Law and IT Minister Ravi Shankar
Prasad on Saturday said the decision to scrap Rs.500/1000 notes was taken by
the government on the recommendation of the Reserve Bank of India.

“It is not demonetisation. It
is a wrong expression. Our government has only taken decision upon
recommendation of Reserve bank of India who is authority to take decisions that
notes of Rs 500 and Rs 1000 will not be a legal tender. It is not
demonetisation in classical economic sense,” he said.

Government scrapped acceptance of
old Rs 500 and Rs 1000 notes from November 9 onward but allowed their payment
for some essential services in limited manner.

Listing out steps taken by the NDA
government to deal with menace of unaccounted money at an event of PHD Chamber
of Commerce and Industry here, Prasad said Prime Minister Narendra Modi created
SIT on black money in the very first Cabinet meeting.

The government re-negotiated double
taxation treaties with Mauritius and Cyprus, and bankruptcy code was brought

India also entered into an agreement
with the US under FATCA.

“Then, provision under Income
Tax was made to disclose black money and pay penalty, then voluntary disclosure
income scheme was brought, then benami transaction rule was brought in. The
decision of putting Rs 500 and Rs 1000 out of legal tender was last of
these,” Prasad said.

He said that country’s economy has
12-13 per cent cash component out of which Rs 500 and Rs 1000 account for 86
per cent.

“Now this country is moving
towards honesty and transparency let it move in that direction. Now it is our
duty to bring India out of corruption taint,” Prasad said.

The minister further said due to
economic reforms government has saved Rs 36,000 crore by digitalising economic
activities such as payment of subsidies and MGNREGA wages through direct cash
benefit facilities on to the accounts of intended beneficiaries through Aadhaar.