Voice Of The People

Professor Bibek Debroy talks about Demonetization

Jan Ki Baat conversed with a number of people to grasp the public mood. Bibek Debroy, Member of the Niti Ayog, explained the phenomenon of demonetization in detail. Demonetization aims at erasing the stock of black money that exists within the nation. Black money is essentially of 2 kinds: one is gathered through illegal activities like trafficking, drugs, corruption etc whereas the second kind is collected not by unlawful means but because relevant taxes on it aren’t paid. 15-20% of the money circulating in the market is either one of these kinds of black money. This percentage can be cleaned out easily with demonetization only if the public lends it relentless support and is willing to cooperate despite short-term problems. Much of inconvenience faced post-demonetization is because of the shortage of the new currency in ATMs and Banks. This is one area where improvements by the government are possible. For black money to be entirely wiped out and for bringing the cases of tax evasion under control, one must help out the authorities; 30th December 2016 is the last date for deposits so one mustn’t hurry, rushing to join the queues outside banks and ATMs.

The demonetization decision isn’t against cash, per say; it is against the cash that is unlawfully accumulated. The Income Declaration Scheme, the handouts provided by the Department of Economic Affairs have adequate information for those who are curious about the capability of these measures to curb the black wealth.

Maintaining secrecy was inevitable as it was an important part of this scheme, since any leakage would have only dampened its effects. Public inconvenience, too, is inevitable but transient.


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