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The war on cash-Demonetisation


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iii

The war on cash Demonetisation

CA Dr Khushboo Jain

EDUCREATION PUBLISHING (Since 2011)

www.educreation.in


iv


v

Disclaimer

The information contained in this book is for general information

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vii

Dedication

In the vastness of space and immensity of time, it is my joy to spend a

planet and an epoch with my family. This Book is dedicated to my

family, father, mother, mother-in-law, father-in-law and my husband.

They encouraged me and supported to all while to complete this book.

This book is dedicated to entire banking fraternity, When there has

been commotion all over the country since the announcement of

demonetization of the 500- and 1,000-rupee notes, kudos to the banking

fraternity for commendable work done. All praise for bank employees,

who are working from morning to the late hours for the noteban days for

the benefit of customers, for exchanging high denominations, collection

of deposits and other regular banking transactions. All necessary

arrangements have been made by banks as well as the government to

ensure hassle-free transactions. Bank staff, called upon to undertake this

gigantic task at such a short notice, has risen to the occasion without

complaining

Lastly this book is dedicated to my sweet 2 year daughter Ishika

who stayed patiently cooperated in her way while, I was working on the

demonetisation charter.


viii

Foreword

The book, 'The war on cash --Demonetization' by Dr Khushboo Jain

reveals the different aspects of demonetization layer by layer. Due to

demonetization 86 % of the currency came back to the banks which were

in form of Rs 500 and Rs 1000 notes. Indian economy which is worth

nearly 2 trillion dollars had shrunk in a way for few days.

Demonetization certainly created a huge ripple in the vast oceans of

Indian financial system. CA (Dr) Khushboo Jain being an accomplished

Banker and expert in financial and economic purview has put together a

fact-packed work which also exposes several popular myths in a

systematic way.

As the Indian proverb goes, 'Honhaar Birbaan ke hot chikne paat',

she started showing her extraordinary capabilities at a pretty young age.

She had received the recognition of being India‟s youngest CA. At a

young age of 14 she had cleared her high school with merit and she

already held a doctorate by the time she became 24. She is a passionate

banker and has in-depth knowledge of financial institutions.

Demonetization was seen as a weapon for fighting corruption and

terrorism in India. It was already considered a powerful tool for

controlling the black money economy. The book not only includes the

challenges ahead for the Indian economy post demonetization, but also

looks at the possibilities ahead.

The book takes you on the 50 day roller coaster post

demonetization. The book looks at several key questions on the minds of

Indian citizens such as ; -

Is India ready for a cashless economy?

What does a cashless economy mean for an average citizen?

How will rural India adopt to the challenges of a cashless economy?

Will digitized transactions control the black money and terror

operations in a significant way? And so on.

The book also throws light on the government machinery,

technology and policy mechanisms. Giving such a lucid explanation of

such a complex topic in such a short period of time was not an easy task

for sure, yet Dr CA Khushbu has not just done it, she has rather done it

well.

--Dr. Prakash Hindustani

Prakashhindustani.com


ix

Foreword

In the night Donald Trump was elected the next US president and on

same night, In a surprise TV address Narendra Modi, the Indian prime

minister, announced that all 500- and 1,000-rupee notes would be

withdrawn immediately from circulation. At a stroke Mr Modi rendered

86% of currency worthless outside a bank branch.

This brought an ripple in the financial system in the economy and

banking, CA(Dr) Khushboo Jain an accomplished Banker and expert in

financial economic purview put together "An illuminating, provocative

and fact-packed work that does make you wonder why was such scheme

launched and what impact it has on common men. It also exposes some

well-worn pub truths as urban myths of banking system.

"Meticulously written, [The war on Cash] covers everything needed

for such a monetary reform. But the book is not excessively polemical.

