Demonetization: Supreme Court reserves judgment, seeks records from Centre, RBI
The Supreme Court on Wednesday reserved its judgment in pleas challenging the demonetization announced by the Centre on November 8, 2016, The Indian Express reported. The top court also directed the central government and the Reserve Bank of India (RBI) to produce relevant records before it relating to the government's 2016 decision to demonetize currency notes of Rs. 1000 and Rs. 500.
Why does this story matter?
- In 2016, the Narendra Modi-led government announced demonetization, saying it would eradicate counterfeit currency from India, along with terrorist funding. However, things went differently than planned.
- Per government data, counterfeit Rs. 500 notes in circulation have increased by over 197 times since 2016.
- Furthermore, fake Rs. 2,000 notes grew to 8,798 from 638 during 2020-21.
What did the SC bench say?
A five-judge constitution bench headed by Justice SA Nazeer issued the order after hearing the RBI counsel Attorney General R Venkataramani and the lawyers for the petitioners, including senior advocates P Chidambaram and Shyam Divan. "Heard. judgment reserved. Learned counsels of the Union of India and RBI are directed to produce the relevant records," the bench. said.
Can always examine government decisions: SC
Currently, there is a batch of 58 petitions in SC challenging the demonetization announced by the Centre. On Tuesday, the bench said the court cannot fold its hands and sit back on economic issues with the limited scope of a judicial review. It observed that the manner in which a decision is taken by the government can always be examined.
Government justifies decision, petitioners counsel terms demonization 'deeply flawed'
Chidambaram termed the demonetization of currency notes "deeply flawed" arguing that the central government cannot initiate a proposal relating to legal tender without consulting RBI's central board. On the other hand, the government justified its move and resisted the apex court's attempt to revisit the 2016 demonetization exercise saying the court cannot decide a matter by "'putting the clock back."
Some details about 1978 Demonetization Act
The 1978 High Denomination Bank Notes (Demonetization) Act was officially passed to demonetize specific high-denomination banknotes to check the illegitimate money transfer facilitated by high denominations, which is detrimental to the national economy.
No respite from black money, RTI reveals
The Union government detected approximately Rs. 80,000 crores worth of black money since 2014 and has brought back nearly Rs 4,000 crores as taxes and penalties, as per information obtained under the Right to Information (RTI) Act. It also revealed that the probe done by the International Consortium of Investigative Journalists resulted in the detection of over Rs. 11,010 crores in undisclosed foreign accounts.
