BY MADHU AGRAWAL
Annual report of Reserve Bank of India -RBI indicating that rupees 15.31 lakh crores out of total 15.41 lakh crores worth demonetized currency on 08.11.2016 which comes out to be approximately 99.3 percent of demonetized notes of rupees 500 and 1000 returned to banks creates doubt that either fake currency has been accounted for in system by RBI after checking, or some duplicate series of notes might have been issued in earlier regime.
Apprehensions in this respect were clear to RBI when it stopped giving daily figure of demonetized currency deposited in banks during period of demonetization. It was the reason that in last week of December 2016, RBI required depositors to provide source of deposited demonetized currency, though later it was withdrawn. RBI did not keep to its promise of accepting demonetized currency with its offices between 01.01.2017 and 31.03.2017. Still no decision is there to accept demonetized Indian currency held with banks in Nepal and Bhutan where system allows Indian currency in normal circulation. Now it is clear that decision is not being taken in this regard because in such a scenario, deposited total demonetized Indian currency may cross ultimate figure of 100-percent. RBI should also not ignore that a substantial percentage of circulated currency can never practically come back to banks because of destroyed in fire or garment-wash, apart from kept hidden and forgotten by many who died without disclosing to their legal heirs, successors or nominees.
Unfortunately such a nice step of demonetizing currency could not get required success because of poor implementation. Voluntary-Disclosure-Scheme giving chance for 50-percent tax on accounted currency if would have been announced on 08.11.2016 itself, would have filled exchequer with huge tax because those having exchanged by paying heavy commission ranging upto 30-40 percent to private bodies, would have preferred giving 50-percent tax to exchequer. Currency-crunch during demonetization resulting in long day-night queues on ATMs would not have been there if all centers like petrol-pumps, milk-booths, Kendriya Bhandaar etc would have given a blanket permission to accept demonetized currency till 31.12.2016. Single Identity-Proof say Aadhar-Card together with provision of putting ink on finger like during voting could prevent multiple exchange by single individuals.