CA (Dr.) Khushboo details almost all the arguments for and against

tinkering with paper currency, then banking labors to refute or defuse

them." Khushboo is on very solid ground is when she says the process of

weaning us further off cash should begin with the abolition of high-

denomination notes." Khushboo makes a compelling case for the crime-

fighting power of Indian demonetisation about India‟s WAR on CASH"

It was justified as a move designed to fight corruption and target

people who have been dodging taxes by holding stockpiles of cash,

known in India as “black money”.

This Book gives a complete analysis for Indian Demonetisation

Scheme. Delegalisation in the current form as India has attempted is the

largest ever macro-economic programme ever attempted consciously. It

has been a huge leap of faith for the policy mandarins in India led by the

Prime Minister.

Many initially saw the withdrawal of banknotes as a price worth

paying to eliminate graft. The short-term impact of “demonetisation” has

been dramatic: the $2 trillion Indian economy will shrink. This book

analyzes and gives the road ahead for Indian economy post

demonetisation.

[The WAR on Cash] is a fascinating contribution to the debate

about what might be done to help get many other countries out of an

economic funk.

This book sets the standard on analysis of the demonetization

scheme and more important; it is also sure to influence discussions about

the ability of central banks to deliver growth and financial stability.


x

Khushboo explain the journey of 50 Days of demonetisation and

what faired on the opposite side on table from the Banker. "Should we

become a largely cashless society? This book touches on economy,

government machinery , technology, and monetary policy. Clearly and

persuasively evaluated the demonetisation scheme and its benefits.


xi

50 Days of India’s War on Cash

50

The number days Mr. Modi asked Indians to bear with him. “Give me

time until December 30,” Mr. Modi said. “After that, if any fault is found

in my intentions or my actions, I am willing to suffer any punishment

given by the country.”

12.44 TRILLION RUPEES ($183 BILLION)

The value of old 500- and 1,000-rupee notes that Indians exchanged up

to Dec. 13, according to RBI Deputy Governor R. Gandhi. The RBI said

earlier this year the total amount of notes in circulation in the country

was valued 16.42 trillion, about 86% of which was in notes of 500 and

1,000 rupees

2.2 BILLION

The number of 500- and 2,000-rupee bills the RBI issued between Nov.

10 and Dec. 21, according to the RBI. That is a small proportion of the

22.6 billion bills of all denominations it issued during the period.

14 MILLION

The number of users Paytm, India‟s largest mobile-payment company,

said this month it has added since the government‟s decision to scrap the

notes on Nov. 8.

ALMOST 215,000

Of the 215,000 ATMs in India, almost all have been recalibrated,

according to a spokesman for NCR, the market-leader for providing cash

machines in the country. The machines need to be adjusted so they can

issue the new, slimmer notes.


xii

The War On Cash - Demonetisation

Sr No. Chapter Page

1. Introduction 1

2. Actions initiated by government 12

3. Need of Demonetisation and its remedy 21

4. Salient features of the Scheme 37

5. Reactions on Demonetisation 41

6. Impact on various sectors. 55

7. How indian economy went of rail and what future

looks like

75

8. Closure of Scheme 85

9. Demerits of Demonetisation 89

10. Merits of Demonetisation 98

11. Days ahead demonetisation 106

12. Conclusion 118


xiii



1

Chapter 1

Introduction

W

It was all so dramatic, the cheer and trepidation, on November 8 when

the prime minister announced the demonetisation Rs 500 and Rs 1000

notes. It was the „surgical strike‟ in his government‟s crusade against

„black money‟.

Government of India vide their notification no. 2652 dated

November 8 2016 has decided discontinue the legal tender character of

high denomination banknotes of Rs 500 and Rs 1000. In other words

such notes will not be a legal tender from midnight of nov 8 2016. This

decision is being made to curb financing of terrorism through the

proceeds of Fake indian Currency Notes and for eliminating black

money.

