In order to curb fresh generation of black money, the Central government is preparing to gradually phase out the new Rs.2,000 note. The government is also preparing to bring in laws to take penal action against hoarders of the new Rs.2,000 note, according to people in the know of the development.
"The idea behind introduction of the high denomination Rs 2,000 currency was to quickly remonetise the economy with the value in circulation. There is a strong push for a clean economy, towards less-cash economy and putting an end to the parallel black economy,” they told The Statesman.
The initial step of withdrawing the legal tender status from the high denomination old currency notes of Rs.500 and Rs.1,000 announced on November 8, the Prime Minister Narendra Modi had already warned the nation that there could be more measures against black money in future. Officials said, “the Income Tax department is continuously monitoring the flow of money. There is a possibility that this time ‘no exemption’ would be given to hoarders of the new Rs,2,000 note and strict penalty will be imposed.” Earlier, the government gave a relief to individuals for tax exemption up to Rs.2.5 lakh deposit in old stocked currency.
While passing the Finance Bill, 2017, the government made an amendment where it allowed income-tax officials the power to raid anyone without citing any reasons. Officials said, “This will keep a check on continuous property transactions where the ratio of black and white was almost 50:50.”
There was criticism from various corners since the introduction of Rs.2,000 currency note as it will make it possible for huge amounts to change hands in illegal dealings and increase further generation of black money.
However, once the Goods and Services Tax (GST) system is implemented it will ensure transparency in business transactions and leave less scope for cash dealings.
With around 97 per cent of the invalidated currency coming back to the banking system, Reserve Bank of India (RBI) Deputy Governor Viral Acharya said the level of currency in circulation will be slightly lower than during the pre-demonetisation period.
On the other hand, the government is trying to push its digital transactions campaign. Prime Minister Modi urged people on Sunday to take the fight against black money and corruption to the next level and asked them to use less cash and rely more on digital transactions in their daily lives.
The government has engaged Bollywood celebrities like Javed Akhtar, Anil Kapoor and R Madhavan to support a campaign titled 'Remonetise India – A Citizen's Pledge' to spread awareness among people about digitisation.