November 8 is the sixth anniversary of Demonetisation, and yet the Indian economy is haunted by black money, counterfeit notes, and the cash economy. The decision of a five-judge bench hearing a bunch of petitions regarding Modi’s decision of Demonetisation to further examine the 2016 move has therefore greater relevance than we presume, especially when Attorney General R Venkataramani and Solicitor General Tushar Mehta repeatedly asserted that the issue has become academic in view of the passage of 6 years after the decision. PM Narendra Modi’s Demonetisation decision was announced on November 8, 2016, at 8 PM on national television and radio which said that all Rs 500 and Rs 1000 banknotes would become invalid at the stroke of midnight. It had a devastating impact on the Indian economy and the livelihood of the people. Apart from that hundreds of people lost their lives in queues while they were trying to withdraw their own money. The then finance minister Piyush Goyal in February 2019 told the Parliament that Rs 1.3 lakh crore of black money was recovered through various anti-black money measures. However, he did not disclose how much black money was recovered through demonetisation. Obviously, the government had nothing much to tell the country, however, they had expected to recover at least Rs 3-4 lakh crore black money.
This surge in black money continued, though nobody knows how much, since no official estimate has been disclosed. However, media reports suggest a great accumulation of black money. The Income Tax department has recently detected Rs 150 crore of black money in Haryana and Delhi-NCR after conducting raids on several businesses including hospitals, and Rs 250 crore in Tamil Nadu. As for the counterfeit notes in circulation, the Modi government had said that they would be washed out by the demonetisation move.
However, the latest RBI annual report of this year mentions that counterfeit Indian currency notes increased by 10.7 percent in the financial year 2021-22 ending on March 31, 2022. It revealed that there was a 101.93 percent rise in fake notes of the denomination Rs 500. The counterfeit notes of Rs 2,000 increased by more than 54 percent, it was reported. Moreover, there was an increase of 16.45 and 16.48 percent in counterfeit notes of Rs 10 and Rs 20, respectively in 2021-22. Fake Rs 200 notes rose 11.7 percent. Counterfeit notes detected in denominations of Rs 50 and Rs 100 declined 28.65 and 16.71 percent, respectively, the report showed. Of those, 6.9 percent were detected at the RBI with the rest 93.1 percent at other banks. It should be worth noting that when demonetisation was announced in 2016, government agencies seized 6.32 lakh counterfeit notes. However, RBI data shows that a total of 18.87 lakh counterfeit notes were seized across the country in the next four years which included all denominations.
Thus, on the one hand, demonetisation miserably failed in all three economic objectives, it had an unprecedented impact on the economy and brought great hardship to people. A total of 58 petitions filed against the demonetisation order are being heard in the Supreme Court of India, which has refused to accept the AG’s and SG’s argument that the issue has become an academic one after six years of implementation. Senior Advocates P Chidambaram and Shyam Divan contended that the validity of the Government’s decision was still open to challenge.