The announcement was made by the Prime Minister of India

Narendra Modi in an unscheduled live televised address at 20:00 Indian

Standard Time (IST) on 8 November.In the announcement, Modi

declared that use of all `500 and `1,000 banknotes of the Mahatma

Gandhi Series would be invalid past midnight, and announced the

issuance of new `500 and `2,000 banknotes of the Mahatma Gandhi New

Series in exchange for the old banknotes. The banknotes of `100, `50,

`20, `10 and `5 of the Mahatma Gandhi Series and `2 and `1 remained

legal tender and were unaffected by the policy.

The government claimed that the demonetisation was an effort to

stop counterfeiting of the current banknotes allegedly used for funding

terrorism, as well as a crackdown on black money in the country. The

move was also described as an effort to reduce corruption, the use of

drugs, and smuggling.

India‟s ambitious exchange of currency notes is novel. Very few

other countries have repudiated the value of over 85% of outstanding

currency. The primary aim is eliminating the stocks of cash held as

“black money” to make payments in the informal economy, to avoid

taxes, or to fund illicit activity. It may diminish the use of cash in the

future, whether for legitimate or black money-linked activity. It could


Dr Khushboo Jain

2

also impact the money supply, interest rates, financial inclusion and

government finances. This brief attempts to gauge the magnitude and

breadth of impact of this major policy move.

The issue of India‟s black money brings to mind the garlands of

rupee notes presented to Kumari Mayawati on her birthday when she was

chief minister of the state of Uttar Pradesh. Untraceable, black money

notoriously funds political campaigns and facilitates tax evasion—

notably stamp duties in real estate—as well as, of course, explicitly

illegal activity. Nobody really knows the amount of black money in

India. Various guesses put it at a fifth to a third of the Rs17 trillion

currency in circulation (about US$250 billion). On top of true black

money, counterfeit currency plays a largely similar role and is a widely

acknowledged problem. Various formal estimates exist on the amount of

counterfeit currency in India, ranging from four to 0.004 counterfeit

pieces per thousand bills in circulation.1 Much higher unofficial

estimates circulate in New Delhi among law enforcement officials.

Indian Prime Minister Narendra Modi made a surprise TV

announcement in New Delhi Tuesday evening that the current 500 and

1,000 rupee notes would cease to be legal tender at midnight early

Wednesday.The notes will be replaced by new 500 and 2,000 rupee

notes, Mr. Modi said.

Here‟s the full text of the speech in which he made the

announcement

My dear citizens,

I hope you ended the festive season of Diwali with joy and new

hope. Today, I will be speaking to you about some critical issues and

important decisions. Today I want to make a special request to all of you.

You may recall the economic situation in May 2014 when you entrusted

us with an onerous responsibility. In the context of BRICS, it was being

said that the “I” in BRICS was shaky. Since then, we had two years of

severe drought. Yet, in the last two and a half years with the support of

125 crore Indians, India has become the “bright spot” in the global

economy. It is not just we who are saying this; it is being stated by the

International Monetary Fund and the World Bank.

In this effort for development, our motto has been „Sab Ka Saath

Sab Ka Vikas‟: We are with all citizens and for development of all

citizens. This Government is dedicated to the poor. It will remain

dedicated to them. In our fight against poverty, our main thrust has been

to empower the poor, and make them active participants in the benefits of

economic progress.



3

The Pradhan Mantri Jan Dhan Yojana, the Jan Suraksha Yojana, the

Pradhan Mantri Mudra Yojana for small enterprises, the Stand-up India

program for Dalits, Adivasis and women, the Pradhan Mantri Ujjwala

Scheme for gas connections in the homes of the poor, the Pradhan Mantri

Fasal Beema Yojana and Pradhan Mantri Krishi Sinchai Yojana to

protect the income of farmers, the Soil Health Card Scheme to ensure the

best possible yield from farmers‟ fields, and the e-NAM National Market

Place scheme to ensure farmers get the right price for their produce—

these are all reflections of this approach.

