On the night of 8th November, 2016 when America was counting votes, India was counting notes!
When the Indians were busy witnessing the preparation for the final battle of Presidential Election of the US, they had no idea what battle they were going to face in long queues outside the ATMs and banks to exchange their old currency notes. Snatching all the limelight from Hillary and Trump, our Prime Minister Mr. Narendra Modi announced the demonetization of Rs 500 and Rs 1000 of Indian currency. In a speech on national television he announced that all the Rs 500 and 1000 notes would cease to be legal tender from 9th November, 2016midnight and the scrapped notes of 500 rupees would be replaced by new currency notes and that new Rs 2000 notes will be launched. Within few hours, all the 500 and 1000 denominations of notes became “just a worthless pieces of paper”. Modi Ji took this bold step of currency change with the aim of curbing black money, terrorism, reducing the corruption, drug peddling, smuggling, eliminating the fake currency and most importantly, bringing all the money under the coverage of tax and demanding the accountability of every note printed by the RBI over the years.
While this “big bang reform” by Modi Ji has been praised by almost all stalwarts of banking sectors, middle and lower class section of the society started shedding tears along with the black money holders. It created dramatic impacts on the Indian social-economic condition.
The scarcity of cash due to demonetization has caused chaos and that continues to be the scenario even today. People are facing extreme difficulties to exchange the old banknotes. Keeping this hardship of the common people in mind, many public interest litigations have been filed against the government’s move to scrap the notes of Rs 500 and Rs 1000.
DEMONETISATION AND PUBLIC INTEREST LITIGANTS:
Nearly about 15 Public Interest Litigations have been filed in Supreme Court and various High Courts in Mumbai, Andhra Pradesh, Kerala, Karnataka, Kolkata etc. Public Interest Litigants have challenged the central government’s notification on various grounds, the most important of which are –
- It is a violation of fundamental rights under article 19, 21 of Indian constitution- right to life, liberty, right to trade freely.
- It violates Section 26(2) of the Reserve Bank India Act, 1934. They are arguing that reasonable time should be given to people to make alternate financial arrangements in order to avoid large scale mayhem and chaos.
A Public Interest Litigation (PIL) that has been filed in the Madras High Court against demonetization, has been dismissed the by the Hon’ble Court. It has been stated by the Court that it could not and would not interfere in the government’s monetary policies and the financial steps that it undertakes. The Court stated that big currency notes were used to fund terrorist activities and that black money was harming the economy of the country. The actions taken by the government are necessary for the security and development of our country. Although they caused some inconveniences to people, they were taken for the welfare of the country and were being implemented with the cooperation of various sections of people.
PILs on the same grounds were also filed before the Supreme Court by the likes of Kapil Sibalagainst this decision of the government. Supreme Court observed that the government is independent to change monetary policy, considering the prevailing socio-economic conditions and that the role of the Courts is limited in this aspect. The Court’s Constitutional Bench later said that they will verify the constitutional validity of the Demonetisation move.
The Calcutta High Court observed in another PIL that the government had made the demonetization move without sufficient “homework”. A Bench of Chief Justice Girish Chandra Gupta and Justice Arindam Sinha observed the need of some measures to ameliorate the sufferings of the common people.
Two advocates from the Bombay High Court also approached to take suo motu cognizance of the government’s decision to ban Rs 500 and RS 1000 currency notes.
The Karnataka High Court has dismissed a plea by a lawyer against demonetization after observing that the problems are initial and not permanent. A bench in its order on a PIL said that there is no reason to doubt the bona fide intent of the central government on the matter of demonetization.
Though the Supreme Court decided not to interfere in the decision of the government, it asked the Centre to take all measures to help the suffering people due to the currency crunch and to present an affidavit of the same. To resolve the difficulties, some special dispensations were given by our government to ease the cash crunch. Some of them are-
- During the period of 23rd November to 31st December Service tax will not be levied on ticket booking through the IRCTC website.
- Exemptions will continue for payment of utility bills, payments at petrol pumps and pharmacies using old 500 rupees notes till 15th
- Farmers will be allowed to purchase the seeds for their current rabi crops with old currencies.
- For meeting wedding expenses in this ongoing wedding season withdrawal of extra amount upto Rs 2.5 lakhs will allowed only upon showing the wedding cards, copies of advance payments made for booking marriage hall and caterers etc.
- RBI has also provided an additional 60 days for repayment of housing, car and other loans worth up to Rs 1 crore.
Our country has been suffering from the burden of black money and fake currency for a long time. This has had some adverse effects on our economy. Demonetization is a step to destroy the root of corruption in India. The inconveniences caused by this sudden currency crunch are the main reason why many are opposing this move. The government and the RBI are trying hard to make the situation better so that the implementation procedure of money transfer goes smoothly.
I would like to conclude with my view that sometimes we have to take bitter medicines to achieve greater benefits.