Rajiv Kumar, former vice-chairman of government think tank Niti Aayog, today gave a mixed report card on the 2016 bill ban. The Supreme Court, in a 4-1 decision upholding the notes ban, sidestepped the issue, saying it was “irrelevant” whether the goals of the overnight ban were achieved.
However, Mr Kumar told NDTV that he does not think the banknote ban has succeeded in achieving its intended goals. The only positive factor, he said, is digitization.
Mr Kumar told NDTV in an exclusive interview that the results of the banknote ban had been “mixed”. “Because given the nature of our economy, the disorganized sector of our economy, a large part of our economy is run on cash, large sectors like construction trying to phase out the cash economy or black money and so on, I don’t think it’s going to happen,” he said. he added.
When the banknote ban was announced in November 2016, Prime Minister Narendra Modi made it clear that the ban was part of a larger plan to curb black money and, by extension, terrorism.
But six years on, there are far more counterfeit notes in circulation than in 2016.
The total currency value in March this year rose by 89 per cent to Rs 3,105,721 crore from Rs 1,641,571 crore as of March 2016, the Finance Ministry told Parliament today.
The number of currency notes in circulation jumped by 44% to 130.533 billion notes in March 2022, according to data shared by the ministry in the Lok Sabha today.
Meanwhile, the value of digital payments soared from Rs 6,952 crore in 2016 to Rs 12 trillion by October 2022.
The majority judgment of the Supreme Court today held that the government has the right to demonetize all series of banknotes and follow due process, while banning Rs 500 and Rs 1,000 notes in 2016. The court said the decision met the proportionality test – meaning it was a reasonable approach to root out black money and counterfeit currency. The judges said the 52-day period for the exchange of comments was not unreasonable.
In a strongly dissenting judgment, Justice BV Nagarathna said the banknote ban was “null and unlawful”.