policy too. So how is the Modi government tackle this?

Well the question still remains, did demonetisation help? Well, it depends whom you are asking. If you ask this Modi government, they will say yes it is helping. They will quote it as short term pain for long term gains. But, if you ask a common man, they will say no, it has not helped a bit, because they are still suffering from its consequences.

(Views expressed by writer are personal.)

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