In the past decades, the specter of corruption and black money has

grown. It has weakened the effort to remove poverty. On the one hand,

we are now no.1 in the rate of economic growth. But on the other hand,

we were ranked close to one hundred in the global corruption perceptions

ranking two years back. In spite of many steps taken, we have only been

able to reach a ranking of seventy-six now. Of course, there is

improvement. This shows the extent to which corruption and black

money have spread their tentacles.

The evil of corruption has been spread by certain sections of society

for their selfish interest. They have ignored the poor and cornered

benefits. Some people have misused their office for personal gain. On the

other hand, honest people have fought against this evil. Crores of

common men and women have lived lives of integrity. We hear about

poor auto-rickshaw drivers returning gold ornaments left in the vehicles

to their rightful owners. We hear about taxi drivers who take pains to

locate the owners of cell phones left behind. We hear of vegetable

vendors who return excess money given by customers.

There comes a time in the history of a country‟s development when

a need is felt for a strong and decisive step. For years, this country has

felt that corruption, black money and terrorism are festering sores,

holding us back in the race towards development.

Terrorism is a frightening threat. So many have lost their lives

because of it. But have you ever thought about how these terrorists get

their money? Enemies from across the border run their operations using

fake currency notes. This has been going on for years. Many times, those

using fake 500 and 1,000 rupee notes have been caught and many such

notes have been seized.

Brothers and sisters,

On the one hand is the problem of terrorism; on the other is the

challenge posed by corruption and black money. We began our battle

against corruption by setting up an SIT headed by a retired Supreme

Court judge, immediately upon taking office. Since then a law was

passed in 2015 for disclosure of foreign black money;


Dr Khushboo Jain

4

agreements with many countries, including the USA, have been

made to add provisions for sharing banking information;

a strict law has come into force from August 2016 to curb benami

transactions, which are used to deploy black money earned through

corruption;

a scheme was introduced for declaring black money after paying a

stiff penalty;

My dear countrymen,

Through all these efforts, in the last two and a half years, we have

brought into the open nearly 1 lakh 25 thousand crore rupees of black

money belonging to the corrupt. Honest citizens want this fight against

corruption, black money, benami property, terrorism and counterfeiting

to continue. Which honest citizen would not be pained by reports of

crores worth of currency notes stashed under the beds of government

officers? Or by reports of cash found in gunny bags?

The magnitude of cash in circulation is directly linked to the level of

corruption. Inflation becomes worse through the deployment of cash

earned in corrupt ways. The poor have to bear the brunt of this. It has a

direct effect on the purchasing power of the poor and the middle class.

You may yourself have experienced when buying land or a house, that

apart from the amount paid by check, a large amount is demanded in

cash. This creates problems for an honest person in buying property. The

misuse of cash has led to artificial increase in the cost of goods and

services like houses, land, higher education, health care and so on.

High circulation of cash also strengthens the hawala trade which is

directly connected to black money and illegal trade in weapons. Debate

on the role of black money in elections has been going on for years.


To break the grip of corruption and black money, we have decided

that the 500 rupee and 1,000 rupee currency notes presently in use will

no longer be legal tender from midnight tonight, that is 8th November

2016. This means that these notes will not be acceptable for transactions

from midnight onwards. The 500 and 1,000 rupee notes hoarded by anti-

national and anti-social elements will become just worthless pieces of

paper. The rights and the interests of honest, hard-working people will be

fully protected. Let me assure you that notes of 100, 50, 20, 10, five, two

and one rupee and all coins will remain legal tender and will not be

affected.



5

This step will strengthen the hands of the common man in the fight

against corruption, black money and fake currency. To minimize the

difficulties of citizens in the coming days, several steps are being taken.

1. Persons holding old notes of 500 or 1,000 rupees can deposit these

notes in their bank or post office accounts from 10th November till

close of banking hours on 30th December 2016 without any limit.

2. Thus you will have 50 days to deposit your notes and there is no

need for panic.

3. Your money will remain yours. You need have no worry on this

point.

4. After depositing your money in your account, you can draw it when

you need it.

