Other Photo Credit: Reuters

Demonetisation: Seven ‘myths’ busted

22 November, 2016

Following Prime Minister Narendra Modi’s sudden 8 November announcement declaring that Rs 500 and Rs 1000 notes were no longer legal tender, rumours about what the government might do next, have swirled. Modi’s statement last week that more steps were in the offing has further fuelled speculation on what the government may be up to.

To counter such rumors, late on Wednesday evening, the government issued a series of clarifications. Here’s what the government had to say, in a series of Tweets:

No plans to demonetise Rs 50 and Rs 100 notes: The Press Information Bureau (PIB) termed these rumors “baseless” and said there was no such move in the offing.

Next step will be to seal bank lockers and seize gold jewellery: “Baseless” says the government. There is no such proposal.

Were plans to demonetise Rs 500 and Rs 1000 notes leaked to certain sections?

Rubbish, says the government, responding to allegations by political leaders including Delhi chief minister Arvind Kejriwal that people aligned to the ruling Bharatiya Janata Party were aware of the government’s plans to pull back these notes that make up for 86% of the value of currency in circulation. “Complete secrecy was maintained,” the PIB said.

The cost of implementation outweighs its benefits: The government says that the “parallel economy eats into the vitals of the country’s economy, adversely affecting the poor and the middle classes more than the others,” thus implying, that the costs were justified.

People will find other means to game the system: The government says that enforcement agencies “are keeping necessary watch.” Moreover, it says that the Benami Transactions Act (for property) and information sharing agreements with various other governments will help check any fraudulent activity.  

On reports that the new Rs 2000 note is embedded with ‘microchips’: “Figment of imagination,” says the government.

The new Rs 2000 notes are of inferior quality, and the colour comes off: The government says that this is in fact a security feature called “intaglio printing.” It says that the “first test for a genuine currency note is to rub it with a wet cloth; this creates a turbo-electric effect, transferring the ink into the cloth.” Therefore, be worried if your currency note actually does not lose its colour.

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Demonetisation: Seven ‘myths’ busted

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