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Jaitley rushes in to defend demonetisation after RBI says 99 per cent banned notes back with banks



Arun Jaitley

[vc_row][vc_column][vc_column_text]Finance minister admits that not all money deposited with banks post noteban was legal, claims objective of demonetisation was to gradually reduce cash flow and move towards a digitised economy

With the Reserve Bank of India (RBI) declaring that 99 per cent of the banned Rs 500 and Rs 1000 notes were deposited into various banks across the country after demonetisation, Prime Minister Narendra Modi’s claim that his sudden and radical move had crushed the shadow economy and eradicated black money is once again under scrutiny.

On Thursday, Union finance minister Arun Jaitley attempted to launch the Modi government’s refurbished defense of demonetisation that, from the time the Prime Minister announced it on November 8, has been attributed various motives by the Centre.

Insisting that the impact of noteban was “extremely positive”, the finance minister said on Thursday, “Confiscation of money was not the objective of demonetisation… It is needed to be seen in the context of a wider tax base, a more digitalised economy, lesser use of cash and an integration of the informal economy with the formal”.

“The object of demonetisation was not confiscation of money. The object was that India is predominantly a high cash economy therefore that scenario requires to be significantly altered… So rely more on banking transaction and digitisation. The RBI report says the volume of cash currency has come down by 17 per cent,” Jaitley said.

But then the finance minister also added that “My next step would be to end black money in polls”, clearly indicating that the shadow economy was still in operation. Though Jaitley claimed that “terrorist and Naxalite financing stopped almost entirely due to demonetisation”, he or the Modi government have failed to provide any evidence substantiating this claim so far.


Modi’s originally stated goals of demonetisation were mainly three – clampdown on the black money in the system, ending cash-based corruption and strapping terrorists off funding. Of these, there is no visible evidence to show that the latter two have been achieved – terror strikes, especially in the strife-torn Jammu and Kashmir have only seen a steady increase over the past year while systemic corruption has clearly remained untouched.

That leaves the goal of eradicating black money from the system. If provisional figures released by the RBI – 10 months after the demonetisation exercise – are to be believed then “the estimated value of SBNs (specified bank notes of Rs 500 and Rs 1000) received as on 30 June 2017 is Rs 15.28 trillion (or Rs 15.28 lakh crore).”

Now a back of the envelope calculation would show that if the RBI’s estimate of invalidated Rs 500 and Rs 1,000 notes at the time of demonetisation being pegged at Rs 15.44 lakh crore or around 86 percent of the currency in circulation was correct then, as much as 99 percent of the demonetised currency has found its way back to India’s banking system. Only a little over Rs 16,000 crore of the demonetised Rs 15.44 lakh crore was not returned and could be termed as black money – though a large part of this money too could be what people failed to deposit in the banks due to various reasons, including the time-bar on returning the demonetised notes to banks and the overburdened banking system that saw serpentine queues of haggard citizens lining up at cash deposit counters everyday and often returning home without managing to reach the cashier.


It is also pertinent to mention here that the Rs 15.28 lakh crore in demonetised notes that the RBI claims was back in the banking system is still a provisional figure. The RBI is still in the process of counting old notes received at cooperative banks and old notes submitted by citizens in institutions of Nepal. By the time these numbers are formalised, the final figure of demonetised notes that were deposited back with banks might even reach 100 per cent.

Jaitley underscored on Thursday that one of the objectives of demonetisation was also to check circulation of counterfeit currency. Now, the RBI report shows that the number of counterfeit notes detected during the exercise is only minuscule, just about 7.6 lakh pieces, as compared with 6.3 lakh pieces in the year ahead.

Defending the indefensible is often the test of a good lawyer and Jaitley is, in his professional life a senior and accomplished advocate. No wonder then that the finance minister used this skill in defense of noteban.

“It’s nobody’s case that black money has been completely eliminated after demonetisation… The fallout of demonetisation is on predicted lines… the fact that money got deposited in banks doesn’t make it legitimate money,” Jaitley claimed.

The clear admission of the finance minister about illicit money making its way back into the banking system shows that not only was demonetisation as a tool for eradicating black money an utter failure but also that those who possessed the illicit wealth were able to turn it into ‘white money’.

The RBI report also turns at least two claims made by the Modi government – one by Jaitley himself and the other by Attorney General Mukul Rohatgi – into clear instances of misleading the country.

Senior journalist MK Venu points out: “The finance minister had claimed in November that going by past experience about 15-20 per cent of the demonetised currency, roughly Rs 3 lakh crore, was likely to get extinguished and would not return to the system. It would be tantamount to confiscation and become RBI property, to be eventually handed over to government for the welfare of the poor. The then attorney general Mukul Rohatgi stated this before the Supreme Court. So how can Jaitley now say the confiscation of black money was never the objective? The cash that does not return to the system stands automatically confiscated. It is like money taxed at 100%.”

Forget Rs 3 lakh crore that Jaitley claimed would be ‘extinguished’ due to demonetisation, the banned notes that didn’t finds their way back to the banks – provisionally – account for just Rs 16000 crore.

As former finance minister P Chidambaram points out: “the RBI ‘gained’ Rs 16000 crore but ‘lost’ Rs 21000 crore in printing new notes (of Rs 500 and Rs 2000 that were introduced post noteban). The economist deserves a Nobel Prize!”