5. Keeping in mind the supply of new notes, in the first few days, there

will be a limit of 10,000 rupees per day and 20,000 rupees per

week. This limit will be increased in the coming days.

6. Apart from depositing your notes in your bank account, another

facility will also be there.

7. For your immediate needs, you can go to any bank, head post office

or sub post office, show your identity proof like Aadhaar card, voter

card, ration card, passport, PAN card or other approved proofs, and

exchange your old 500 or 1,000 rupee notes for new notes.

8. From 10th November till 24th November the limit for such

exchange will be 4,000 rupees. From 25th November till 30th

December, the limit will be increased.

9. There may be some who, for some reason, are not able to deposit

their old 500 or 1,000 rupee notes by 30th December 2016.

10. They can go to specified offices of the Reserve Bank of India up to

31st March 2017 and deposit the notes after submitting a

declaration form.

11. On 9th November and in some places on 10th November also,

ATMs will not work. In the first few days, there will be a limit of

2,000 rupees per day per card.

12. This will be raised to 4,000 rupees later.

13. 500 and 1,000 rupee notes will not be legal tender from midnight.

However for humanitarian reasons, to reduce hardship to citizens,

some special arrangements have been made for the first 72 hours,

that is till midnight on 11th November.

14. During this period, government hospitals will continue to accept 500

and 1,000 rupee notes for payment.


Dr Khushboo Jain

6

15. This is for the benefit of those families whose members may be

unwell.

16. Pharmacies in government hospitals will also accept these notes for

buying medicines with doctors‟ prescription.

17. For 72 hours, till midnight on 11th November, railway ticket

booking counters, ticket counters of government buses and airline

ticket counters at airports will accept the old notes for purchase of

tickets. This is for the benefit of those who may be travelling at this

time.

18. For 72 hours, 500 and 1,000 rupee notes will be accepted also at

Petrol, diesel and CNG gas stations authorized by public sector oil

companies

Consumer co-operative stores authorized by State or Central

Government

Milk booths authorized by State governments

Crematoria and burial grounds.

These outlets will have to keep proper records of stock and

collections.

19. Arrangements will be made at international airports for arriving and

departing passengers who have 500 or 1,000 rupee notes of not

more than 5,000 rupees, to exchange them for new notes or other

legal tender.

20. Foreign tourists will be able to exchange foreign currency or old

notes of not more than Rs 5,000 into legal tender.

21. One more thing I would like to mention, I want to stress that in this

entire exercise, there is no restriction of any kind on non-cash

payments by checks, demand drafts, debit or credit cards and

electronic fund transfer.


In spite of all these efforts there may be temporary hardships to be

faced by honest citizens. Experience tells us that ordinary citizens are

always ready to make sacrifices and face difficulties for the benefit of the

nation. I see that spirit when a poor widow gives up her LPG subsidy,

when a retired school teacher contributes his pension to the Swacch

Bharat mission, when a poor Adivasi mother sells her goats to build a

toilet, when a soldier contributes 57,000 rupees to make his village clean.

I have seen that the ordinary citizen has the determination to do anything,

if it will lead to the country‟s progress.



7

So, in this fight against corruption, black money, fake notes and

terrorism, in this movement for purifying our country, will our people not

put up with difficulties for some days? I have full confidence that every

citizen will stand up and participate in this „mahayagna‟. My dear

countrymen, after the festivity of Diwali, now join the nation and extend

your hand in this Imandaari ka Utsav, this Pramanikta ka Parv, this

celebration of integrity, this festival of credibility.

I am sure that all political parties, all governments, social services

organizations, the media and indeed all sections of the society will take

part in this with enthusiasm and make it a success.

My dear countrymen,

Secrecy was essential for this action. It is only now, as I speak to

you, that various agencies like banks, post offices, railways, hospitals

and others are being informed. The Reserve Bank, banks and post offices

have to make many arrangements at very short notice. Obviously, time

will be needed. Therefore all banks will be closed to the public on 9th

November. This may cause some hardship to you. I have full faith that

banks and post offices will successfully carry out this great task of

national importance. However, I appeal to all of you to help the banks

and post offices to meet this challenge with poise and determination.

