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Govt's efforts to clean up the economic system should be supported!
'90% value of old currency is back to banks within two days to go. Where the hell black money vanished?' My friend asked me in a satirical tone. 'Isn't it failure of the demonetisation drive because black money as claimed didn't surface?'

I just gave him a curious look wondering on which planet he is living. But then he's not the only one who has such questions. In fact, many people who supported the demonetisation drive too have started asking the same question. My only complaint to my friend is that he not only read all my articles on demonetisation, but also listened to various pints during lot of friendly debates.

However, let me once again put my points on the purpose of demonetisation, black money, black income and clean-up of the economy. I am not an expert economist but I read a lot and has a general understanding as a responsible citizens.

First, let me reiterate my stand that demonetisation is not the sole action to curb black money neither all deposits (of old currencies) are white. Point to be noted is that there is no limit on depositing old currencies whereas there is strict regulation on withdrawing cash.

Demonetisation is one of the initial steps to check the black money generation and bringing transparency into the system. Here, I need to divide the black money in to two section a) Black wealth b) Black income.

Black wealth, which is accumulated due to black income and can be in any or all forms like hard cash, property, Gold etc. Similarly, black income can also be divided into two parts. First, whether the income is earned through crimes such as fake currency, bribe, ransom money, loot etc. All this black income is totally illegal. Second type of black income is earned through tax evasion.

Initially, there was Jan Dhan Yojana drive so as to bring maximum people into the banking system. Second step is of demonetisation to make sure all high value currency notes of Rs.500 and Rs.1000 to be routed/exchanged through banking system. As Rs 500 and Rs 1000 currencies were around 86% of the available currencies, thus it needed to be routed through the banking system to make a deeper scrutiny. You cannot just continuously raid suspecting that some has unaccounted money. Routing through banking system is an attempt to make all currencies accountable.

One may argue that many bankers sabotaged government's effort by conniving with hoarders. But then in such a huge country you can not be absolutely sure that everyone will be honest. But definitely the digitised banking system leaves the details of money trail. That's why from 10th November onwards people including some bankers are caught while doing illegal currency exchange. This scrutiny will go on and believe me most of them will be caught.

Yes, it may require some time, but then the definitive money trail can't be erased. Thus black money property in terms of hard cash is accounted through demonetisation. The purpose is solved here. It also helped in making fake currencies invalid (some say fake currency worth Rs 400 crore, while some say fake currency worth Rs 2400 crore was there in the economy. But even if there are just 10 crore rupees, it will definitely help in terror funding).

Next to follow is, stringent laws on black wealth in terms of Gold and property as hinted by the Prime Minister. Then lot of other things would follow for a total clean-up of the system.

Next is curbing black income. The best way is to go from less cash to cashless. Both the terms are related to digitised payment system. Less cash/digitised payments will help reducing bribes and other deal payments as these are to be under scrutiny.

Digitised payment to even daily wagers in unorganised sector will ensure that a poor wager get his dues as per minimum wages and the employer can't generate black income paying less to his workers. There would be various other kinds of restrictions in making cash payments to reduce black money generation. Tax nets will be expanded and made simple and transparent. GST is another big step.

Another form of black income is routing the cash through tax heavens. The Indian government had already made arrangements with European and other countries including Bangkok for information on money trails. Hopefully, Mauritius route will also be closed soon as the negotiations are in final stage. Interestingly, global mood is anti-black money and hence I am hopeful that no other country would like to become tax haven.

Political funding and electoral expenses are complicated issue to be addressed. But Prime Minister is showing his intent to clean up this also. Many like Sunil Alagh and others believe that Narendra Modi will not succumb to pressure of even BJP and will take significant steps to end black money rule from political space and electoral market.

The opposition parties are opposing the demonetisation step. I am sure they will oppose all other steps as discussed above also. But that doesn't mean that because all the opposition parties are opposing, so the government's actions lack merit. Let me give a small example.

In early eighties, there were street protests by Left and others opposing use of computers at RBI and other institutions. Computers were viewed that time as evils of capitalist culture that will affect poor (Poor is always a handy word for opposition).

Just imagine, if Indira Gandhi had forcibly not implemented computerisation that time, where we would stand at the moment? India is one of the global IT powers at present and the same opposing parties are now tech savvy using smartphones and tablets.

A statesman always work with a vision despite opposition. Narendra Modi has already established himself as a tall statesman in the present era. Thus let's trust him and support him in cleaning up the economic system of the country for a better tomorrow.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of merinews.com. In case you have a opposing view, please click here to share the same in the comments section.
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