The BJP led NDA Government has asserted in the Supreme Court that the bold move of demonetisation will eradicate black money which casts long shadow of the parallel economy on Indian economy and slush funds operating since Independence.
The affidavit on demonetisation filed by Attorney General Mukul Rohatgi on behalf of the Centre yesterday, said the decision will now help in proper implementation of the ambitious ‘Jan Dhan Yojana’, under which nearly 22 crore bank accounts were open for poor people. The poor and middle class, who are worst sufferers due to black money, will be benefited. It will reduce tax avoidance and bring more transactions into the formal economy.
It further said demonetisation is seen as a check on the real estate sector where prices get pushed up artificially, reducing the availability of affordable housing for the poor and the middle class. It added that the scheme impacts several sectors in the short-term but promises large benefits in the economy in the medium-term.
Justifying the decision to do away with 1,000 and 500 rupees notes which constituted 80 to 85 per cent of the cash flow, the affidavit said, the withdrawal of existing high denomination banknotes will curb funding of terrorists with proceeds of fake Indian currency notes.
The Government said the decision on demonetisation was in line with successive actions it has taken since coming to power in May 2014 after which an SIT was formed to go into the black money issue.
While seeking dismissal of the petitions challenging the November 8 notification on demonetisation, it said the scheme was in coherence with the legal provisions and such actions can only be interfered by the courts, if they are shown to be arbitrary, unreasonable and illegal.