My dear citizens,

From time to time, based on currency needs, the Reserve Bank with

the approval of the Central Government brings out new notes of higher

value. In 2014, the Reserve Bank sent a recommendation for issue of

5,000 and 10,000 rupee notes. After careful consideration, this was not

accepted. Now as part of this exercise, RBI‟s recommendation to issue

2,000 rupee notes has been accepted. New notes of 500 rupees and 2,000

rupees, with completely new design will be introduced. Based on past

experience, the Reserve Bank will hereafter make arrangements to limit

the share of high denomination notes in the total currency in circulation.

In a country‟s history, there come moments when every person feels

he too should be part of that moment, that he too should make his

contribution to the country‟s progress. Such moments come but rarely.

Now, we again have an opportunity where every citizen can join this

mahayajna against the ills of corruption, black money and fake notes.

The more help you give in this campaign, the more successful it will be.

It has been a matter of concern for all of us that corruption and black

money tend to be accepted as part of life. This type of thinking has

afflicted our politics, our administration and our society like an

infestation of termites. None of our public institutions is free from these

termites.


Dr Khushboo Jain

8

Time and again, I have seen that when the average citizen has to

choose between accepting dishonesty and bearing inconvenience, they

always choose to put up with inconvenience. They will not support

dishonesty.

Once again, let me invite you to make your contribution to this

grand sacrifice for cleansing our country, just as you cleaned up your

surroundings during Diwali.

Let us ignore the temporary hardship.

Let us join this festival of integrity and credibility.

Let us enable coming generations to live their lives with dignity.

Let us fight corruption and black money.

Let us ensure that the nation‟s wealth benefits the poor.

Let us enable law-abiding citizens to get their due share.

I am confident in the 125 crore people of India and I am sure

country will get success.

Thank you very much. Thanks a lot.

Namaskar.

Bharat Mata Ki Jai.

However, in the days following the demonetisation, banks and

ATMs across the country faced severe cash shortages] with severe

detrimental effects on a number of small businesses, agriculture, and

transportation. People seeking to exchange their notes had to stand in

lengthy queues, and several deaths were linked to the inconveniences

caused due to the rush to exchange cash. Also, following the

announcement, the BSE SENSEX and NIFTY 50 stock indices crashed

for the next two days.

Initially, the move received support from several bankers as well as

from some international commentators. It was heavily criticised by

members of the opposition parties, leading to debates in both houses of

parliament and triggering organised protests against the government in

several places across India. As the cash shortages grew in the weeks

following the move, the demonetization was heavily criticised by

prominent economists, such as Kaushik Basu, Paul Krugman, Amartya

Sen and Steve Forbes.

The Government of India devised an Income Declaration Scheme

(IDS), which opened on 1 June and ended on 30 September 2016. Under

the scheme, the black money holders could come clean by declaring the

assets, paying the tax and penalty of 45% thereafter.

After Modi's announcement, the Governor of the Reserve Bank of

India, Urjit Patel, and Economic Affairs secretary, Shaktikanta Das

explained in a press conference that one purpose of the action was to



9

fight terrorism funded by counterfeit notes. While the supply of notes of

all denominations had increased by 40 percent between 2011 and 2016,

the `500 and `1,000 banknotes increased by 76 percent and 109 percent,

respectively, owing to forgery. They said that forged cash was used to

fund terrorist activities against India and that the demonetisation had a

counter-terrorism purpose.

Patel also informed that the decision had been made about six

months ago, and the printing of new banknotes of denomination `500

and `2,000 had already started. However, only the top members of the

government, security agencies and the central bank were aware of the

move. But media had reported in October 2016 about the introduction of

`2,000 denomination well before the official announcement by RBI. This

statement has led to much debate, because the Reserve Bank governor

six months before the announcement was Raghuram Rajan, while the

new banknotes have the signature of the newly appointed governor, Urjit

Patel.

