Chennai: Prime Minister Narendra Modi's announcement that Rs 500 and Rs 1000 were scrapped from Tuesday night has been welcomed as ‘historic’ and ‘the right move’ to curb corruption and black money. However, it may have come as a ‘rude shock’ to commoners who say they will be put to severe inconvenience due to the "surprise move".
People, especially salaried class and those who don't use banking services regularly, expressed their helplessness since they would not be able to "use their money" with denomination of Rs 500 and Rs 1,000 from Wednesday morning. However, economists, financial experts and people from different walks of the society said the move would put an end to counterfeit currency and other malpractices.
Former Union Revenue Secretary M R Sivaraman welcomed the move calling it a "great move" by the Prime Minister that is aimed at bringing corrupt practices to an end. "This will put terrorism and propagation of counterfeit currency to an end. The arms and ammunition industry thrives on such money. Corrupt politicians will be rushing to deposit their money in banks and when they do that the Income Tax department will swoop in on them. Tomorrow the stocks will crash after this measure," he told DC.
Mr Sivaraman said except Germany no country has ever taken such a step to bring in transparency. "This is the best news in my 39 years as a government servant," he said.
Leading Chartered Accountant M R Venkatesh also joined Mr Sivaraman in welcoming the move by giving ‘three cheers’ to the Prime Minister. “There will be fleeting troubles, but it will be helpful in the long run,” Mr Venkatesh said.
However, consumer associations and commoners said the move would create confusion among people since it has come "out of the blue". "It creates great confusion to the consumers. As circulation of money of lower denomination is already in demand, it is better to give some time for the consumers before implementing the move. The decision should be reconsidered," T. Sadagopan, President Tamil Nadu Progressive Consumer Centre said.
Echoing his views, Naveen Kumar, software professional, said: "I am not sure what would happen over the next two days as there is massive confusion. The crowds outside the ATMs confounded me. I hope this master stroke helps fight corruption as the Prime Minister said it would."
K Ravi, Lawyer of the Madras High Court, termed the announcement as a "great move" and suggested that every piece of currency should have value and an expiry date associated with it.
“This move has come late but will be good for the common man. This move will affect badly those who have large amounts of money stacked with them like businessmen, politicians. The impact of this will be improved circulation, and a spike in the rates of luxury goods - gold and diamonds will see increased demand. I had, in fact, suggested a similar concept for my thesis in 1976 but after 40 long years, I see the idea materialise," he said.
“Demonetizing high denomination notes can be an effective means of checking accumulation of wealth in cash. The government has taken a measure aimed at the heart of the black cash economy. CII congratulates the Prime Minister and the government for this step. Not only is the measure important but it requires extensive preparation for effective execution,”said Dr Naushad Forbes, President, CII.
The real estate sector too welcomed the move. "This is a good move. A masterstroke that will help clean up our financial system. Appreciate the PM," Suresh Krishn, President of Confederation of Real Estate Developers' Associations of India (CREDAI) Chennai, said.
President Pranab Mukherjee on Tuesday night welcomed the “bold step”
President Pranab Mukherjee on Tuesday night welcomed the “bold step” by the Union Government declaring that all Rs 1000 and 500 currency notes will cease to be legal tender.
“Prime Minister Narendra Modi called on President Mukherjee this evening (November 8, 2016) and briefed him of the decision of the Government to declare that all Rs 1000 and Rs 500 currency notes will cease to be legal tender from midnight of November 8, 2016. He also informed that these notes can be used for certain purpose for a limited period,” a press release from the Rashtrapati Bhawan said.
Mr Mukherjee called upon people not to panic and to follow the Government’s guidelines for exchanging currency notes of Rs 1000 / 500 denomination available with them. He reminded that all currency notes below Rs 500 will continue as legal tender.
“President Mukherjee called upon all persons to avail upon the opportunity provided by the Government to exchange currency notes of Rs 1000 and Rs 500 denomination for new legal tender,” he said.
