Black money: On November 8, 2016, Prime Minister Narendra Modi announced to carry out the notes of 500 and 1,000 rupees in exile. The government’s intent was to eliminate black money on the announcement of the ban on black money. However, some RBI directors did not agree with this idea of the government. However, he had described the banbandi as a commendable step taken in public interest. This is revealed in a report of Times of India.
After more than two years of time, there was no curtain on RBI’s thinking behind the ban on black money. However, the minutes of the last meeting convened with the banquet shows that the RBI’s thinking on the idea of exiting large notes from the system was what.
Headlines in RBI’s board meeting
Actually, the government had said that the ban on black money, note number 500 and 1,000 rupees and sharp circulation of counterfeit notes will be stern. Also, e-payments and financial inclusion will be encouraged. But, on November 8, 2016, at the board meeting of RBI at 5.30 pm, three hours before the announcement of the note-off, some directors said, ‘Not only in the form of black money notes but also in real estate like gold, land, houses, shop And this (notebook) step will have no physical effect on those properties.
Separate opinion from the government
Some RBI directors disagreed on the idea of the government that the pace of growth in the number of big notes is much higher than the pace of economic expansion. These directors said that if inflation is kept in mind, then this gap of growth is not very big. He said, “A small number of counterfeit notes are also a matter of concern, but the figure of 400 crore rupees as a percentage of notes present in circulation is not very high.”
What was the government’s plea?
The government had argued that between 2011-12 and 2015-16 the economy expanded by 30 percent, while the notes of Rs 500 to Rs 76 per cent and 1,000 rupees notes increased by 109 percent. In response, the RBI had said, “The old age rate of the economy mentioned in the economy is real, whereas the growth rate of the notes is nominal. Therefore, this plea does not strengthen the government’s proposal. ‘
Noteben A commendable step: RBI ( black money)
However, these directors supported the government’s suggestion that ‘big public interest’ would be squeezed by the ban on bonding because it will give a quick boost to financial inclusion (financial inclusion) and digital payments. RBI directors said, “The proposed move will create huge opportunities to accelerate the use of electronic inclusions and electronic modes of payments.” Some directors also got attention to the immediate negative impact on the fiscal year 2016-17 GDP figures. However, he had called notebud a ‘commendable step’.
Discussion for six months
Significantly, these ideas were being discussed between the government and the RBI for six months. Despite disagreements with some views of the government, the RBI gave a green signal to the ban on bondage. This proposal was brought by the deputy governor of RBI, whose approval was done through a note from the Finance Ministry. In this note, a draft scheme for withdrawal of notes of 500 and 1,000 rupees was mentioned. The board had assured the government and the RBI for discussion for six months on various ideas.
The assurance given by the Center to RBI
The central government had assured the RBI that it would discourage the use of cash while taking steps to promote digital payments. As soon as the RBI Board gave a green signal to the proposal, the prime minister announced the release of notes of 500 and 1,000 rupees on TV after a few hours. Minutes of the RBI board meeting that took place on the evening of November 8, 2016 show that the RBI had not considered the ban on black money and fake currency used in anti-funding and anti-national activities.
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