India's Demonetization 50 Days In - Not Perfect But Moving

In The Right Direction

We're just hitting the 50 day stage in Prime Minister Narendra Modi's

campaign to move India to a less cash, if not a cash less, society. Part of

this was demonetization, the taking of the old Rs 500 and Rs 1,000 notes

out of circulation. That was 86% of the money supply by value that had

to cycle through the banks, either to be exchanged in limited numbers for

the new Rs 500 and Rs 2,000 notes or to be deposited into banks. There

is distinct controversy about whether this is all worth it and if we look at

this one specific action in isolation perhaps not. However, as part of the

general campaign it is, as I've been saying, a most welcome addition.

And to come back to the major and important point. Is

demonetization, as just demonetization, a great success? May be likely

No, it isn't, and it never would have been. The aim is to crack down upon

black money in the Indian economy. To get everything moved into the

licit and taxed economy. Both so it can be taxed and also so that the

pernicious effects of bribes and favors which so distort the economy can

be limited. The reason it never was going to have much effect is that the

major distortions here are not in cash rupees. Seriously rich people are in

land, or gold, or dollars, or Switzerland. It's very much the small scale

stuff that is taking place in Rs 1,000 notes. No, really, vast black market

transactions do not take place with piles of Rs 1,000 notes.

The part something I've only heard about through the grapevine.

This is gossip, no more. But useful gossip all the same. Starting in 12

months‟ time the Swiss banks will be sharing information with the Indian

government on those Indian citizens who have accounts there. That does


Dr Khushboo Jain

10

strike rather harder at significant amounts of black money. And what I'm

hearing is that this is stampeding rich Indians into actually getting proper

tax advice for the first time. No, this doesn't quite mean that they are

about to pay all and every tax that could possibly be due. But people who

used to rely upon the hawala system to entirely ignore the tax laws are

now looking for legal ways in which to reduce, rather than not have at

all, their tax bills.

That is, the offshore money is beginning to move from tax evasion

to tax avoidance which is indeed an advance in people obeying the law.

One way of thinking about all of the above is that I'm saying that

demonetization is the side show, the public play if you like, while the

important things about black money are going on elsewhere. And that is

one way to read it if you wish. However, I regard it the other way

around. I think it's much more important that everyone thinks the game is

roughly fair than I do worry about a few scofflaws not paying taxes.

Thus it might well be the benami laws, or the Swiss banks, which are

more important in raising tax revenues. But to me it is the creation of the

confidence which leads to that chai wallah investing in the chapati stand

which is what will grow the economy and thus the demonetization,

precisely as that piece of public theatre, which is the most important part

of the entire campaign.

Several economist also opined that control economy is for fertile

land for black money. Anna Hazare‟s agitation against corruption in

2011 , better known as “Bharashtracharya Virodhi Andolan” compelled

the government to announce in parliament in november 2011 that it will

prepare whitepaper on blackmoney. The paper was tabled in may 2012.

In parliament by honorable finance minister. As this paper was in

response to Anna Hazare‟s agitation against corruption. The public at

large expected that the , “ Whitepaper on Black Money” would provide

ways and means to curb corruption and there by to eliminate

blackmoney.

During the year , 2011 Anna Hazare agitation against corruption

moved the citizen particular youth of India in favour of this agitation.

During the almost small time there was news in media enormous amount

of blackmoney is staged abroad , particularly swiss bank. Initially

government tried to pacify the agitators by interesting the job of

assessing the amount of unaccounted income and wealth both inside and

outside the country and to suggest ways and means for the detection and

prevention of black money and bringing the same to mainstream

economy and three premium institutes.However public anger continued

on the issue , and ultimately adjournment motion was moved in the

parliament on the topic. BlackMoney deposited illegally in foreign banks



11

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