Chidambaram took a series of digs at the Centre and its demonetisation drive through his tweets.[/vc_column_text][vc_raw_html]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[/vc_raw_html][vc_raw_html]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[/vc_raw_html][vc_column_text]The Twitteratti too gave a big thumbs down to demonetisation as well as Jaitley’s claims over the RBI report. 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Danish Ali calls his suspension unfortunate, says he would continue to raise his voice against injustice, corruption

Danish Ali took to X(formerly Twitter) after his suspension, Ali said he made all diligent efforts to strengthen the BSP and would continue to oppose the anti people policies of the central government. He thanked the part chief Mayawati, for making him the BSP Parliamentary party leader



Lok Sabha MP Danish Ali was suspended by Mayawati-led BSP on Saturday for allegedly indulging in anti party activities. He termed his suspension unfortunate and said he would continue to raise his voice against injustice and corruption.

Danish Ali took to X(formerly Twitter) after his suspension, Ali said he made all diligent efforts to strengthen the BSP and would continue to oppose the anti people policies of the central government. He thanked the part chief Mayawati, for making him the BSP Parliamentary party leader. Ali said if raising his voice against injustice was a crime, he was ready to face punishment.

Talking to the media in a press conference, Ali denied indulging in anti party activities and said he always walked the BSP’s line. On Friday Ali sided with the opposition and slammed the expulsion of Trinamool Congress (TMC) leader Mahua Moitra as a Lok Sabha MP. He slammed the BJP led central government, saying its brute majority in the Lower House did not mean it could throttle the opposition.

The BSP is not a member of the rulling BJP-led NDA or the Opposition INDIA bloc. The BSP on Saturday suspended its MP Danish Ali for allegedly indulging in anti party activities. Ali has been representing the Amroha Lok Sabha constituency in Uttar Pradesh since 2019.

In a statement issued by the BSP national general secretary Satish Chandra Misra, Ali had been warned by the party many times in the past not to indulge in anti party activities. The BSP said Ali had been working with HD Deve Gowda of the Janata Dal (secular) party. At that time, both the BSP and JD(S) were contesting together in the Karnataka state election. After the Karnataka election Ali was given a ticket from Amroha and asked to contest from there due to Devegowda’s insistence. Deve Gowda had said the party had decided to suspend Ali with immediate effect.

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Watch: Lalu Prasad Yadav offers prayers at Tirupati with family members

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Rashtriya Janta Dal President Lalu Prasad Yadav, his wife Rabri Devi, their son Tejaswi Yadav and their son Tejaswi Yadav and their family offered prayers at Tirupati Balaji Temple in Andhra Pradesh on Saturday. The Yadav family participated in the Suprabhatam seva, the first pre-dawn seva performed in the temple of Lord Venkateshwara.

Bihar deputy minister Tejaswi Yadav said he had come here with his family, his mother, father, his wife, brother and his daughter Katyayani to seek blessings of Lord Balaji. He said his daughter Katyayani had her Mundan ceremony. He said the whole family prayed for everyone’s well being so that India moves forward and everyone prospers.

The Yadav family reached Tirumala on Friday. They offered prayers to Lord Balaji in the early hours of Saturday which is also Tejawi Yadav’s wedding anniversary. Tejaswi Yadav took to X(formerly Twitter) and wrote this morning he received energy and blessings from Lord Venteshwara by worshiping and having a darshan at Lord Shri Tirupati Balaji Temple with his family. He said Tirupati Balaji Temple is a wonderful example of excellent craftsmanship and a symbol of devotion, faith and reverence, located in the Tirumala mountains of Andhra Pradesh.

Yadav said the family prayed for prosperity, peace and happiness and welfare of the state of Bihar. He said today on the day of his marriage anniversary, the Mundan Sanskar of daughter Katyayani was also performed. Yadav shared his love for travelling to spiritual places.

He said spiritual, historical and mythological places give out positive energy and it is a means of gaining knowledge, divine intervention, spiritual solace, self realization, meditation and helps in making a connection with God. He said this helps in personal and community development and helps to understand the reason for basic purpose of life.The post has gone viral on social media with 3,38,600 views

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Watch: Maharashtra CM Eknath Shinde drives a tractor at cleanliness drive at Juhu Beach

Maharastra Chief Minister Shinde inspected the paddy crop damaged due to unseasonal rain at Tarsa in Nagpur district. Deputy Chief minister Devendra Fadnavis accompanied CM Shinde and Agriculture Minister Dhananjay Munde.



Maharashtra Chief Minister Eknath Shinde on Saturday, paid tributes to Mahatma Gandhi in Mumbai. He also participated in a cleanliness drive at Juhu Beach A video circulating on social media shows Maharashtra chief minister Eknath Shinde driving a tractor while participating in the cleanliness drive at Juhu Beach.

The video has got 60,700 views on X(Formerly Twitter). Large number of comments started coming on the social media post. One user said this whole thing is a one day drama. Another user said this is a foolish gimmick by the chief minister.

Earlier on Thursday Shinde inspected the paddy crop damaged due to unseasonal rain at Tarsa in Nagpur district. Deputy Chief minister Devendra Fadnavis accompanied CM Shinde and Agriculture Minister Dhananjay Munde. Besides Mauda Taluka, large scale damage has been reported in Ramtek Parshivani taluka.

In Nagpur district a total of 124 villages have been affected by rain, 852 hectares of crop has been damaged Earlier on November 27, Natrionalist Congress Party (NCP) MP Supriya Sule urged the  Maharashtra government to help the farmers after unseasonal rains damaged crops across the state of Maharashtra.

Sule said Maharshtra is standing at a difficult turn. She said a lot of damage has been caused by untimely rains. She said everybody should start to work with sensitivity for the state and farmers. She requested the Maharashtra government to immediately call a team from Delhi, and a full inspection should be carried out.

Sule said the central government should give more funds to Maharashtra. She said wherever farmers have incurred losses, the loans should be waved off. She said she is going to present this issue in Lok Sabha and Rajya Sabha. Heavy rains on Sunday had caused heavy damage to the crops including leafy vegetables, sugarcane, tomatoes, onions and grapes.

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